Trudeau's awful promise to fix housing in seven years

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Last week, the Trudeau government announced it would address the housing crisis as part of its usual rollout of pre-budget announcements.

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In a Friday press release titled simply “Canada's Housing Plan,” the prime minister's office laid out a plan to “open 3.87 million new homes by 2031.”

“Canada can and will solve the housing crisis,” read a quote from Housing Minister Sean Fraser.

In the media, it was largely seen as another Liberal housing bailout, similar to the week when the PMO unveiled a new “tenancy protection fund”.

“Federal government launches new housing strategy,” read the headline on the CBC plan.

But what Ottawa just presented as a pre-budget insult is one of the biggest promises ever made by Canada's federal government.

In terms of cost, effort and raw material logistics, building 3.9 million houses in just seven years easily ranks as one of the most spectacular expenditures of national effort outside of the world wars.

552,857 new homes built every year for seven consecutive years in a country struggling to build half that every year.

In the last 10 years, the average annual rate of new houses was 197 thousand. According to the latest estimate by the Canada Mortgage and Housing Corporation, the most optimistic forecast is that homebuilders will be able to break ground on 232,267 homes by the end of the year (the “pessimistic” scenario is that they will manage only 215,989 homes).

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The figure of 552,857 was appalling even by the standards of the 1970s, when the federal government spurred a massive housing boom that has since been a record high.

At the height of this boom in 1974, Canada built 257,243 new homes, the highest rate in history. Even if that figure could be increased in proportion to Canada's current population, it would still amount to 411,000 new homes.

This was in an era when building a house was relatively easy; building codes were more relaxed, municipalities were permitted, and Canadian cities were surrounded by cheap farmland that could easily be turned into subdivisions.

To be fair, Friday's plan only promises 2 million “clean new homes.” According to current projections, approximately 1.87 million homes will be built by 2031, according to the plan.

So the Liberal plan is to increase that figure by 108 percent overnight.

However, that's 287,714 “net new homes” every year until 2031. Or 783 additional homes per day. Or one “clean new house” every two minutes for the next seven years.

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If Canada could somehow build a second Alberta as a result of Canada's Housing Plan, it still wouldn't be enough to meet that goal.

As of the 2021 census, Alberta has a total of 1,633,220 “detached dwellings” in a 119-year boom in home construction.

Thus, to meet the target of 2 million “clean new homes” by 2031, Canada will also need to build a second Saskatchewan. This province had a total of 449,585 private dwellings by 2021.

The figure of 3.9 million houses was not invented. That's based on CMHC's 2023 estimate, which found that Canada would need to build “about 3.5 million additional housing units by 2030 to restore affordability.”

In this case, affordability is defined as the restoration of housing prices to 2004 levels; Real estate prices in Canada still benefit from last year, a reflection of local incomes.

But that would be 3.5 million “extra” housing units on top of Canada's expected new construction rate. While the new federal plan meets the goal of 2 million “clean new homes,” that's still 1.5 million short of CMHC's estimate.

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As for what the feds want to unlock 3.87 million new homes by 2031, it's tax credits, low-interest loans, reduced red tape and—one of the surprising guarantees—a Home Design catalog of free standardized home designs.

Mike Moffatt, a real estate economist, advocated policies to promote home development. by telling“I can't confirm that this is the boldest housing plan in Canadian history, but it's the boldest in my lifetime and I'm very old.”

But for a plan that would deliver an unprecedented rate of homebuilding in record time, Moffat had no trouble finding places where the feds were leaving money on the table. For example, there has been little to address the steep increases in fees and charges that drive up development costs.

“It's like about 50% new material and 50% past announcements,” he wrote in X's post.

IN OTHER NEWS

Trudeau isn't the only one making promises for the next decade. The Parti Québécois has promised to hold another referendum on secession (it would be the third), and party leader Paul St-Pierre Plamondon has said he suspects Quebec's statehood will end by 2030. It used to be a harmless rant from a fringe party that no one would listen to in Quebec. But recent polls have shown Plamondon benefiting from a massive drop in support for the current Avenir Quebec coalition, a party made up mostly of Quebec nationalists, tired of the time the Parti Quebecois has spent planning new referendums.

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