Housing Affordability
Housing affordability scorecard
We scored the parties' platforms to see how close they get us to achieving our goal of housing affordability. Download the scorecard and check out the full analysis below! UPDATED September 14, 2021.
This analysis is current as of September 8, 2021. You can find the complete Voter's Guide (covering housing, family, climate and public finance here)
Table of Contents
Introduction
This election, Generation Squeeze is undertaking a rigorous assessment of federal party platforms and commitments on four key issues: housing affordability, family affordability, climate change, and overall plans to budget for wellbeing for all generations.
Our mission: to help voters better understand how far each party's platform goes towards actually solving big problems facing young people today.
Instead of simply listing party promises, our assessment attempts to make meaning of these promises, individually and in aggregate. We do this by assessing the degree to which each major party’s platform advances the evidence-based actions needed to address the key issues squeezing younger Canadians. You can find detailed information on the methodology we use to analyze and assess party platforms.
In this document, you will find:
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Summary score table: The commitments made by each party in their platform are assigned a score. This score is determined based on the extent to which the actions proposed by the party will move us towards the solutions identified in Gen Squeeze’s game plans on housing and family affordability, climate change, and wellbeing budgeting for all generations.
- Detailed commentary: In depth discussion of the platform commitments made by each party that informed the scores, as well as the strengths and weaknesses of each commitment.
Gen Squeeze does not tell you who to vote for. And we don’t aim to portray any party in a favourable or unfavourable light. Our goal is to help voters be as informed as possible about the positions of all of the parties on the big issues squeezing younger Canadians. You can get more information on our commitments to be non-partisan and evidence-based.
Approach to Platform Analysis
For the 2021 federal election, Gen Squeeze is focusing our analysis on the four major parties that began the race with at least one MP who was elected as a representative of that party, and who are running a national slate of candidates. This includes the Conservative Party, the Liberal Party, the New Democratic Party, and the Green Party.
Our assessment of party commitments on housing affordability is based on our Housing Affordability Framework. This framework draws on the work of the Balanced Supply of Housing University-Community Partnership, and on the findings of Gen Squeeze's "Building Housing Common Ground" session and report. Read more about our framework design here.
To support the analysis of party platforms, we've translated our housing policy framework into 15 key criteria. Parties are assigned points based on their platform's response to each of these criteria. Score range from +1.0 to -1.0, assessed as follows:
| Assessment | Points |
| No discernible commitments | 0 |
| Commitments are somewhat capable of achieving the goal | 0.5 |
| Commitments are capable of achieving the goal | 1.0 |
| Commitments somewhat undermine progress towards the goal | -0.5 |
| Commitments undermine progress towards the goal | -1.0 |
You can learn more the full scoring methodology, the rationale for this approach, and its limitations, by reading our detailed methodology.
Punchline
Generally, we get asked two questions about the housing policies in the platforms.
First, is any party doing enough to end the housing affordability crisis?
Second, which platform aligns more with the evidence about what is required to restore affordability?
Our Voter’s Guide helps to answer both question
1. No party is proposing to do enough to restore housing affordability for all.
Gen Squeeze worked with academic and community experts to produce a comprehensive policy framework to fix the housing system. The framework points to 15 different action items. None of the Party platforms address all 15. As a result, there is reason to remain concerned that the large gap between housing costs and local earnings will persist.
2. Some platforms align more with the evidence than others
The Liberals promise to address two-thirds of the action items.
The NDP and Greens promise to address one-third.
The Conservatives promise to address one-quarter.
A key challenge
None of the parties propose to restore affordability for all by adapting policies so home prices will stall in order to give earnings a chance to catch up.
Summary score table
The table below summarizes the scores of the Conservative party, the Liberal party and the New Democratic party on each of the 15 housing affordability criteria.
We welcome feedback from parties, including concerns that we may have misinterpreted elements of their platforms when assigning our scores. We commit to revising our scores in light of party evidence that their platforms or other election documents include commitments that align with the evaluation criteria.
Note for mobile/smartphone device users: The table below may not display properly on your smartphone screen. If the table appears to be cut-off, please return to this page on a desktop/laptop computer. We apologize for the inconvenience.
Detailed Commentary
Below is a comprehensive explanation of why Gen Squeeze assigned the scores we did to each party for each criteria, and the strengths and weaknesses of individual policy proposals.
