In what promises to be a fiercely fought federal election, a bipartisan consensus has emerged on at least one top political issue: there is a “housing crisis” in Canada.
The Liberal, Conservative and New Democratic Party leaders have all used those words to describe the mind-boggling home prices and dearth of quality rental options that have come to characterize the country’s real estate. The Green Party has similarly called for affordable housing for all Canadians.
Breakneck price appreciation, once a problem limited largely to areas around Vancouver and Toronto, has become a national emergency during the pandemic, with Canada’s average home price rising by more than 30 per cent between July 2019 and July 2021, according to data from the Canadian Real Estate Association.
At the same time, COVID-19 has also brought renewed attention to the issue of renting. On the one hand, eviction threats during provincial stay-at-home orders have highlighted the plight of low-income renters, many of whom were disproportionately affected by job losses in the earlier phases of the pandemic. On the other hand, the quality and affordability of rental options is increasingly becoming a middle-class issue as well, as a growing number of prospective homebuyers feel permanently locked out of homeownership.
The front-runners are all going big with promises to tackle the crisis. Liberal Leader Justin Trudeau unveiled a pledge on Tuesday to build or renovate 1.4 million homes in four years. Conservative Leader Erin O’Toole has promised one million new houses in three years, while NDP Leader Jagmeet Singh wants to build 500,000 affordable homes in 10 years. And that’s just a taste of the many policy proposals each party has put forth on housing so far.
But how did Canada’s crippling housing woes come to be in the first place?
While there is no single or simple explanation, here’s a look at some of the main factors experts point to when explaining the country’s housing crisis.
2:16 NDP vows to make housing more affordable in Canada
NDP vows to make housing more affordable in Canada
Low mortgage rates
Economists have long pointed to low interest rates as an important factor behind Canada’s home-price boom.
1:09 Canada election: Liberals introduce 3-part housing plan
Canada election: Liberals introduce 3-part housing plan
Low interest rates have allowed Canadians to take on ever-larger mortgages and thus afford pricier homes. The amount of mortgage debt Canadians collectively owe stood at 1.7 trillion in September 2020, according to the latest seasonally adjusted data from the Bank of Canada. That’s up from around $1 trillion in mortgage debt a decade ago.
While mortgage rates were already low before the pandemic, they dropped even further after the onset of the health emergency, as the Bank of Canada used a variety of tools to lower borrowing costs and stimulate economic activity to soften the impact of COVID-19.
Among other measures, Canada’s central bank has left its key interest rate at a historic low of 0.25 per cent since March 2020. Movements in the Bank of Canada’s trend-setting interest rate directly impact variable-rate mortgages.
But changes in the central bank’s rate can also affect the interest on new fixed-rate mortgages, especially if there’s a widespread expectation that the changes will be long-lasting.
The Bank of Canada has repeatedly flagged high levels of household debt amid the housing craze as a concern. But it does not have a mandate to limit how much Canadians borrow or to keep housing affordable. Instead, the central bank influences interest rates with the goal of keeping inflation low and stable, an objective it pursues with considerable independence from the government.
With economic activity now picking up steam and inflation on the rise, several analysts believe the Bank of Canada will start raising its key interest rate sometime in the second half of 2022.
Higher interest rates are widely expected to put a damper on the housing market, CIBC economist Benjamin Tal has previously told Global News.
“Even a small increase in interest rates would be sufficient to slow down the market,” Tal said.
1:02 Canada election: Conservatives pledge to build 1 million affordable homes in 3 years if elected
Canada election: Conservatives pledge to build 1 million affordable homes in 3 years if elected
Canada isn’t building enough homes
Many analysts and industry insiders also point to another problem to explain skyrocketing home prices: there aren’t enough homes for everyone who wants to own or rent one.
Canada’s housing supply hasn’t kept pace with population growth, several experts say.
While national borders have been closed to most immigrants since March 2020 to limit the spread of COVID-19, between 2016 and 2019, Canada welcomed nearly one million new permanent residents, data from Immigration, Refugees and Citizenship Canada (IRCC) show. And between 2017 and 2018, net immigration accounted for 80 per cent of the country’s population growth, according to IRCC.
