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Steve Lafleur: Canada has two housing crises. One requires more government, the other less


We’ve all heard it before: building more condos isn’t going to solve Canada’s housing crisis—we need governments to provide affordable housing instead. 

It’s the standard left-wing response to the growing consensus that Canada needs to rapidly increase housing production in order to address our housing crisis. The first part is wrong. The second part gets at something that’s often missed in housing debates. 

Let me explain. When most of us talk about the housing crisis, we’re talking about the middle-class—and upper-middle class—housing crisis. Rising home prices and market rents are pricing more and more people out of our cities. It’s the crisis we see since it directly affects most of us including those in the professional class. 

Crisis number one: Not enough market-rate housing

Housing crisis number one is pretty simple. Housing completions have been relatively stable for decades while population growth has increased. People try to make this complicated, blaming their preferred causes—whether it’s foreign investors, immigrants, or the whole capitalist system. In reality, it’s math.

If there aren’t enough new condos for upper-middle-class urban professionals to buy or rent, they move down market to older units. That pushes middle-class buyers down a notch on the housing ladder, and some people off entirely. At the risk of sounding simplistic, the solution to this crisis is to make the math work. In other words, we need to bring housing completions into line with population growth. 

Ideally, we’d do that entirely by building more housing. If we fail to do that, we’re probably going to end up with less immigration—a lost opportunity for Canada. We can resolve housing crisis number one through slower population growth, more housing, or both. Whatever we decide, it’s a conceptually easy (though politically difficult) problem.

The standard left-wing line gets crisis number one entirely wrong. It might well be because they’re focused almost exclusively on housing crisis number two.

Crisis number two: Not enough social housing

Housing crisis number two is much more complicated. After all, some people are never going to be able to afford market-rate rents. It’s probably not a large proportion of the population—the vast majority of people are housed through the private market—but it’s the most vulnerable segment of the country. We could cut rental rates in half and some people would still be left out. Frankly, many of those people need more than just affordable housing. Some are dealing with complex addiction issues, broken families, and trauma. 

It’s tempting to think that everyone can be pulled up onto their own two feet if we just give them a hand. The addict, the unemployed single parent, the domestic abuse survivor. But even if healthy housing markets around the world, some people fall through the cracks. It’s not just about cheap rent. 

The Left is correct when they point out that some people will never be served by “luxury condos.” Where they err is in assuming that this is true for everyone. Building enough new homes to bump the rental vacancy rate from 1 to 3 percent, for instance, would put downward pressure on rents. Even slightly lower rent payments and more locational options would be a welcome relief to many renters. We shouldn’t discount this just because it won’t help everyone. We can walk and chew gum. We can address both housing crises. 

Of course, while the Right (and centre) is correct that we need more market-rate housing to solve housing crisis number one, we haven’t done enough to address housing crisis number two. Given the magnitude of crisis number one, we absolutely should be pounding the table about it. But it’s hard to build political consensus for solving one housing crisis without addressing both. 

We can’t solve one and not the other

While it’s theoretically possible to solve crisis number one without solving crisis number two, the reverse isn’t true. The bigger housing crisis number one gets, the more it spills over into crisis number two. Many people who would be able to afford 2019 market rate rents in Toronto might not be able to afford 2023 market rates. Some of them may end up part of crisis number two. Being precariously housed can push people into downward spirals that require far more than a few hundred dollars less rent. 

To get a grasp of how housing crisis number one impacts housing crisis number two, consider an exercise I undertook with my colleague Josef Filipowicz recently for the Macdonald-Laurier Institute. We decided to estimate the cost of addressing Canada’s overall housing backlog through social housing alone. While there’s no perfect estimate of how many market-rate units Canada needs, let alone how many social housing units are needed. After all, there’s no objective criteria for how many social housing units are needed that doesn’t account for market rents. More people will need social housing in expensive markets like Toronto than in expensive markets like Cleveland, all else equal. 

We landed on CMHC’s Core Housing Need (CHN) as our preferred indicator.  Put simply, it’s a measurement of the number of people who aren’t able to afford suitable housing. 

The other challenge is imputing a cost. After all, housing costs vary wildly by city and type, and context is also important. Sometimes there is publicly owned greenfield land that can easily be built on. Sometimes there’s free land, but demolition is required. Or land needs to be purchased. Moreover, overseeing a wide-scale social housing buildout would require building administrative capacity. Would that cost be in the tens of millions? Hundreds? More? It’s hard to say. 