For each section, we generally begin our commentary with the party we see as having the strongest platform on that criteria and then move to parties we see as having the weakest platform or the least to say.
CLEAR GOALS AND PRINCIPLES
Criterion 1: Do the platforms advance the goal of all Canadians being able to afford a home by 2030?
In the National Housing Strategy, the arms-length Canada Mortgage and Housing Corporation commits to the goal that “By 2030, everyone in Canada has a home that they can afford and that meets their needs." Gen Squeeze has put this goal at the centre of our housing solutions game plan. We believe parties should adopt this, or a similarly clear and ambitious goal.
All parties recognize the “crisis” in Canada’s housing system – a welcome acknowledgment of the magnitude of the challenge we are facing. But none explicitly commits to ensuring affordable housing for all Canadians within a specific timeline. So no party receives a full point for this criterion.
Each party promises new homes – 1.4 million for the Liberals, one million for the Conservatives, 500,000 for the NDP, and 300,000 for the Greens, with varying commitments regarding affordability (see criteria 7 and 9 for more information). But with the Parliamentary Budget Officer forecasting that 1.8 million Canadians will be in core housing need by the middle of this decade, the numbers fall well short of meeting the goal of affordable homes for all. This is because the platforms share a common problem – they are silent about what needs to happen to housing prices over the next decade. Affordability cannot be restored if we don’t take action to stall home prices, so that local earnings have a chance to catch up.
NDP: The NDP platform states that: “Everyone should have the right to a safe and affordable place to call home” (p. 10). Importantly, the NDP make clear that this goal includes supporting Canadians who aspire to home ownership – and expanding the supply of affordable rental housing. Although the 500,000 new homes promised by the NDP are far from enough to meet their goal, the commitment to ensuring affordability for all new housing stands out among the platforms. For this reason, we award the NDP half a point for this criterion.
Liberal party: The Liberal platform states that: “Everyone should have a home to call their own” (p. 11), and promises that their plan to achieve this goal is for all Canadians. The three pillars of the Liberal plan are increasing housing supply, protecting rights, and taking action against speculators (below we discuss and assess the details of the specific measures proposed under each pillar). Since the Liberals stated goal aligns with affordability for all, but does not include a timeline, we award the party half a point.
Green party: The Green platform (p. 37) claims the party “is committed to making the right to adequate housing a reality,” including by declaring housing affordability is “a national emergency.” The party gives no timeline. Accordingly, we assign the Greens half a point.
Conservative party: The Conservative platform recognizes that: “Affording a home – to rent, let alone to buy – is slipping out of reach of Canadians across our country” (p.55). It also recognizes that urgent action by all levels of government is needed to address this crisis – primarily to shore up housing supply. However, the platform does not include any specific language around ensuring that all Canadians can access affordable homes as a goal, nor does it set a timeline for the requisite actions. For this reason, we award the Conservatives no points for this criterion. We will revise and upgrade the score if future Conservative campaign commitments make explicit that the party is adopting the goal of affordability for all by 2030.
Criterion 2: Do the platforms recognize housing as a human right?
One of the basic human rights is the right to adequate housing and shelter, recognized in the Universal Declaration of Human Rights, the International Covenant on Economic, Social and Cultural Rights, and in Canada’s own legislated National Housing Strategy.
NDP: The NDP platform (p. 10) references housing as a human right, noting that the party’s approach will fully implement the right to housing. For this reason, we award the platform 1 full point for embracing this principle.
Green party: The Green platform (p. 37) states that “Adequate housing is a fundamental human right” (p. 37), and the party is “committed to making the right to adequate housing a reality.” We award a full point.
Liberal party: The National Housing Strategy (p. 4) created by the Liberals features a “rights based approach to housing.” The party has since “introduced legislation recognizing the right of Canadians to access adequate housing” (Liberal platform, p. 11). For these reasons, we award the platform a full point.
Conservative party: The Conservative platform does not refer to housing as a human right, even though it invokes the language of “rights” dozens of times throughout the platform in regards to other issues. We give the Conservatives no score for this criterion.
Criterion 3: Do the platforms demonstrate a commitment to the principle of Homes First, Investments Second?
Homes First, Investments Second means treating housing and residential land simply as a place to call home, not a way to get rich. The bottom line is that we cannot make housing more affordable while at the same time encouraging home values to increase (faster than local earnings). Policymakers need to choose.
