What is the Government Doing to Increase the Housing Supply?

On June 15, 2023, Senator Omidvar asked Senator Gold, the Government Representative in the Senate, about the impact of large-scale immigration on higher housing prices. Watch:

Hon. Ratna Omidvar: Senator Gold, I have a question for you, and it is about immigration. A study by the Desjardins group has determined that planned large-scale immigration — planned by the government; I support it; you know that — will lead to higher real GDP growth at the national level and in all Canadian provinces. At the same time, the impact on per capita real GDP growth is more mixed, depending on where immigrants settle and possibly how quickly they are able to use their education and qualifications in the employment market. However, there is a real knock-on effect on housing. The current supply of housing is insufficient. This will lead to increased pressure in housing prices, and the impact will be felt across the country.

Senator Gold, my question to you is this: What is the government planning to do to increase the housing supply in Canada for Canadians and immigrants?

Hon. Marc Gold (Government Representative in the Senate): Thank you for the question. It’s an important one. It’s clear that Canada is facing a supply shortage, as highlighted by the recent report of the Canada Mortgage and Housing Corporation, or CMHC.

I have said this on many occasions, and I won’t belabour the point; I’m going to answer your question directly. As reported as recently as today in The Globe and Mail, the housing problem in Canada is a function of so many things that are outside the scope of any one government or even all governments. My answer is that the government is doing its part in the hope it will assist in the face of market forces and demographic forces that are beyond its control.

Look, it’s hard for Canadians to find affordable places to live in their communities. That’s really obvious. What you could call the “financialization” of the housing market has exacerbated this problem, the way in which housing has been used as an investment vehicle. That’s why the government has introduced a variety of measures that will put us on path. We hope to double the number of homes built in Canada over the next decade, to rapidly increase the supply of affordable housing and to help ensure that homes are used to house families, not simply as investment vehicles. It launched a $4-billion Housing Accelerator Fund to speed up construction and help create 100,000 new units; provided $4 billion for the new Urban, Rural and Northern Indigenous Housing Strategy; and made the largest investment in co-op housing in 30 years, in the amount of $1.5 billion.

This is what the federal government is doing and it hopes that others, governments and private sector, will contribute as well.

Senator Omidvar: Thank you for that answer, Senator Gold. The report by Desjardins also points to a solution, and that is the dispersion of immigrants to all parts of our country, not just the hot spots of B.C. and Ontario, in particular, to the Prairie provinces. They note that this would decrease the pressure on housing prices and housing affordability in certain parts of Canada and provide a substantive offset to the impact of higher immigration on home prices.

Can you help us understand the government’s current plan with the current immigration numbers for better distribution of immigrants across the country? Thank you, Senator Gold.

Senator Gold: Colleagues, immigration is clearly the key to helping businesses find the workers that they need as they continue to grow our economy and our country. The 2023-2025 Immigration Levels Plan will ensure that Canada continues to welcome immigrants at ambitious levels to meet our needs. With a focus on regional immigration, this plan will help strengthen our system and spread the benefits of immigration to communities across the country — the Prairies and elsewhere. This includes, of course, and importantly, francophone immigration outside of Quebec.

The government does know that affordable housing has become a barrier to pursuing those opportunities in many communities.

The government’s 2023-2025 Immigration Levels Plan selects individuals with the skills to build homes and encourages them to settle in parts of the country that have housing capacity issues. Again, the government will do its part in terms of housing capacity. It looks to provinces, municipalities and the private sector to do their parts. It’s crucial that we factor in immigration, as you properly point out, in addressing our housing shortage because newcomers are undoubtedly part of the solution.