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Housing might not be Trudeau’s sole responsibility, but it’s his problem

The prime minister was not wholly wrong, per se, when he said housing was not something the federal government has "direct carriage of." But no elected leader has ever improved their situation by attempting to specify limits on their own responsibility for a significant problem.

The Liberals can't afford to ignore concerns about real estate prices

A man speaking on a podium. The podium has a sign that reads "Building More Homes Faster" in English and French.

Justin Trudeau's recent observation that housing isn't a "primary federal responsibility" was something of a Kinsley gaffe — the act of inadvertently telling the truth or inconveniently confessing some private thought.

The prime minister was not wholly wrong, per se, when he said housing was not something the federal government has "direct carriage of." Housing is not like national defence or foreign policy or international trade — areas of policy for which the federal government has sole responsibility. It's a matter of shared jurisdiction and many of the policy levers and regulations exist at the provincial and municipal level.

There is also something to be said for pushing back against the tendency in Canadian debates to ignore the existence of provincial and municipal governments, which have their own laws, powers and responsibilities. Media coverage of Canadian politics is heavily tilted toward the federal level and demands for accountability now almost invariably roll uphill

The rest of Trudeau's answer emphasised a willingness on the part of the federal government to do something — "It is something that we can and must help with," he said. And if Trudeau had said something banal like, "We can't do this alone," he probably wouldn't have been scolded by multiple columnists over the past week.

But no elected leader has ever improved their situation by attempting to specify limits on their own responsibility for a significant problem. And a government that came to office on the promise to help the middle class with the cost of living can't be seen now trying to finesse responsibility for such a pressing concern.

It's also simply the case that federal policy does have a significant and, in many cases, direct impact on the affordability of housing in Canada. And Trudeau's Liberals have, since 2015, embraced the idea that the federal government can play a meaningful and constructive role in expanding access to housing (the word "housing" appeared 29 times in the Liberal party's 2015 platform). In 2017, the government announced a national housing strategy that now includes $82-billion in federal spending and commitments.

Trudeau can fairly say his government has shown more interest in housing than its Conservative predecessor. But Conservative leader Pierre Poilievre has an easy retort: all those promises and investments haven't done enough to make affordable housing as accessible as it should be.

By the federal government's own account, its spending to date is expected to result in the creation of 107,000 new housing units. That's not nothing. But that also doesn't seem like a lot when set against the projected need to build 5.8 million new homes in Canada by 2030.

The need to move faster and break deadlocks

Meeting that need could require even more federal funding. But, as Housing Minister Sean Fraser suggested this week, it might more simply involve the federal government doing a better (ie. faster) job of spending the money it has already committed.

Other ideas are floating around. The federal government could remove the GST from new rental units or make changes to the capital cost allowance for rental properties. It could put funds toward building housing for university and college students. Converting unused office buildings into housing might be easier said than done, but turning over more federal property to development might make a useful dent in the problem (there are already, for instance, nine federal properties for sale in Ottawa).

Fraser's appointment signalled that the Liberals know they need to re-seize the housing agenda. But part of a better federal response might involve dealing with that question of jurisdiction.

"There's a co-ordination problem," Mike Moffatt, director of the PLACE Centre and a researcher focused on economic development and housing issues, said in an interview this week.

To illustrate the problem, Moffatt described his own conversations with municipal and federal officials.

"I will talk to municipal planners about reforms to get more apartment buildings built," he said. "And they'll say, 'Well, there's no real point to liberalizing zoning and things like that because we've already got so many projects that are approved but not built. The developers tell us that these projects just aren't financially viable because interest rates are too high or they need the GST removed on purpose-built rental — like we're not going to go through this process to just not have any new buildings built.'

"But then I'll talk to the federal government about things like removing the GST on purpose-built rentals and their response will always be like, 'Well, that won't accomplish anything because municipalities don't have the zoning for it. So all removing the GST or having something like the accelerated capital cost allowance is going to do is just pay developers for doing what they were already going to do. It's not going to create any net new buildings because zoning is a problem.'"

The solution, Moffatt says, is for everyone to sit down and agree to move in concert. "Right now everybody's waiting for the other guy to move first and nothing's happening because of it," he said.

Can governments join forces to defeat NIMBYism?

The Trudeau government has not been shy about using the federal spending power to drive change and they could offer to swap cash for reforms. But Moffatt has also floated the idea of a "national roundtable or unified plan where the federal government, the provinces and some of the bigger municipalities get together and agree on reforms." And something like a national housing summit could have both practical and political benefits.

While the abstract idea of building more houses might have widespread support, significant numbers of voters are surely less enthusiastic about new housing being added to their own neighbourhood. NIMBYism is real. Even Poilievre, who has vowed to fight NIMBYs, seems to step gingerly around the problem, directing his ire at Vancouver and Toronto — two cities where the Conservatives hold zero seats.

If politicians, at all levels, fear the local backlash that might come from the wave of duplexes and triplexes that is necessary to solve Canada's housing problem, their best bet might be to form a united front and spread the blame across three levels of government.

Either way, Canada's housing problem is unlikely to be solved by the time of the next federal election. The current lack of supply has been 30 years in the making — and it's not a problem that is unique to Canada. The Liberals have, at most, two more years before they face voters again.

At best, the Liberals could go into the next election with an argument that they are seized with the issue and have things moving in the right direction, highlighted by tangible signs of progress. That might at least be a stronger argument than one based on the jurisdictional obstacles of solving problems in a decentralized federation.

ABOUT THE AUTHOR

Aaron Wherry

Senior writer

Aaron Wherry has covered Parliament Hill since 2007 and has written for Maclean's, the National Post and the Globe and Mail. He is the author of Promise & Peril, a book about Justin Trudeau's years in power.

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