Canada’s current pace of homebuilding will see the country face a gap of 3.5 million units by 2030, falling well short of the bar for housing affordability, according to a new report.
The agency projects that Canada will add an additional 2.1 million housing units between 2021 and 2030, hitting a total stock of 19 million homes nationally.
But that will be well short of enough units to make housing affordable for all Canadians, the CMHC said.
It projects Canada will need well over 22 million units by that time to put affordable roofs over the heads of the growing population.
Canada’s construction industry would have to more-than double its expected pace of building over that timeframe.
“Canada’s approach to housing supply needs to be rethought,” the report states.
“The evidence has been mounting for many years that the housing supply system is broken in many parts of Canada.”
B.C., Ontario need biggest boosts
The CMHC notes, however, that supply is only one factor affecting affordability, and ramping up the pace of building will not solve the problem on its own. Other inputs not accounted for in the report include government policies affecting demand and the longevity of work-from-home trends post-pandemic.
Two-thirds of the housing gap will be felt in Ontario and British Columbia, the report finds. Quebec is also mentioned as needing a bump in supply over the coming decade.
But if Ontario is able to deliver the 1.85 million extra units the CMHC is prescribing in its report over the next 7.5 years, the price of the average home would drop to $499,000 from 2021 figures of $871,000.
In B.C., an additional 570,000 units beyond today’s trajectory could drop the average home price to $679,000 in 2030 compared to $929,000 as of last year.
4:47 The housing market begins to soften
The housing market begins to soften – Jun 13, 2022
These forecasts don’t necessarily predict that same drop-off in value for existing homes, but reflects a bigger proportion of cheaper, multi-unit builds in the market.
CMHC also notes that its projection, which assesses affordability for the average income, falls short when considering housing affordability for low-income Canadians, and says future reports would look at improving access for these households.
“The average household in British Columbia just simply cannot afford average housing today. And that’s what we’re trying to fix,” said Aled ab Iorwerth, CMHC’s deputy chief economist, in an interview with Global News on Thursday.
While the CMHC report focused on housing gaps by province, ab Iorwerth said that much of the stock will need to be concentrated in large urban centres such as the Greater Toronto Area and Metro Vancouver.
These cities, where housing is already out of reach for many, must take the affordability question seriously, lest they drive away desperately needed skilled talent.
“We need people to come into our large urban areas. Housing costs are preventing them from moving. So this is potentially putting quite a damper on the long term economic prospects for these cities,” he said.
CMHC target not feasible, expert says
The goal to add an extra 3.5 million homes to Canada’s housing supply on top of the 2.2 million already expected to be completed by 2030 is a “massive undertaking” according to Mike Moffatt, senior policy director of the Smart Prosperity Institute.
“I don’t think we’ll be able to do this, just to put it bluntly,” he told Global News.
In addition to rising material prices, the construction industry is facing a labour crunch as a wave of retirements for metal sheet workers, brick layers and electricians are not being offset by enough new talent flowing into the industry, Moffatt points out.
“We’re having trouble keeping up with those waves of retirements, let alone expanding the sector. So there’s all kinds of bottlenecks here that’s going to make this difficult,” he said.
“But what the CMHC is telling us is that we need to try and we need to take the shortage seriously or else an entire generation of Canadians is going to get priced out of their homes.”
The CMHC report also noted, however, that ramping up construction is not the only way to augment supply. With a growing proportion of elderly households in Canada, embracing multi-generational homes would also ease demand pressures.
Ab Iorwerth said cities need to embrace this kind of “innovation” that could see underdeveloped lots such as retail buildings repurposed for higher density housing.
Moffatt agrees. He told Global News from his single-family home in Ottawa that it would currently be illegal to tear down his house and build a duplex or triplex to accommodate multiple families, but municipal zoning needs to catch up to the need for this kind of intensification.
“We need to find a way to get more of these homes built in our preexisting cities with preexisting infrastructure,” he said.
5:28 Should the Broadway corridor become a high-density zone?
Should the Broadway corridor become a high-density zone? – May 13, 2022
Just because these are lofty goals doesn’t mean they’re impossible, Moffatt added. He pointed to the post-World-War-Two era, when Canada saw a flurry of homebuliding activity to house veterans returning from overseas, as a time when the country rose to such a daunting challenge.
While the CMHC analysis did not factor in any possible boost to construction activity driven by the federal government’s $400-million Housing Accelerator Fund announced in the 2022 budget in April, ab Iorwerth said Thursday he has “high hopes” for the program as a strong incentive to increase the pace of building in Canada.
If Canada is going to succeed in returning to housing affordability levels seen two decades ago, it will be an “all-hands-on-deck effort” that sees municipal, provincial and federal governments align on the need to hike supply.
“It’s everybody working together, the government, all orders of governments, the private sector, and really trying to get our act together on improving housing supply. It’s a large number. It’s going to be difficult,” he said.