Recognizing the complexity of the issue, and in keeping with the principle of charity, we went with the lowest reasonable construction cost estimate available and left out all other costs. Then we did some simple math. Our estimated cost for construction alone: $196 to $300 billion

Now, you might look at that number and say, that’s doable. We can simply allocate ten percent of the budget to incremental public housing every year. First of all, good luck. It’s not going to happen. Second, even if everything went right in that scenario, you’re not fully addressing crisis number two. Having a room for someone who can’t function independently isn’t enough. They often need wraparound services. That’s much harder to pay for if you’re spending billions of dollars of public money trying to house middle managers and accountants.

I’ll admit that I often roll my eyes at the standard left-wing retort that “luxury condos” (meaning normal condos) aren’t going to solve the housing crisis. But they do have a point: building more housing units isn’t enough to address everyone’s housing needs. We need to take both housing crises seriously. But we can’t even begin to address crisis number two without addressing crisis number one. We need governments to do more to help the truly vulnerable, and less that interferes with homebuilders trying to house the middle class.

How the Liberals can kickstart a comeback


A resurgent Conservative Party is coming out of its annual policy convention confident, energized by promising polling trends, and united around leader Pierre Poilievre. Meanwhile, Prime Minister Trudeau and the Liberals are limping into London, Ontario this week for a caucus retreat with their lowest levels of support since taking office in 2015. If an election were held today, all signs point to a Conservative win and the end of the Trudeau government.

It could be, however, several years before voters head back to the polls for a federal election. Is there a way for the Liberals to regain their footing in that time? Can they reinvent themselves in the eyes of the Canadian public after so long in power?

While the government’s growing challenges may simply be insurmountable, they have to try something (or maybe many somethings). The Hub has gathered a host of experts, including some prominent Liberal insiders, to consider these questions and offer their suggestions on how the government can turn its political fortunes around.

Time for a constitutional gamble?

Sean Speer, The Hub’s editor at large 

The Trudeau government finds itself in a difficult spot. It’s been around long enough that its longevity is now a liability. It’s come with the departure of key ministers and staff, inevitable political scandals, intellectual exhaustion, and a growing public perception that it’s responsible for the country’s problems including housing, inflation, and crime. 

These challenges may ultimately prove to be insurmountable. There’s a reason why so many Canadian governments (including the Harper government of which I was a part) tend to be replaced after two or three terms in office. 

Recent exceptions such as the B.C. Liberals under Gordon Campbell and Christy Clark and the Ontario Liberals under Dalton McGuinty and Kathleen Wynne were able to eke out one more election victory before ultimately being defeated. 

It seems unlikely however that Prime Minister Trudeau intends to step down before the next federal election. So the government will need to find a different source of renewal than a leadership change if it wants to restore its public support and seriously compete in its fourth re-election bid since 2015. 

The range of options includes everything from staffing changes (does the prime minister need to finally replace Gerald Butts as Bill Morneau argues in his book?) to sharper political tactics (see the thoughtful yet blunt comments below from Scott Reid and John O’Leary) to to repositioning itself on the political spectrum (see Sharan Kaur’s observations about centrism) to big, new policy initiatives that might capture the imagination of voters and distinguish the government from its political opponents. 

Different people will of course be drawn to different options. But the key here is that the government needs to be thinking in these rather urgent terms. It cannot merely assume that its political standing will turn around if it’s just patient and keeps doing what it’s doing. 

It must be prepared to assume political risks because it otherwise faces the biggest risk: losing. At this point, cautiousness, and safetyism are bigger risks than doing nothing. 

What’s a big idea that may galvanize Canadians and breathe new life into the Trudeau government? 

My bias is towards policy. I’m not sure that a change or personnel or tactics is sufficient to overcome the headwinds facing the government. A new policy initiative that galvanizes progressives and swing voters and contrasts with the Conservatives strikes me as the best chance that the government has. 

The truth is though there’s not a long list of obvious single-issue campaigns that can, as Reid writes, galvanize the public. There’s the sense that the government might view Bill C-18 and the ongoing fight with Google and Meta along these lines. The problem is not only that the Conservatives aren’t taking the bait, but it’s far from obvious that the issue has much salience with Canadians. 

One idea that’s admittedly high risk but may fit the bill is constitutional reform. Previous constitutional fatigue has left us suspended in an unsatisfying equilibrium. No one is satisfied with the status quo. Yet no government has been prepared since the early 1990s to address it. Maybe it’s time for the Trudeau government to take a gamble and open up the constitution.

The Liberals would probably want to codify a specific right to an abortion as well as to bring more concrete expression to the constitutional evolution of Indigenous rights as envisioned in Section 35. They may even want to take a shot at curtailing the notwithstanding clause or interprovincial trade barriers. Conservative premiers would have their own priorities including possible constraints on the federal spending power, the inclusion of property rights, and of course senate reform. Quebec would presumably have an interest in immigration, language, and provincial rights more generally. 

