The shortage of affordable housing in Canada is “a very serious challenge” that could ease as inflation eases and interest rates become more predictable, newly-appointed Housing Minister Sean Fraser told Reuters on Tuesday.
Fraser was appointed last month as part of a wide-ranging shuffle by Prime Minister Justin Trudeau to focus on cost-of-living issues.
An election must be held by October 2025 and the ruling Liberals trail in the polls amid accusations from the opposition Conservatives that Trudeau has mismanaged the economy and made housing unaffordable.
The housing issue is one that the opposition Conservatives have seized on, with leader Pierre Poilievre last week citing figures showing rents and mortgage payments roughly doubling since the Liberals took power in 2015.
Critics say one reason for the crunch is an immigration plan that seeks to attract more than 400,000 people a year, or 1% of the population, without addressing where newcomers will live.
Housing is primarily the responsibility of lower levels of government in the provinces and municipalities. Ottawa has focused on strategies designed to speed up what it sees as a sluggish construction rate.
In 2022 the federal government announced plans to double construction over the next decade. Housing starts, however, will decline to 212,000 units in 2023 from 262,000 in 2022.
Fraser said the pandemic hit supply chains, forcing up building costs. The Bank of Canada lifted rates to a 22-year high in July and inflation in June stood at 2.8% compared to a peak of 8.1% in June 2022.
The lower rate of inflation, and the potential for interest rates to stay stable, should give the building industry more confidence going forward, Fraser said in a phone interview.
“We have an opportunity under this new, more stable environment … to make a major difference.”
Fraser, immigration minister until the shuffle, ruled out major changes to official policy.
“The answer to our housing challenges is not to welcome fewer newcomers. The answer to our housing challenges is to build more houses,” he said.
Source: Reuters
