Building the Future: Balancing Policy and Supply in Canada’s Housing Market

The Canadian housing crisis is one of the most pressing issues facing young Canadians today. With homeownership increasingly out of reach for many, the contrasting approaches to addressing this issue highlight different priorities and strategies.

The current federal government has introduced several measures aimed at making housing more affordable. These include financial tools such as the Tax-Free First Home Savings Account (FHSA), which allows first-time buyers to save for a home with tax advantages, and adjustments to mortgage rules, including increasing the cap on insured mortgages. Additionally, policies like the removal of the Goods and Services Tax (GST) on new rental housing are designed to incentivize developers to build more homes by reducing costs.

In theory, these initiatives are beneficial. They provide financial relief to potential buyers and reduce some costs for developers. However, a significant issue remains: the supply of housing has not kept pace with demand. Basic economics teaches us that prices are driven by supply and demand. In Canada, a growing population and increased urbanization has caused the demand for housing to skyrocket, while supply has lagged behind. This mismatch has led to inflated housing prices and an affordability crisis.

Pierre Poilievre, leader of the Conservative Party of Canada, has taken a different approach to solving this crisis. In a recent interview with Jordan Peterson, Poilievre emphasized the need to tackle the root cause of the issue: the regulatory and bureaucratic barriers that slow down housing development. He criticized the current system for being overly complex and burdensome, making it difficult for developers to bring new housing projects to market quickly.

Poilievre’s plan involves reducing red tape at both federal and municipal levels. He has proposed tying federal infrastructure funds to housing outcomes, ensuring that municipalities are incentivized to approve and expedite housing projects. By making federal funding contingent on measurable increases in housing supply, Poilievre aims to create a system where all levels of government are aligned in addressing the crisis.

Additionally, Poilievre has called for reforms to zoning laws to allow for more diverse and dense housing options, such as duplexes and triplexes, particularly in urban areas. These measures are designed to increase the availability of housing types that are currently underrepresented in the market.

While financial subsidies and tax incentives can help in the short term, Poilievre’s approach recognizes that a long-term solution requires increasing the overall housing supply. By streamlining the development process and reducing bureaucratic hurdles, his plan seeks to address the systemic inefficiencies that have contributed to the current crisis. For Canada to solve its housing affordability issues, a balance of immediate financial support and structural reforms to boost supply is essential.