Maybe there’s an odd dynamic where these strange bedfellows can actually reach a deal. Or maybe the prime minister can go over the heads of the premiers and appeal directly to Canadians. Either way, at least it would give him something more exciting and interesting to talk about than net-zero emissions, or child-care spaces, or the government’s other technocratic stuff that seem to have lost their resonance. 

The prime minister’s father of course secured the Constitution in the twilight of his political career. Perhaps Prime Minister Trudeau can reinvigorate his own political fortunes by building on his father’s constitutional architecture. 

Demolish Pierre Poilievre

Scott Reid, Principal at Feschuk.Reid and former senior adviser to the Rt. Hon. Paul Martin 

It’s simple: demolish Poilievre.

There’s more, of course. If the Trudeau Liberals are to rise up off the political mat, a long list of challenges will have to be confronted.  

First and foremost, the government must radically re-engineer its approach to pocketbook issues. A party that once pegged its appeal on lifting up the middle class now aims most of its economic measures, and messages, at the lower end of the income scale. The fat middle of the electorate feels increasingly uncherished and unheard. This simply must change. 

Trudeau also needs to start thinking about how to procure a single-issue campaign capable of galvanizing public attitudes. Think 1974 or 1988—elections where the default theme of “time for a change” was overwhelmed by a policy fight that rescued unpopular incumbents.    

But the essential precondition for a Liberal rebound is to render the leader of the opposition widely unelectable. Why an impossible-to-not-encounter media blitz against the new CPC leader wasn’t launched last year is a Murdoch-level mystery. With Poilievre’s own advertising campaign working to apparent effect, the Liberals are running out of time to lay on the lumber. Hesitate much longer and the reek of desperation will overwhelm even the finest creative. 

Research will guide where that attack should be trained specifically. Keep in mind that simple character attacks are easily dismissed as pure politics. Better to find a policy difference so instructive that it invites people to make their own damaging inferences about Poilievre and how he would govern.

A well-executed paid campaign will not win Trudeau the next election. Inevitably, the Liberals need the economy to be better and they need to be better on the economy. But as long as Poilievre’s presentation of himself to voters goes uncontested, there will be no return to competitive standing. It is the critical first step back. 

Wedge issues alone won’t work

Sharan Kaur, Former Deputy Chief of Staff to the Hon. Bill Morneau

The days of sunny ways are long gone. We live in a post-pandemic era where distrust in our institutions is at an all-time high and politicians aren’t afraid to pander to people who consider conspiracy theories as facts. Social media has become the proverbial town square and liberalism is next on the chopping block. 

A recent poll conducted by Angus Reid revealed that 32 percent of people felt that Conservative Leader Pierre Poilievre would make the best prime minister for Canada, with Prime Minister Justin Trudeau trailing at 17 percent. Some might be wondering how a party that won a staggering majority in 2015 on a platform of hope and hard work is suddenly the party that Canadians want to run away from. Simply put, those at the helm of power within the liberal movement have lost sight of the centrist politics and policies.  

When left in the ivory towers of Ottawa for too long, politicians and those around them lose sight of what is truly impacting Canadians. Every day Canadians want to see politicians show restraint when it comes to spending. They want to see decorum. They want to see all levels of government working together to solve critical issues like housing. The liberals need to focus less on creating wedge issues out of things like identity politics and find ways for growth and prosperity for our country. 

Social policy issues will always be important but right now we are seeing a level of anger and frustration rise amongst everyday Canadians who are having a hard time keeping a roof over their heads and putting food on their tables. 

If I were part of the team surrounding Prime Minister Trudeau, while the Conservative Party of Canada held their well-attended national convention in Quebec City this weekend with a somewhat new and improved version of their leader Pierre Poilievre, I would advise them to tread carefully. Let the conservatives move to the far Right. They will inevitably fumble by pandering to those with extremely polarizing views.

There is one person who can beat Poilievre and it is Trudeau but it will require discipline and a compass that will guide them back to true centrism.

Prime Minister Justin Trudeau, centre, flanked by MPs, arrives to make an announcement during the Liberal summer caucus retreat in St. Andrews, N.B., Tuesday, Sept. 13, 2022. Darren Calabrese/The Canadian Press.

Trudeau needs to retake centre stage

John O’Leary, Senior consultant at Crestview Strategies, member of the 2019 and 2021 Liberal Party National Campaign teams, and Director of Strategic Communications in the Liberal Research Bureau

More Justin Trudeau.

It’s counter-intuitive to say the Liberals need a more visible, active prime minister at a time when polls show many Canadians are ready for a change and believe it’s time for Justin Trudeau to step down. But he can’t hide from those polls or just surrender to that sentiment. The prime minister often says that “there is more to do” and it’s up to him personally to get it done.

