When it comes to housing construction in Canada, there was more activity when Pierre Trudeau was the prime minister compared to Justin Trudeau’s era.
A new study by the Fraser Institute, a Toronto-based public policy think tank, determined more housing was constructed in Canadian cities during the 1970s than today. The study also warned that the lack of new construction is fueling the rise in home prices – home prices in Canada in February were 28% higher than in March 2020.
“The reality is simple: Canada is not building enough homes to keep up with population growth or basic demand,” said Steve Lafleur, senior fellow with the Fraser Institute and co-author of the study.
Furthermore, the study found “ground-oriented” single-family homes and townhouse prices increased by 31% from March 2020 to last February, compared with a 17% increase among apartments over the same period. Despite strong demand, ground-oriented housing completions declined during the 2010s.
“Not only is there a widespread shortage of housing, but there is a growing mismatch between the housing types being built and those preferred by Canadians,” said Josef Filipowicz, senior fellow at the Fraser Institute and study co-author. “Clearly we should focus on the causes and consequences of this mismatch, as well as solutions for Canadians now and in the future.”
Separately, the Building Industry and Land Development Association (BILD) released a four-point plan with policy recommendations to address Toronto’s housing inventory shortage.
“Experts, the industry and governments agree that the housing challenges in the city, and across Ontario, are firmly rooted in a shortage of new housing and the length of time it takes to build new homes,” said Dave Wilkes, president and CEO of BILD. “The provincial government’s target of building 1.5 million homes over the next decade is designed to improve affordability and bring balance to the market. By virtue of its size, the City of Toronto needs to build 285,000 new homes to help meet this objective. This number represents a 160% annual increase in housing starts from the previous decade.”
BILD’s recommendations included the speeding up of building approvals and the elimination of municipal red tape that delays new construction, the “more efficient land use as both supply and affordability of new homes” based on the availability of land in Toronto, the acceleration of “the development of infrastructure, community services and social services to match the acceleration of housing development,” and the capping of municipal fees, taxes and charges added to new housing.
BILD issued its recommendations ahead of Toronto’s mayoral election on June 26.
“There are clear indicators that housing demand in Canada will remain robust,” said Wilkes. “Last month, Statistics Canada announced that Canada’s population grew by a million people in 2022, and the federal government has committed to welcoming 500,000 new immigrants annually. Mayoral hopefuls must put housing at the top of their agenda.”