That increase likely helped fuel housing demand during the pandemic, Sri Thanabalasingam, senior economist at TD Bank Group, previously told Global News. Lower mortgage rates and a sudden desire for more living space amid the pandemic restrictions triggered what Thanabalasingam calls a “pull-forward” of housing demand, prompting many prospective homebuyers to pull the trigger on a purchase.
Soaring numbers of international student enrolment are also feeding into the demand for housing. In 2019 alone, Canada issued more than 402,000 new study permits, according to IRCC.
And a significant number of those students ends up settling here for the long-term, thanks to Canada’s easy path to permanent residency, economist Mike Moffatt has told Global News.
Southern Ontario is a striking example of the housing shortage. The population of the Greater Golden Horseshoe region, which stretches around Toronto and the western end of Lake Ontario, is estimated to have grown by 780,000 people in the five-year period between the second half of 2016 and the first half of 2021, according to an analysis by Hemson Consulting. That represents an increase of more than 50 per cent compared to the 510,000 people the area added in the previous five-year period, the data shows.
But in the same five-year span between 2016 and 2021, the region likely added only around 270,000 new homes, a modest increase from around 214,000 homes added in the previous five years, estimates Russell Mathew, partner at Hemson Consulting, which crunches the numbers for Ontario’s Minister of Municipal Affairs and Housing.
2:04 Priced out: Will the Canadian housing market crash? Why home prices may stay hot
Priced out: Will the Canadian housing market crash? Why home prices may stay hot – Jun 5, 2021
And when it comes to housing, generations matter, too. Housing demand is linked not just to the number of people who need a roof over their heads but also to the number of those reaching the prime family-formation and home-buying stage.
The largest number of millennials in Canada is turning 30 in 2021, Mathew notes.
“So what are they doing as they turn 30? Well, this is where they’re starting to pair up, thinking of having kids and, you know, maybe buying a house in the suburbs,” he says.
Canada’s rental supply has also been suffering from chronic shortages. The national rental vacancy rate in 2020 was a mere 3.2 per cent and as low as two per cent in 2019, according to the Canada Mortgage and Housing Corporation.
Some blame the rental shortage on rent control policies that, they say, make it less profitable for corporations to build new rentals and discourage landlords from spending on repairs and upgrades.
Others, though, link the dearth of affordable rental options to regulations that favour condos, rather than purpose-built rentals, in areas designed for high-density development.
For the first couple of decades after the Second World War, all urban areas designated for the construction of high-density housing tended to be, by default, reserved for rental units, David Hulchanski, professor of housing and community development at the University of Toronto, has previously told Global News.
But with provincial regulations introducing the condominium form of homeownership in the early 1970s, condos became competition for purpose rental housing in those same high-density areas, Hulchanski said. And, over time, condos edged out rentals.
Also, whether young Canadians are buying or renting, another aspect of the housing shortage is the scarcity of housing options fit for families. Some argue that Canada is not only not building enough homes but not building enough of the right kind of homes.
This is the so-called “missing middle” issue. Canada’s urban development, some housing experts say, is often split between large and expensive detached homes or tiny apartments in high-density units with few options for families with middling incomes.
It doesn’t help that the baby boomer generation seems increasingly inclined to age in place instead of downsizing, which would free up larger homes for growing families.
4:36 Priced Out: A look at why the hot housing market is out of reach for young Canadians
Priced Out: A look at why the hot housing market is out of reach for young Canadians – May 28, 2021
Using homes as an investment
Another hot topic when it comes to housing is the issue of using residential real estate as an investment rather than a place to live.
The idea, of course, isn’t new. Owning and renting a second property, for example, has long been a way for Canadians to generate income and grow their money. But a number of housing market watchers say aspects of real estate investing have become problematic.
Soaring home appreciation makes housing an attractive place to put money, especially when low interest rates mean there are few options for investors to grow their capital without taking on considerable risk.
Investors accounted for 20 per cent of property purchases in Canada in early 2021 compared to just under 22 per cent of purchases in early 2018 and 18 per cent of purchases in early 2015, according to estimates from the Bank of Canada.