He needs to admit that his team of capable ministers is unable to lead the national conversation like he can. He needs to physically get out of the Ottawa Bubble to be present with more real people talking, and better yet being seen doing something, about their biggest problems. He needs to strenuously make the case that he has the best answers to what confronts our country, and he needs to keep at it week after week without distraction. 

The prime minister must also enlist his caucus and cabinet as a pack of attack dogs to take a sharper partisan fight to the Conservatives, in local ridings, the House of Commons, and social media, so he can stay laser-focused on his core narrative. He needs to show the vigour and energy that knocked out Patrick Brazeau in 2012, and the relentlessly positive and hopeful spirit that won over Canadians in 2015. People aren’t going to give the prime minister a second look and support him again if he doesn’t give them something inspiring and worth seeing.

Justin Trudeau is the only person who can persuade Canadians he is the right person to lead our country. Polls today say he isn’t doing enough to make that happen, but everyone loves a comeback. He needs to step up and give Canadians more, and he needs to start now.

Act on affordability issues

Margareta Dovgal runs the Vancouver-based non-profit Resource Works Society and has been a long-time Liberal Party volunteer 

Fall marks eight years since the Liberal Party of Canada swept in a majority win, bolstered by a campaign focused on change. And change there has been, from cannabis legalization and national child care to weathering a global pandemic.

What’s front and centre today, however, is the sense that everything is intolerably expensive and that wages haven’t kept up.

The crisis before us isn’t unexpected—alarm bells have been sounding for ages. It isn’t exclusively down to the federal government either, with much of the responsibility for housing in the hands of municipalities. The same goes for provinces regarding business conditions.

Nevertheless, a mature government with nearly a decade under its belt can’t avoid accountability for national affordability and economic performance.

Poilievre is already leveraging the situation, pulling support from demographics that should be voting Liberal. His message, like the Liberals back in 2015, promises change.

There’s a vast gulf, rapidly widening, between the homes we need and the ones we’re building.

Our economic productivity is lagging, affecting Canadian incomes. Core to that is building more, particularly high-value major projects that deliver energy and minerals to the world. 

The next federal election will hinge on who is perceived to have the greatest commitment and most credible plan to release affordability pressures and grow the economy. 

Right now, the Conservatives can only say the right things.

The Liberal government has an opportunity to act.

Let’s do that, urgently and aggressively. Work with provinces and territories on pushing cities to get more homes built and investing in affordable housing.

Take every measure to improve business confidence so that more high-paying jobs can be created and maintained.

Progress on this front will drive not only decisions at the ballot box, but also the engagement of volunteers and organizers across the country next time we’re in an election. 

It’s time to reduce immigration

Bryan Breguet, Too Close to Call founder and pollster

How could the Trudeau government interject new political life into itself? It could switch its position on immigration. I’m not talking about going PPC or [Quebec Premier Francois] Legault, but a significant pivot from ongoing increase to the country’s immigration in-take target and its general “century initiative” rhetoric.

This isn’t such a far-fetched idea. We’ve seen recent glimpses when government raised the prospect of a possible cap on the number of international students, a group that has ballooned massively in recent years to reach 900k recently, and is believed, at least by some, to put significant pressure on rents and housing prices. 

While the Liberals have, at times, given the impression that they don’t take the housing crisis seriously and are inclined to double down on satisfying their increasingly mortgage-free boomer base, we must also recognize that the Liberal Party of Canada has historically been remarkably good at adapting and pivoting when needed. They read the room much better than the Conservatives and New Democrats. 

So, if they decide to get more serious on the housing file, they’ll need to confront the fact they can’t build enough (or, more precisely, incentivize provinces and cities to build) to make a meaningful difference on prices before 2025. They could however pivot on immigration and have results quickly. 

It might start with reducing the number of international students. But the government’s track record on immigration and built-in strengths could enable it to go further by reducing the number of permanent residents (including points-based immigrants and refugees) without the risk of people questioning its commitment to immigration and diversity. 

It’s hard to know how much such a policy pivot would affect housing demand and in turn prices but it may not matter per se. Politics, of course, is ultimately about optics. The government would look like it’s trying to get to the root of the housing crisis. The Conservatives, by contrast, appear afraid of their own shadows with anything related to immigration. 

The prime minister might therefore gamble that his name and decades of good-faith support for immigration and multiculturalism would allow him to pivot without alienating voters from cultural and visible minorities—something that the Conservatives likely cannot afford, especially after the 2015 election. The Liberals in short may have the political maneuverability to counterintuitively run to the right of the Conservatives on immigration. 

Polls have shown people are ready to support a reduction in immigration levels. A well-crafted message centered on helping the housing market could succeed and take this topic away from Poilievre who currently enjoyed a de facto monopoly on it in the past couple of years.