Opinion: Will Ottawa’s $14 billion injection to accelerate construction of affordable housing, more rental housing and co-ops, even a tax-free savings account for first-time buyers solve this crisis ?

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Some call Chrystia Freeland the minister of everything, a reference to her considerable influence over the federal cabinet. We can now add a new title: Canada’s Super Developer.

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The former globetrotting journalist, now finance minister and deputy prime minister of Canada, is pumping more than $14 billion in federal funds into cities to spark an affordable housing boom.

The scale and ambition of his move have yet to be fully appreciated by Canadians or the development industry. Federal officials haven’t jumped into the real estate game with that kind of ambition for half a century, the last time a Liberal government invested heavily in commercial and residential developments to fuel housing supply.

So why is it happening again? Simply put, Canada faces a huge housing shortage that requires government intervention before it becomes a national crisis.

Skyrocketing housing prices, the relentless rise in homelessness and our rapidly growing population are confounding themselves with an affordable housing shortage like Canadians have never seen.

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“Canada doesn’t have enough housing,” Freeland tweeted shortly after his announcement. “We need more, and we need it fast.”

The reality is that we are now on the way to creating a permanent category of Canadians who will never be able to own their own home on normal wages. Here are some figures to explain the extent of this crisis:

Canada has chosen to be the fastest growing country in the G7. It’s not because of a pandemic baby boom. It is a deliberate and smart federal policy to stimulate economic growth through immigration. But the number of people who come to Canada is certainly staggering for a country of 37 million people.

In the previous five years, Canada added 1.8 million people to its population. And that’s only the beginning.

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Over the next three years, we will add 1.3 million more Canadians to Ottawa’s current immigration targets. And if federal immigration policy holds – and there’s no reason to think it won’t stay at those levels or even accelerate – there will be another 850,000 people added to those -this. This represents a total of over 2.1 million more Canadians over the next five years.

Indeed, in a decade we will have added 3.4 million more Canadians, bringing Canada’s population well over 40 million.

As an immigrant myself, I have no problem with these numbers, nor do most economists. It is clear that the Canadian economy is absorbing and benefiting from our growing population.

As Freeland also recently tweeted to his 285,000 followers, the unemployment rate is currently at 5.3%, “now lower than it has been in 50 years.”

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But here’s the challenge: all of these people need a place to stay. This is where Canada’s problem begins.

Canada’s private-sector developers are roughly on track to build about 250,000 homes this year, the same period when about 440,000 new immigrants will arrive. Sixty percent of those homes will be condos, most of which will be private homes, not rentals.

Simply put, the number of new homes coming on the market is not high enough to generate a surplus of housing, which we need to create a buyer’s market and help drive down insane prices. Combined with low interest rates – and they’re still low despite the Bank of Canada’s recent half-point hike – Canadians are also going into debt like never before to buy a home, pushing up the odds even further. prices and keeps affordable housing out of reach.

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But there is a deeper problem, a kind of national malaise, that this creates in future generations. According to a report by Mustel Group and Sotheby’s International Realty, more than 80% of Canadians aged 18 to 28 fear they won’t be able to afford a home in their city, and 50% have given up owning a single-family home within their lifetime. life.

Some might argue that Canada is not alone in facing this affordable housing shortage. But the reality is that we’ve done a lot of that to ourselves.

Our global immigration and population growth targets, years of hands-off approach to housing by cities and provinces, have resulted in an imbalanced housing market. Cities created bureaucracies around construction that only Kafka could love. Developers, who are driven by profit, not public policy, simply have little incentive to build enough affordable housing.

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Will Ottawa’s $14 billion injection to speed up construction of affordable housing, more rental housing and co-ops, even a tax-free savings account for first-time buyers solve this crisis? Not by itself.

But Freeland knows that its historic stint in affordable housing development gives it another, perhaps more powerful tool — the pulpit of industry bullying. From there, it will push the private sector, the provinces and our cities to accelerate the construction of truly affordable housing.

We should all wish Canada’s super developer good luck in this mission. Because if it fails, there simply won’t be enough homes for the millions of Canadians we will bring to this country in the years to come.

Miro Cernetig is co-founder of CityAge, a forum that brings together leaders who are building the future of our urban planet. CityAge’s next event, The Data Effect, will take place in Vancouver on June 3 and can be found at CityAge.com

Letters to the editor should be sent to [email protected]. The editor of the editorial pages is Hardip Johal, who can be contacted at [email protected]

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