Liberal party: In their platform, the Liberals state that “Homes are for people, not investors” (p. 14) and that “Homes should be for people to live in, not financial assets for investment funds to speculate on” (p. 15). Gen Squeeze congratulates the Liberals on including this language. They deserve credit for drawing attention to the risks of using housing as an investment strategy – including contributions to “underused and vacant housing, rampant speculation, and skyrocketing prices” (p. 14). As the Liberals’ language aligns well with the Gen Squeeze principle of ‘Home First, Investment Second’ we give them a full point on this criterion.
However, the Liberals could still do more to link the accumulation of housing wealth by many regular Canadians with unhealthy housing cost increases that outpace local earnings. It is not only foreign investors, money launderers, and large corporations using real estate as an investment approach. So long as property ownership is seen by many Canadians as their safest and best investment option, they’ll put an outsized proportion of their available funds (savings and debt) into it.
NDP: The NDP platform recognizes that: “Big money investors are driving up the costs of houses” (p. 12) – and those investors are “looking to turn a profit, not build a neighbourhood” (p. 12). These statements confirm that the NDP is concerned about the negative impacts of treating housing as an investment strategy for Canadians trying to access affordable homes. Accordingly, we award the platform half a point for this criterion. We would change this to a full point if the party were to make explicit that they are committed to the principle of “Homes First. Investments Second.” Embracing this principle would encourage a shift in focus beyond foreign investors and money launderers to also acknowledge the way in which rapid gains in home prices motivate regular Canadians to put their money in real estate as an investment strategy.
Conservative party: The Conservative platform points to the need to curb the impact of foreign investment on rising home prices to ensure that “housing in Canada is truly for Canadian citizens and residents first” (p. 56) because we need “a real estate market that serves the interests of everyday Canadians” (p. 56). A charitable interpretation of these statements implies some alignment with the principle of Homes First. Investments Second. We therefore award half a point. By focusing only on foreign investors, the Conservatives don’t leave room to consider the role of domestic policies in creating a real estate investment climate that drives up prices.
Green party: The Green platform (p. 38) commits to “strengthen regulation to limit foreign investment and end predatory practices in residential real estate.” A charitable interpretation of these statements implies some alignment with the principle of Homes First. Investments Second. We award half a point.
Criteria 4: Do the platforms make room for everyone?
This criterion reflects the principle that housing policy should be created with the intent of welcoming a diversity of people, incomes, quality housing forms, and tenures into all of our neighbourhoods and communities. This principle discourages NIMBY’ism (Not In MY Back Yard).
Liberal Party: The Liberal platform proposes a “Housing Accelerator Fund” that specifically commits to “tackle NIMBYism and establish inclusionary zoning bylaws” (p. 13). They describe their housing plan as being for all Canadians – and specifically reject the idea of ‘pitting’ “millennial against boomer” or “buyer against renter” (p. 11). Liberals also make commitments to addressing homelessness, and housing needs for Indigenous people via an Urban, Rural, and Northern Indigenous Housing Strategy (see criterion 7). As well, the Liberal platform promises to support renters through expanded rent-to-own programs with private, not-for-profit, and co-op partners (see criterion 10); and renovations to adapt housing for multigenerational families. Taken together, we give the Liberal a full point for their actions on this criterion.
Conservative Party: While the Conservative platform does not specifically mention NIMBYism, it does include a commitment (p. 55) to incentivize cities to add density – in this case, near transit development receiving federal funding. Specific reference to a policy tool to incentivize municipalities to add density is a strength of the Conservatives in the 2021 election. This element of its platform would be stronger still if it didn’t focus on adding density only around transit (where there often is relatively high density already, and there are risks of displacing people currently living in affordable rentals). A stronger approach would commit to incentivize density in urban neighbourhoods with low-density zoning.
Beyond its focus on adding density, the Conservatives promise to address homelessness by re-implementing the Housing First approach, which was the focus of the Mental Health Commission of Canada’s At Home/Chez Soi project. They also commit to working with Indigenous housing partners to develop an Indigenous housing strategy, and to encouraging investments in rental housing through changes to taxation (discussed more below under criterion 10). For these reasons, the Conservatives receive a full point for their proposed actions on this criterion.
NDP: The NDP platform does not reference NIMBYism or federal measures that could influence zoning to incentivize additional housing supply in urban neighbourhoods zoned for low density. The half million new housing units promised by the NDP include community and non-market housing, rental assistance for co-ops, and accessible housing for seniors – though the number of units in each of these areas is unspecified.