— with files from Global News’s Kyle Benning
2:14 B.C. housing inventory lacking supply of affordable homes
B.C. housing inventory lacking supply of affordable homes – Mar 23, 2022
Human Resources Officers must be very busy these days what with the general turnover of employees in our retail and business sectors. It is hard enough to find skilled people let alone potential employees willing to be trained. Then after the training, a few weeks go by then they come to you and ask for a raise. You refuse as there simply is no excess money in the budget and away they fly to wherever they come from, trained but not willing to put in the time to achieve that wanted raise.
I have had potentials come in and we give them a test to see if they do indeed know how to weld, polish or work with wood. 2-10 we hire, and one of those is gone in a week or two. Ask that they want overtime, and their laughter leaving the building is loud and unsettling. Housing starts are doing well but way behind because those trades needed to finish a project simply don’t come to the site, with delay after delay. Some people’s attitudes are just too funny. A recent graduate from a Ivy League university came in for an interview. The position was mid-management potential, but when we told them a three month period was needed and then they would make the big bucks they disappeared as fast as they arrived.
Government agencies are really no help, sending us people unsuited or unwilling to carry out the jobs we offer. Handing money over to staffing firms whose referrals are weak and ineffectual. Perhaps with the Fall and Winter upon us, these folks will have to find work and stop playing on the golf course or cottaging away. Tried to hire new arrivals in Canada but it is truly difficult to find someone who has a real identity card and is approved to live and work here. Who do we hire? Several years ago my father’s firm was rocking and rolling with all sorts of work. It was a summer day when the immigration officers arrived and 30+ employees hit the bricks almost immediately. The investigation that followed had threats of fines thrown at us by the officials. Good thing we kept excellent records, photos and digital copies. We had to prove the illegal documents given to us were as good as the real McCoy.
Restauranteurs, builders, manufacturers, finishers, trades-based firms, and warehousing are all suspect in hiring illegals, yet that becomes secondary as Toronto increases its minimum wage again bringing our payroll up another $120,000. Survival in Canada’s financial and business sectors is questionable for many. Good luck Chuck!. at least your carbon tax refund check should be arriving soon.
NORMAN WELLS, N.W.T. – Imperial Oil says it will temporarily reduce its fuel prices in a Northwest Territories community that has seen costs skyrocket due to low water on the Mackenzie River forcing the cancellation of the summer barge resupply season.
Imperial says in a Facebook post it will cut the air transportation portion that’s included in its wholesale price in Norman Wells for diesel fuel, or heating oil, from $3.38 per litre to $1.69 per litre, starting Tuesday.
The air transportation increase, it further states, will be implemented over a longer period.
It says Imperial is closely monitoring how much fuel needs to be airlifted to the Norman Wells area to prevent runouts until the winter road season begins and supplies can be replenished.
Gasoline and heating fuel prices approached $5 a litre at the start of this month.
Norman Wells’ town council declared a local emergency on humanitarian grounds last week as some of its 700 residents said they were facing monthly fuel bills coming to more than $5,000.
“The wholesale price increase that Imperial has applied is strictly to cover the air transportation costs. There is no Imperial profit margin included on the wholesale price. Imperial does not set prices at the retail level,” Imperial’s statement on Monday said.
The statement further said Imperial is working closely with the Northwest Territories government on ways to help residents in the near term.
“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” Caroline Wawzonek, Deputy Premier and Minister of Finance and Infrastructure, said in a news release Monday.
Wawzonek also noted the Territories government has supported the community with implementation of a fund supporting businesses and communities impacted by barge cancellations. She said there have also been increases to the Senior Home Heating Subsidy in Norman Wells, and continued support for heating costs for eligible Income Assistance recipients.
Additionally, she said the government has donated $150,000 to the Norman Wells food bank.
In its declaration of a state of emergency, the town said the mayor and council recognized the recent hike in fuel prices has strained household budgets, raised transportation costs, and affected local businesses.
It added that for the next three months, water and sewer service fees will be waived for all residents and businesses.
This report by The Canadian Press was first published Oct. 21, 2024.
TORONTO – A new report says many Canadian business leaders are worried about economic uncertainties related to the looming U.S. election.
The survey by KPMG in Canada of 735 small- and medium-sized businesses says 87 per cent fear the Canadian economy could become “collateral damage” from American protectionist policies that lead to less favourable trade deals and increased tariffs
It says that due to those concerns, 85 per cent of business leaders in Canada polled are reviewing their business strategies to prepare for a change in leadership.
The concerns are primarily being felt by larger Canadian companies and sectors that are highly integrated with the U.S. economy, such as manufacturing, automotive, transportation and warehousing, energy and natural resources, as well as technology, media and telecommunications.
Shaira Nanji, a KPMG Law partner in its tax practice, says the prospect of further changes to economic and trade policies in the U.S. means some Canadian firms will need to look for ways to mitigate added costs and take advantage of potential trade relief provisions to remain competitive.
Both presidential candidates have campaigned on protectionist policies that could cause uncertainty for Canadian trade, and whoever takes the White House will be in charge during the review of the United States-Mexico-Canada Agreement in 2026.
This report by The Canadian Press was first published Oct. 22, 2024.