One worry is that investors can help feed the collective psychological frenzy that often sets in when home prices start to rise rapidly, pushing home values even further.
Another concern is about investors leaving homes empty or turning them into short-term rentals, which reduces the supply of housing available for Canadians to live in.
2:17 Priced out: Renters facing challenges during a red-hot pandemic housing market
Priced out: Renters facing challenges during a red-hot pandemic housing market – May 29, 2021
For example, when Andy Yan, director of Simon Fraser University’s City Program, analyzed 2016 census data, he found that Metro Vancouver had more than 65,000 homes that were either lying empty or occupied for only a short period of the year, more than double the number of empty homes in 2001.
Vancouver’s empty-homes tax has since prompted some homeowners to rent out their properties, but around five per cent of the city’s homes are still vacant, Yan says.
It’s also unclear how many of the properties that have joined the city’s rental stock are being made available to long-term renters rather than added to the pool of homes for short-term rentals, he adds.
Online platforms like Airbnb have also exacerbated the housing shortage in some of Canada’s hottest markets, some housing analysts say. A 2019 study by McGill University researchers, for example, estimated that Airbnb had reduced Canada’s long-term rental stock by 31,000 homes, with nearly half of active listings located in Montreal, Toronto and Vancouver. Several jurisdictions have since tightened regulations on short-term rentals.
But some say an oversized investor presence in the housing market can be a concern even when investors rent out their properties for the long-term.
One source of concern is the growing presence of corporate investors like private equity firms, real estate investment trusts (REITs) and financial institutions in Canada’s multi-family apartment rental sector.
Martine August, a professor at the School of Planning at the University of Waterloo, previously told Global News that large corporate landlords have a track record of “systematically” pursuing rent increases in order to extract profit from their real estate investments.
And while small landlords are also usually motivated by financial gain, large corporations are more effective at finding ways to increase rents, according to August.
“They typically have a very sophisticated way to try to extract more value,” August says.
“(They) will invest in all sorts of things in those buildings that will allow them to extract more value from it — the types of building renovations that allow them to charge more rents, (or) above-guideline increases.”
In general, the overarching concern is that the secondary rental market — homes built for ownership but then made available for rent — comes with less security of tenure and higher rents than the purpose-built rental market, says Yan.
“Part of (the) challenge is really understanding how the secondary rental market plays a role in the rental system,” he says.
5:00 Your Money: What to expect as bidding wars heat up the housing rental market
Your Money: What to expect as bidding wars heat up the housing rental market – Aug 5, 2021
Using homes to launder dirty money
Yet another factor exacerbating Canada’s housing crisis is money laundering, some analyses suggest.
The Expert Panel on Money Laundering in B.C. Real Estate, for example, estimated that money laundering makes home prices in the province between 3.7 per cent and 7.5 per cent higher than they would otherwise be.
But money laundering in real estate has also emerged as a serious concern in Toronto, Montreal and other parts of the country.
Real estate lends itself well to money laundering, says James Cohen, executive director of Transparency International Canada. For one, real estate purchases are a way to launder large sums of dirty money. And when real estate goes up in value, it becomes an even better deal for criminals, Cohen adds.
“You can enjoy that money for a while by actually visiting that (home) and then you can see the property price go up, sell it, and now you’ve got legitimate cash,” he says.
Organized crime across the world uses real estate to launder money, but Canada’s pristine international reputation and lax anti-money laundering regime have made it an especially attractive destination for crooks looking for a place to park their funds, Cohen says.
“Opaque ownership” is the number one issue facilitating money laundering in Canada’s real estate, according to Transparency International. Using shell companies, trusts or “straw men” to hold title to property is an easy way for criminals to hide ownership from law enforcement and other authorities.
3:17 Evidentiary phase of Cullen Commission wraps
Evidentiary phase of Cullen Commission wraps – May 17, 2021
While financial institutions have an obligation to verify who they’re really doing business with, it wasn’t until June of this year that Canada introduced similar requirements to others including real estate agents, brokers and developers.
Loose reporting requirements for the real estate industry made it easy for criminals to use all-cash transactions to evade scrutiny, Cohen says.
