As the federal election campaign enters its fourth day, housing policy has emerged as a defining issue, with parties vying to address Canada’s affordability crisis. In an interview with The Hub, Mike Moffatt, founding director of the University of Ottawa’s Missing Middle Initiative and a leading housing policy expert, dissected the proposals and their implications for voters.
Here are three key takeaways from their discussion:
- The Conservative GST rebate plan could boost supply, but it’s just one piece of the puzzle: Poilievre’s proposal to eliminate GST on new homes under $1.3 million modernizes a 1991 policy and may incentivize construction, but federal levers like immigration and mortgage rules remain underutilized.
- Immigration cuts alone won’t fix housing—demographic trade-offs loom: While reduced immigration targets (from 500,000 to 350,000 annually) have eased housing pressure, Moffatt warns that drastic cuts could destabilize labour markets and pension systems, exacerbating economic challenges.
- Housing shortages are crushing productivity and youth happiness: Unaffordable cities force workers into less productive regions, stifling growth. Meanwhile, young Canadians report despair over the lack of economic choices with political and social consequences.
GST rebate: A long-overdue fix
The Conservatives’ flagship housing proposal—scrapping GST on new homes under 1.3 million dollars—earned praise from Moffatt. He noted the current rebate, frozen since 1991, covers only homes up to $350,000 and refunds just 36 percent of the tax, acting as a “de facto development charge” that stifles supply. He lauded opening up eligibility.
“They’re opening it up to everybody, so anybody who has a purchasing a new ownership home could be eligible for this rebate, so long as the home price is under $1.3 million,” he observed.
He described what has already been done by the current government, including eliminating the GST on purpose-built rentals, changes to accelerated capital cost allowance provisions on the tax side, and increasing availability of low income or low interest rate loans for apartment construction.
But Moffat said bolder ideas—like reviving 1970s-era tax incentives for small-scale apartment investors—remain absent from party platforms.
Immigration: A delicate balancing act
With all major parties now advocating reduced immigration, Moffatt highlighted the policy’s double-edged sword. While lowering targets from 500,000 to 350,000 annually shrinks Ontario’s housing gap from 1.7 million to 1.5 million homes between 2021-31, he stressed that even the revised goal exceeds the province’s historical construction capacity.
“Ontario has never built more than 900,000 homes in any decade,” he noted.
Moffat also warned that the deeper challenge lies in Canada’s aging population, referencing looming strains on CPP and health care. His analysis underscores the tightrope parties must walk—addressing housing demand without triggering economic stagnation.
The ‘housing theory of everything’
Moffatt saved his sharpest insights for housing’s ripple effects. Unaffordable cities disrupt labour mobility, forcing workers in Windsor or London to reject higher-paying Toronto jobs because “60 percent lower wages in London still leave them better off after housing costs.” This misallocation, he argued, drags down national productivity.
Socially, the crisis is fueling a youth mental health emergency. Canada’s ranking in the World Happiness Report plummeted to 18th in 2025, with young adults citing a catastrophic lack of “freedom to make life choices”—a metric where Canada now sits 86th globally.
Moffat described the sentiments of young people, saying, “I will never be able to afford a down payment, or never even be able to move to another apartment,” linking this despair to political disengagement and even separatist sentiments. “They have a future that’s been imposed on them, rather than one that they’ve chosen.”
The discussion closed with a spotlight on southwestern Ontario, a region that Moffatt called a “bellwether region” for its electoral significance. Hammered by Trump-era tariff threats and skyrocketing home prices, the area embodies the intersection of housing, trade, and opioid crises. “The current environment reminds me of 2008,” he said, referencing auto sector layoffs, but with added layers of dysfunction.
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