Ability to Deliver on Budget Housing Promises

Well, housing is perhaps the number one ballot box issue in this country right now, and it showed in many ways in the Liberal government’s 2024 budget, the federal government unveiled a plan to build nearly 4 million homes by 2031. But behind those big numbers, the big question is how feasible is this plan logistically and does it hit the mark to tackle the housing crisis? A lot of questions, of course. For more on this, we’re joined by Ian Lee, the associate professor at Carlton University Sprott School of Business in Ottawa and knows the housing file very well for many different reasons. Professor Lee, great to see you. Welcome back. My pleasure, Anthony. All right, so nearly 4 million homes, you look at this right now. I mean, this is, this won’t even address the bigger issue in terms of housing affordability, but we don’t even come close to that per year if you break it down because that’s what, 7 years from now? What are your thoughts? That’s right. You’re absolutely right. This promise is over 7 years, 2024 to 2031. And that would those numbers work out to 475,000 how homes, housing units being built every year. Right now, today, and this is CMHC data, we’re building 244,000 units annually. So the government is essentially promising that we’re going to double the number of housing units built in this country starting like tomorrow morning. And and there’s no evidence of that we haven’t built ever built in the history of our country, 475,000 housing units annually. So just on the empirical data, it it I’m skeptical. OK, the second high level concern I have and it’s in the very first paragraph of the Governor Canada’s affordable housing document is there’s a sentence there that just jumped off the page at me said the federal government is calling on all orders of government to build at least 800,000 more homes by 2031. I’m a former mortgage manager years ago and I lent millions and millions of dollars in mortgage housing and and funding financing homes and and businesses too. Commercial mortgages, the vast majority of housing units from the very beginning of Canada to the present are not built by government. They’re built by the private sector. We have a huge private sector of real estate developers. We call them real estate developers. And you got to throw this in because this is a major, major factor, the people to build these homes. Some estimates say you would need hundreds of thousands more construction workers, laborers, and anyone in the trade to enter the market right now to be able to do this. We’re already dealing with a labor shortage right now and some estimates that I’ve seen that there’s going to be a retirement of 20% in this sector over the next decade. So how do you square that circle? I, I do believe that there’s a solution. I’m not being pessimistic and saying, well, that’s just it. Let’s just all quit and go home and give up. We, we built an appropriate number of houses. Let’s just do from the end of the Second World War to the present, OK. And after the word the, the soldiers came home, there was a desperate need. If you study the origins of Canada Mortgage and housing, it was the CD Howe, the famous Liberal cabinet minister, CD Howe, who stepped up and he said I’m going to get rid of the red tape, I’m going to get rid of all the barriers to building houses. What this document does, and they do do some good things in this document. We can talk about that in a moment. I’m not saying that their whole document or approach is wrong. There’s some things they’re getting right, but there’s an awful lot of let’s have more regulation, let’s have more red tape. Let’s have a renter’s Bill of Rights, even though the provinces already regulate renters and they have very stringent rules on, on, on renters. Free me for interrupting. But I want to be able to get a sense of, because we’re up against the clock. What would you see as solutions and, and, and some of the, the positive things that we can actually point to that is actually going to solve this problem? Absolutely. So the federal government does have a responsibility and it’s not to regulate housing being built 800 meters from a transit station. They have control, exclusive control over immigration. They’ve got to bring it back to sustainable levels. And, and the minister himself has said it’s unsustainable. They’ve got to move very quickly because that’s exacerbating, It’s not causing the problem, but it’s making the problem much worse. So that’s something they can do. They can put a lot more support into municipalities to build roads, sewers, et cetera, because that is essential. So they, the accelerated capital cost allowance to encourage rental construction, these are the sorts of indirect measures that the federal government can take rather than trying to intervene in indirectly into housing, which is a exclusively provincial responsibility. So there’s things they can do. They can change the recruitment of of immigrants to focus much more on the trades because immigration is under the federal responsibility or authority. So there’s many things that the federal can do, but it’s playing an indirect role, not a direct interventionist role into the housing. Well, it’s going to require big thinking for this major problem. And you do the you do the math here and the numbers simply don’t add up, at least according to their math. Nonetheless, we have to leave the conversation there. We always appreciate your expert insight on this, Professor. Thank you so much. That is Ian Lee, associate professor at the Sprott School of Business at Carlton University in Ottawa. Thank you again, Sir. Thank you, Anthony. Thank you.