Like the Liberals and Conservatives, the NDP promise to develop an Indigenous National Housing Strategy, in this case within their first 100 days in office. The NDP also describe the goal of ending homelessness as a core component of their housing plan – though specific commitments in this area are vague. The platform speaks to the purchase, lease and conversion of hotels and motels for emergency housing relief until more permanent, community-based solutions are available. We assign the NDP half a point.
Green party: The Green platform does not reference NIMBYism or federal measures that could influence zoning to incentivize additional housing supply in urban neighbourhoods zoned for low density. The 300,000 new “deeply affordable” housing units promised by the Greens include social, co-op and rental housing – although no specific plans or budget are provided to achieve this outcome. They also promise 50,000 supportive housing units to help Canadians struggling with a combination of homelessness and mental health issues. Similar to the other parties, the Greens promise to develop Urban Indigenous Housing strategies. We assign the Greens half a point for this criterion.
SCALE UP NON MARKET HOUSING
Criterion 5: Do the platforms protect and upgrade existing non-market homes?
Including investments in necessary repairs, as well as accessibility and climate upgrades.
Liberal party: The Liberal platform speaks to a need to repair and revitalize (p. 13) existing affordable housing units, in addition to expanding the supply overall. “Accelerating critical repairs” (p. 13) to existing affordable housing are part of the promise to invest $2.7 billion over 4 years in the National Housing Co-investment Fund (see also criterion 6). A number of other actions are also included in this $2.7 billion (supporting affordable housing providers to acquire new buildings, extending co-op housing models, addressing the needs of vulnerable groups) so the proportion of funds dedicated to repairs is unclear. As well, no information is provided on what repair costs will be eligible, where money will be targeted, or how many units will be covered. But as the only party that provides specific investments to maintain current affordable housing, the Liberals receive half a point for this criterion.
Green party: The Green platform (p. 38) is the only other platform to prioritize the need to “protect the existing stock of affordable housing by funding the purchase of buildings by non-profit and cooperative affordable housing organizations.” No plan or budget is provided. We award a half point for this criterion.
NDP: The NDP platform (p. 11) has the most explicit focus on scaling up the supply of non-market homes, which we evaluate in the next section. However, the platform does not refer to protecting or upgrading the existing stock of social housing. As a result, we do not assign a point for this criterion.
Conservative party: To date, the Conservative platform doesn’t reference any plan to invest in repairs to existing non-market homes. The platform does not include the phrases “social housing,” “non-profit housing,” “non-market housing,” or “below-market housing.” Zero points are assigned.
Criterion 6: Do the platforms create new non-market homes?
Including the entire spectrum of non-market housing – shelters, transitional and social housing, plus a range of rental and ownership options for low and middle income earners. Actions to expand non-market housing can include purpose built construction; donated land, loans, and capital; “inclusionary zoning”; and incentives and programs to convert existing market housing to non-market tenure.
NDP: The NDP platform has the most explicit focus on scaling up the supply of non-market homes; and its promises imply it will accelerate annual spending on housing more than the other parties. The NDP promises to “create at least 500,000 units of quality affordable housing in the next ten years, with half of that done in five years. This will be achieved with the right mix of effective measures that work in partnership with provinces and municipalities, build capacity for social, community, and affordable housing providers, to provide rental support for co-ops, and meet environmental energy efficiency goals” (p. 11). This language is strong, and would earn a full point if the platform promised enough units to respond to the 1.8 million households that the Parliamentary Budget Officer anticipates will be in core housing need by the middle of this decade – along with a budget-estimate that is sufficiently high to make the promise real. Unfortunately, there is a large gap between non-market housing needs and what the NDP propose, and no budget numbers are currently available. We therefore assign half a point.
Liberal party: The Liberal platform commits to building and repairing more affordable housing by permanently increasing funding for the National Housing Co-investment Fund, for a total of $2.7 billion over 4 years. The Co-investment Fund is a component of the National Housing Strategy, which supports the construction and revitalization of affordable housing. New funding announced in the Liberal platform will support the development of new affordable units, as well as the expansion of co-op housing and “projects for vulnerable groups” (p. 13) – though whether this latter commitment will increase supply is unclear. Since its creation by the Liberals, the Co-Investment Fund has been criticized for being slow in delivering its funding to projects on the ground, raising questions about whether the new funding will flow as fast as the Liberals hope.
