In the weeks leading up to the release of the federal government’s 2023 fall economic statement, the fiscal update, there was talk about possible breakthroughs in housing policy. But when the update came out on Nov. 21, it delivered a set of measures that have been repackaged several times since 2017: incentives to private developers, piecemeal funding for non-market housing, feeble regulations, symbolic gestures to homeowners, and nothing to protect tenants.

Housing advocates will be tempted to see the announcements as half measures on housing affordability. But there is another way to see the fiscal update: as a clear commitment to profit in housing and a reaffirmation of the Liberal government’s insistence on market-based policies.

This distinction matters.

The half-measures perspective will lead to another around of pleading for a little more funding for a little more non-market housing.

Alternatively, housing advocates can go on the offensive and directly challenge market-based policies, including costly incentives for for-profit housing, empty claims against rent regulation, and the incoherence of government policies that protect investors instead of tenants.

It’s about time for that shift. Current policies aren’t working. But neither is the advocacy.

What will it take?

There was no shortage of justifications for decisive action on housing in the lead-up to the fiscal update. Encampments are growing in number across the country – in cities of all sizes. Landlords increased rents by  11 per cent on average over the past year. Toronto’s large rent strikes are growing stronger. More and more homeowners are stressing about mortgage payments. And the Liberals are trailing the Conservatives in the polls and are under pressure to deliver on a major issue.

None of this was enough to force a change of course.

What’s in the update

The update’s headline housing investment of $15 billion is loans that won’t start to roll out until 2025, which will help fund market units that, in the latest iteration of the same program, were too expensive to most low- and moderate-income tenants.

The update also included details on the removal of the GST on purpose-built rental housing, announced in September. This is a dicey road to lower rents, as there are no guarantees that the rebate will create affordable housing – or any additional housing at all.

The GST measure has been tweaked to include co-operative housing, originally not included in the policy. That’s good news, but that it was an afterthought should be cause for concern. Non-market housing already under construction remains ineligible.

While the GST rebate will cost $4.6 billion over six years, the fiscal update committed just $1 billion to non-market housing over three years, not starting until 2025.

The $4-billion Housing Accelerator Fund featured prominently in the fiscal update document. This is not a new program, merely the government’s first chance to brag about it.

The fund incentivizes municipalities to revamp development processes, including revising archaic zoning bylaws that prevent much-needed densification. This is a good program, but several times elected officials have pointed to local red tape as the cause of soaring housing prices, omitting the role of federal policies that inflate demand, like mortgage market deregulations that have injected a colossal amount of credit into the housing market.

As my third-grade teacher used to say, when you point one finger, three fingers are pointing back at you.

On the regulatory front, the fiscal update targeted short-term rentals. The federal government plans to use tax disincentives to bolster municipal and provincial regulations where they exist. It also promises $50 million over three years to help municipal governments enforce restrictions.

The goal here is to push short-term rentals back into the rental market – which is a desirable goal.

But much like the government’s anti-flipping rules and its temporary ban on foreigner buyers, these measures lack teeth. The Government of Canada could have gone after short-term rental platforms and dealt with the issue resolutely; instead, it chose to aid the enforcement of a patchwork of municipal rules.

Regulatory changes also included the unveiling of a Canadian mortgage charter, which provides some protections to at-risk mortgage holders such as temporary extensions of amortization periods.

There was no word on regulation of financialized landlords, promised in the 2021 election and included in the 2022 budget. The government is still consulting on a plan to plan.

“More spin than substance”: reactions

Various analysts have expressed disappointment with these lukewarm announcements.

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For the Canadian Centre for Policy Alternatives, “on housing, the fall fiscal update is more spin than substance.”

The Institute for Research in Public Policy’s Rachel Samson found that “housing investments are positive, but they are a drop in the bucket of what is needed to restore affordability.”

For the Canadian Housing and Renewal Association, despite some steps in the right direction, “bold action is still needed.”

For the Federation of Canadian Municipalities, the fiscal update “does not reflect the scale of infrastructure investment required to meet the national housing supply gap.”

The Canadian Centre for Housing Rights welcomed new rules protecting homeowners from unnecessary foreclosures but stressed that most people facing housing insecurity in Canada are renters.

Plenty of evidence

Beyond plenty of justification for bold actions, lack of evidence is not a problem, either.

We know that the gap between wages and rents is growing, and affordable units are disappearing because of predatory practices by both financial and small landlords.

We know the people in core housing need, the type of housing they require, and how to finance it.

We know that non-market housing pays for itself and remains affordable in the long run; that’s documented, too.

We have seen the study commissioned by the National Housing Council showing that loans to private developers don’t deliver affordable housing.

We have seen the Canadian Mortgage and Housing Corporation (CMHC) analysis of almost 50 years’ worth of data on rent controls, which found “no significant evidence that rental starts were lower in rent-control markets than in no-rent-control markets.”

We remember that in the 1970s, it was the federal government that prompted provinces to enact rent control as a sensible anti-inflation measure.

Let’s stop calling it a housing crisis

Why bricks and mortar alone won’t solve the housing crisis

A million new non-market homes in 10 years: That should be the goal

Today’s federal government has consistently ignored evidence about the benefits of non-market solutions, favouring incentives to private developers and staying clear of regulating the market. The writing has been on the wall for quite some time.

Going on the offensive

Housing advocates now have a choice to make: we can continue to plead for more crumbs for non-market housing, more meagre regulations, more plans to plan. Or we can fiercely challenge the market “solutions” that so clearly don’t work.

• We can challenge the wilful ignorance about rent controls.
• Challenge the role of the CMHC in de-risking mortgages for private banks while doing so little to support non-market housing providers.
• Challenge recurring claims that it is red tape, not speculative development, that prevents more housing from being built.
• Challenge the fact that the federal government’s own pension fund is trying to evict low-income tenants for refusing to pay above-guideline rent increases.
• Challenge the idea that governments need to incentivize profit in housing and protect investors.

The federal government has reiterated its unshakable support for private housing markets. Those who disagree with this approach should take an equally clear stance.

This article is part of a series called How does Canada fix the housing crisis?