But even with stricter rules in place, it can often be difficult for private-sector entities to assess who really owns what, he adds.
When it comes to housing, Transparency International and other anti-money-laundering advocates have long called for federal, provincial, and territorial governments to require disclosure of beneficial owners as a prerequisite for any property or land transfer and create a pan-Canadian, publicly available beneficial ownership registry.
In 2019, British Columbia created a publicly searchable registry of information about beneficial ownership of land in the province. Quebec, meanwhile, now requires beneficial ownership to be reported in its existing corporate registry.
In its 2021 federal budget, the Liberal government announced $2.1 million to support the creation of a public corporate beneficial ownership registry by 2025.
Still, even with a centralized, comprehensive registry in place, Canada will need to devote more staff, money and training to detect suspicious transactions and hold those responsible accountable, Cohen says.
“Money laundering and financial crime is a very technical area that takes years of experience to be able to enforce,” he says.
It’s little wonder that the ongoing work of B.C.’s Cullen Commission, which was established to determine how to tackle money laundering in the province, earned several mentions on the federal campaign trail.
Ottawa should listen carefully to the Commission’s final recommendations, which are expected later this year, Cohen says.
“You can’t just address money laundering province by province. It’s a national issue.”
MONCTON, N.B. – New Brunswick RCMP say two youths have been arrested after an emergency alert was issued Monday evening about someone carrying a gun in the province’s southeast.
Caledonia Region Mounties say they were first called out to Main Street in the community of Salisbury around 7 p.m. on reports of a shooting.
A 48-year-old man was found at the scene suffering from gunshot wounds and he was rushed to hospital with non-life-threatening injuries.
Police say in the interest of public safety, they issued an Alert Ready message at 8:15 p.m. for someone driving a silver Ford F-150 pickup truck and reportedly carrying a firearm with dangerous intent in the Salisbury and Moncton area.
Two youths were arrested without incident later in the evening in Salisbury, and the alert was cancelled just after midnight Tuesday.
Police are still looking for the silver pickup truck, covered in mud, with possible Nova Scotia licence plate HDC 958. They now confirm the truck was stolen from Central Blissville.
This report by The Canadian Press was first published Sept. 16, 2024.
MISSISSAUGA, Ont. – Golf Canada has set an impressive stretch goal of having 30 professional golfers at the highest levels of the sport by 2032.
The World Junior Girls Golf Championship is a huge part of that target.
Credit Valley Golf and Country Club will host the international tournament from Sept. 30 to Oct. 5, with 24 teams representing 23 nations — Canada gets two squads — competing. Lindsay McGrath, a 17-year-old golfer from Oakville, Ont., said she’s excited to be representing Canada and continue to develop her game.
“I’m really grateful to be here,” said McGrath on Monday after a news conference in Credit Valley’s clubhouse in Mississauga, Ont. “It’s just such an awesome feeling being here and representing our country, wearing all the logos and being on Team Canada.
“I’ve always wanted to play in this tournament, so it’s really special to me.”
McGrath will be joined by Nobelle Park of Oakville, Ont., and Eileen Park of Red Deer, Alta., on Team Canada 2. All three earned their places through a qualifying tournament last month.
“I love my teammates so much,” said McGrath. “I know Nobelle and Eileen very well. I’m just so excited to be with them. We have such a great relationship.”
Shauna Liu of Maple, Ont., Calgary’s Aphrodite Deng and Clairey Lin make up Team Canada 2. Liu earned her exemption following her win at the 2024 Canadian Junior Girls Championship while Deng earned her exemption as being the low eligible Canadian on the world amateur golf ranking as of Aug. 7.
Deng was No. 175 at the time, she has since improved to No. 171 and is Canada’s lowest-ranked player.
“I think it’s a really great opportunity,” said Liu. “We don’t really get that many opportunities to play with people from across the world, so it’s really great to meet new people and play with them.
“It’s great to see maybe how they play and take parts from their game that we might also implement our own games.”
Golf Canada founded the World Junior Girls Golf Championship in 2014 to fill a void in women’s international competition and help grow its own homegrown talent. The hosts won for the first time last year when Vancouver’s Anna Huang, Toronto’s Vanessa Borovilos and Vancouver’s Vanessa Zhang won team gold and Huang earned individual silver.