While it is difficult to parse through all the numbers, the Liberals promise to “build or revitalize an additional 250,000 homes over 4 years” (p. 12) beyond what the market will already develop. This commitment resembles the NDP aim to build 250,000 new affordable units in the next 5 years. We give the Liberals half a point on this criterion, recalling that there are over 1.5 million households already in core housing need.
Green party: The Green platform (p. 38) commits to “build and acquire a minimum of 300,000 units of deeply affordable non-market, co-op and non-profit housing over a decade.” While this Green target’s timeline is less ambitious than that of the NDP and Liberals, it is the only platform to invoke the language of “deeply affordable” housing, which is gaining importance as a goal in the non-profit housing sector. The party does not yet define what this phrase means. But it does promise (p. 37) to “redefine affordable housing using a better, updated formula, that accounts for regional variations across the country.” We assign the Greens half a point for this criterion, recognizing that there are over 1.5 million households already in core housing need.
Conservative party: The Conservatives say relatively little about non-market housing in their platform. The platform does not include the phrases “social housing,” “non-profit housing,” “non-market housing,” or “below-market housing.” This suggests that the promise to create 1 million new homes in the next 3 years includes little attention to non-market options. Still, the Conservative platform (p. 55) does include two commitments that will contribute to growing non-market options. The first promises to “review the extensive real estate portfolio of the federal government – the largest property owner in the country with over 37,000 buildings – and release at least 15% for housing while improving the Federal Lands Initiative” (p. 55). The second would creative incentives for landowners to donate property to Community Land Trusts for the development of affordable housing. Both are laudable ideas. But they remain insufficient to scale up the supply of non-market housing relative to the over 1.5 million households in core housing need. Strict adherence to our admittedly blunt scoring methodology assigns a half point to the Conservatives for this criterion; but that is generous by comparison with the half point received by the other parties.
Criterion 7: Do the platforms create new strategies to serve the most vulnerable?
Liberal party: The Liberal platform includes actions to address the housing needs of two specific groups. To support Indigenous housing, the Liberal promise to invest $2 billion “with over half of the funding available by the upcoming summer construction period” (p. 59). More details are not provided, but the platform references both housing shortages and the need for repairs. The Liberals also plan to co-develop with Indigenous partners an Urban, Rural, and Northern Indigenous Housing Strategy. This will be complemented by a National Indigenous Housing Centre, which will see Indigenous people overseeing federal Indigenous housing programs. The Liberal fiscal plan allocates $315 million over 4 years to these commitments, with most funding invested up front.
The Liberals commit to end chronic homelessness in Canada, promising to move forward with “Reaching Home: Canada’s Homelessness Strategy” and to appointing a Housing Advocate to monitor action (see criterion 14). The platform also commits to supporting communities across the country to deliver homelessness prevention and reduction programs. This language on ending homelessness is strong, and builds on important work that the Liberal government led by initiating Canada’s National Housing Strategy (NHS) in 2017. Despite all the noble work under the NHS, the Parliamentary Budget Officer reported in August 2021 that the number of Canadians households in core housing need will rise from 1.5 million households in 2017 to over 1.8 million households by the middle of this decade. For this reason, we award the Liberals only half a point for this criterion.
NDP: Like the Liberals, the NDP also propose to end homelessness in Canada within a decade, which builds on the NDP’s relatively strong emphasis to scale up the supply of non-market housing. To advance this goal, the party proposes to “fast-track the purchase, lease and conversion of hotels and motels for emergency housing relief until more permanent, community-based solutions are available” (p. 66). The party allocates approximately $250 million in annual spending for this purpose.
The NDP also propose adopting a Housing First approach, a recovery-oriented approach to ending homelessness. It centers on quickly moving people experiencing homelessness into permanent housing, and then providing additional supports and services as needed. The Mental Health Commission of Canada validated the potential of Housing First through its extensive At Home/Chez Soi research project.
We award the NDP half a point for this criterion.
