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Trudeau says feds aren’t primarily responsible for housing, but how responsible are they?

Amid rising housing prices and a shortage of housing supply, Prime Minister Justin Trudeau said responsibility on the matter lays mostly with the provinces and territories, but experts say the federal government is playing a larger role in shaping housing policy in Canada.

At a housing announcement in Hamilton on Monday, Trudeau said the issue is mostly provincial jurisdiction.

“I’ll be blunt as well — housing isn’t a primary federal responsibility. It’s not something that we have direct carriage of,” he said.

“But it is something that we can and must help with.”

Housing has become a major political issue as prices continue to rise. The Canadian Real Estate Association reported earlier this year that the average price of a home in Canada is $716,000. 

Conservative Leader Pierre Poilievre attacked Trudeau and his government Tuesday over the increasing cost of housing, saying the federal government is responsible for many policies and institutions that affect housing. 

Poilievre has pledged to withhold federal infrastructure funding to municipalities that block housing developments.

Trudeau said he’d like to see more of an effort from the Ontario government.

“I’d love to be able to share this stage right now, not just with the mayor of Hamilton, but with the province,” Trudeau said.

“They need to be stepping up as well, particularly on affordable housing. That is something that the federal government is taking very seriously, but we need all of us to be working together on [it], and that’s what we’re here to continue to do.”

But experts told CBC News that while Trudeau’s remarks are technically accurate, they simplify a complex issue on which Ottawa could be doing a better job.

Ottawa moving into housing file: experts

The Constitution or legislation sometimes explicitly states which level of government is responsible for a particular issue, but this is not the case with housing.

“If you read the Constitution, the word housing doesn’t appear in there,” said Steve Pomeroy, an industry professor and executive advisor at the Canadian Housing Evidence Collaborative at McMaster University.

“However, jurisprudence has generally interpreted the Constitution that matters of local things are seen as being provincial jurisdiction. So the legal interpretation of the Constitution in a very strict review would allocate responsibility for housing to the provinces.”

But the federal government controls many institutions and areas of policy which affect the price and availability of housing in Canada, Pomeroy said, such as federal fiscal policy and bank regulation.

The Canada Mortgage and Housing Corporation (CMHC), which is responsible for implementing Canada’s National Housing Act, is a federal crown corporation. CMHC says it “exists for a single reason: to make housing affordable for everyone in Canada,” according to its website. The organization provides mortgage insurance, sets rules for who can qualify for mortgage insurance, collects data about housing in Canada, and more.

There’s also a federal housing minister. Sean Fraser, the former minister of immigration, refugees and citizenship, took over the portfolio in the recent cabinet shuffle.

A man in a suit walks in the sun and points.
Nova Scotia MP Sean Fraser arrives for a cabinet swearing-in ceremony at Rideau Hall in Ottawa on Wednesday, July 26, 2023. Fraser became the minister responsible for housing following a cabinet shuffle. (Justin Tang/The Canadian Press)

Ottawa’s desire to be involved in the housing sector has fluctuated over the decades, Pomeroy said, adding that the Trudeau government has wanted to play a bigger role.

The government developed a National Housing Strategy, which includes a plan to build up to 160,000 new homes and cut chronic homelessness in half. It’s also campaigned on a number of housing policies, such as a fund for municipalities that are looking to boost housing supply, as well as a first-time home buyers savings account and a new tax for foreign buyers.

“The pendulum has swung all the way back to a very proactive federal role, notwithstanding the fact that the Constitution doesn’t actually give them the responsibility to be there,” Pomeroy said.

But Lydia Miljan, a political science professor at the University of Windsor, said federal parties and governments campaigning outside their jurisdiction is far from unprecedented. She added that money is a factor as well, as the federal government has the largest budget.

“The federal government has the power of the purse,” she said. 

“And so historically they have done things to make housing more affordable, either by providing housing for low income Canadians through rent subsidies or through social housing.”

Pomeroy agreed.

“To some extent people do look toward the federal government mainly because it’s the level of government with the greatest fiscal powers,” he said.

“The challenge for cities is that they simply don’t have the revenue capacity. Building affordable housing or social housing is a very expensive proposition.”

A man wearing a white shirt and blue suit jacket stands in front of a sign which reads Social Housing and Human Rights.
Steve Pomeroy of the Canadian Housing Evidence Collaborative says the federal government is taking on more of a role when it comes to housing — but it’s not necessarily helping much. (Prabhjot Singh Lotey/CBC)

The government values the National Housing Strategy at more than $82 billion, though some of that money is loans rather than new spending. 

But Pomeroy said the federal government needs to be held responsible for flaws in its approach to housing.

“To be perfectly frank, I think they haven’t done a very good job, even though they’ve started spending a lot of money,” he said.

“The way they’ve designed initiatives, they’ve been very cumbersome.”

Pomeroy said a better approach would have been to leave responsibility for housing programs with the provinces while boosting federal funding and slowly increasing the federal role over time.

Immigration vs. housing supply

Immigration, an area of federal jurisdiction, has also been a contentious issue when it comes to housing. Canada welcomed 437,180 newcomers in 2022, and the record number of immigrants is a factor pushing up demand for housing. 

“You can’t just dump a bunch of newcomers in Canada when we have a housing shortage, and expect the provinces to sort of pick up the slack,” Miljan said.

Following his appointment as housing minister, Fraser said closing the door on immigrants is not a solution to Canada’s housing issues.

Pomeroy said he’d like to see better collaboration between the federal government and the provinces, but added he thinks Ottawa has already gone too far into provincial jurisdiction when it comes to housing.

“I think to some extent the federal government is its own worst enemy on this one,” he said.

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