Medallists who have gone on to win on the LPGA Tour include Brooke Henderson of Smiths Falls, Ont., who was fourth in the individual competition at the inaugural tournament. She was on Canada’s bronze-medal team in 2014 with Selena Costabile of Thornhill, Ont., and Calgary’s Jaclyn Lee.
Other notable competitors who went on to become LPGA Tour winners include Angel Yin and Megan Khang of the United States, as well as Yuka Saso of the Philippines, Sweden’s Linn Grant and Atthaya Thitikul of Thailand.
“It’s not if, it’s when they’re going to be on the LPGA Tour,” said Garrett Ball, Golf Canada’s chief operating officer, of how Canada’s golfers in the World Junior Girls Championship can be part of the organization’s goal to have 30 pros in the LPGA and PGA Tours by 2032.
“Events like this, like the She Plays Golf festival that we launched two years ago, and then the CPKC Women’s Open exemptions that we utilize to bring in our national team athletes and get the experience has been important in that pathway.”
The individual winner of the World Junior Girls Golf Championship will earn a berth in next year’s CPKC Women’s Open at nearby Mississaugua Golf and Country Club.
Both clubs, as well as former RBC Canadian Open host site Glen Abbey Golf Club, were devastated by heavy rains through June and July as the Greater Toronto Area had its wettest summer in recorded history.
Jason Hanna, the chief operating officer of Credit Valley Golf and Country Club, said that he has seen the Credit River flood so badly that it affected the course’s playability a handful of times over his nearly two decades with the club.
Staff and members alike came together to clean up the course after the flooding was over, with hundreds of people coming together to make the club playable again.
“You had to show up, bring your own rake, bring your own shovel, bring your own gloves, and then we’d take them down to the golf course, assign them to areas where they would work, and then we would do a big barbecue down at the halfway house,” said Hanna. “We got guys, like, 80 years old, putting in eight-hour days down there, working away.”
This report by The Canadian Press was first published Sept. 16, 2024.
NEW YORK (AP) — Fenway Park has the Ted Williams seat. And now Citi Field has the Grimace seat.
The kid-friendly McDonald’s character made another appearance at the ballpark Monday, when the New York Mets unveiled a commemorative purple seat in section 302 to honor “his special connection to Mets fans.”
Wearing his pear-shaped purple costume and a baseball glove on backwards, Grimace threw out a funny-looking first pitch — as best he could with those furry fingers and short arms — before New York beat the Miami Marlins at Citi Field on June 12.
That victory began a seven-game winning streak, and Grimace the Mets’ good-luck charm soon went viral, taking on a life of its own online.
New York is 53-31 since June 12, the best record in the majors during that span. The Mets were tied with rival Atlanta for the last National League playoff spot as they opened their final homestand of the season Monday night against Washington.
The new Grimace seat in the second deck in right field — located in row 6, seat 12 to signify 6/12 on the calendar — was brought into the Shannon Forde press conference room Monday afternoon. The character posed next to the chair and with fans who strolled into the room.
The seat is available for purchase for each of the Mets’ remaining home games.
“It’s been great to see how our fanbase created the Grimace phenomenon following his first pitch in June and in the months since,” Mets senior vice president of partnerships Brenden Mallette said in a news release. “As we explored how to further capture the magic of this moment and celebrate our new celebrity fan, installing a commemorative seat ahead of fan appreciation weekend felt like the perfect way to give something back to the fans in a fun and unique way.”
Up in Boston, the famous Ted Williams seat is painted bright red among rows of green chairs deep in the right-field stands at Fenway Park to mark where a reported 502-foot homer hit by the Hall of Fame slugger landed in June 1946.
So, does this catapult Grimace into Splendid Splinter territory?
“I don’t know if we put him on the same level,” Mets executive vice president and chief marketing officer Andy Goldberg said with a grin.
“It’s just been a fun year, and at the same time, we’ve been playing great ball. Ever since the end of May, we have been crushing it,” he explained. “So I think that added to the mystique.”