Green party: As do the other parties, the Greens feature language to develop housing strategies “for Indigenous Peoples and by Indigenous Peoples.” The Greens also promise to make the right to housing “a reality.” We interpret this commitment as a promise to end homelessness, putting the party on par with the NDP and Liberals on this issue. Consistent with a housing-first approach, the party commits to a vision of 50,000 supportive housing units that combine shelter with wrap-around support services for people struggling with problems related to mental health and addictions. This appears to come on top of the 300,000 deeply affordable units promised by the party, which it proposes to accelerate by expanding the CMHC’s current Rapid Housing Initiative. The Greens further endorse creating a Canada Co-op housing Strategy in partnership with CMHC, co-op societies, credit unions and other lenders; and also recommend tax breaks to incentivize contributions to community land trusts that will then build affordable housing. The Greens specifically refer to increasing housing for people with disabilities.
Given the gap between these Green party targets and the fact that over-1.5 million households live in core housing need, we assign the platform half a point for this criterion.
Conservative party: Consistent with a commitment to reconciliation with Indigenous peoples, the Conservative party proposes to enact a “For Indigenous, By Indigenous” strategy (p. 55). No specifics are provided on the intended scale or goals of this strategy, or its application to on and off reserve Indigenous communities.
As with the NDP, the Conservatives also promise to target homelessness by re-implementing a Housing First approach (see above), with a specific focus on addressing addictions (complemented by $325 million to support residential drug treatment and recovery centres, p. 66). If backed up by sufficient investments, this Conservative commitment may be promising. No costing data are available for the Conservative platform as of yet.
The Conservative platform also promises to expand the Canada Child Benefit for women with children living in women’s shelters, to help them transition to more long-term housing (p. 88). The proposed budget of $500 per month, per child, in year one – dropping to $250 per month, per child in year two – may not be high enough or long enough to provide stable housing support, although we applaud the Conservatives for recognizing the housing challenges for women escaping violence.
The Conservatives receive a half point for this criterion.
FIX THE REGULAR MARKET
Criterion 8: Do the platforms include action to dial down harmful demand?
Including harmful demand from money launderers, speculators, foreign buyers, tax cheats, house flippers, and short-term rental operators. More 'mundane' but very pervasive sources of domestic investment demand also can perpetuate harmful demand. This includes everyday Canadians who rely on rising housing and land values as a source of investment, instead of putting that capital into productive investments like stocks and bonds – or alternatively into the construction of secure, purpose built rental homes. Canadians who are lured by low interest rates and loose mortgage regulations to bid and borrow more for housing than they can realistically afford also play a part in sustaining harmful demand. This latter problem speaks directly to the ways in which political parties may try to woo younger voters – by helping them to borrow more to manage the very wide gap between local earnings and high housing prices.
Since all major parties have become increasingly sophisticated in addressing this criterion, we break our analysis into two parts, and award up to one point for each part:
- Part A) asks: does the party promise to address the most obvious examples of harmful demand, like money launderers, speculators, foreign buyers and house flippers? Parties need to address all of these obvious examples to get the full point.
- Part B) asks: do parties resist promising to “help” younger Canadians and newcomers straddle the gap between local earnings and high home prices by borrowing and bidding more. Such promises may help individuals become owners in the short-term. But the more those individuals borrow to cope with unaffordability barriers, the more they bid up the price of housing – which further drives home prices out of reach for those who follow. In this section, we search for evidence that parties are seeking to help younger Canadians (which they deserve) while adding as little additional fuel as possible to a housing market that is already burning out of control
Part A: Dialing down harmful demand – addressing the more obvious problems
Liberal Party: The Liberals offer the only platform that would address four of the most obvious examples of harmful demand: money launderers, speculation that results in empty homes, foreign buyers and house flippers.
The Liberals embed several commitments to dial down harmful demand within their proposed Home Buyers’ Bill of Rights (p. 14), including measures to increase transparency and accountability in real estate; tools to impede money laundering through real estate transactions; and stipulations for mortgage lenders on disclosing financial information and offering mortgage deferrals. Of note, the beneficial ownership registry proposed by the Liberal (and the other parties) is one of the most important mechanisms to reduce money laundering through real estate.
The Liberals already promised in Budget 2021 to expand BC’s approach to taxing vacant homes across Canada, beginning January 2022. Their election platform broadens this coming tax to include vacant foreign-owned land within large urban areas (p. 15).
Liberals also followed the Conservatives by promising to restrict non-residents from purchasing homes for the next two years, followed by a study of the impact of this change (p. 15). Both parties deserve credit for taking this next, logical step beyond the foreign buyers’ taxes already implemented by BC and Ontario.
The Liberals stand out from the other parties by promising to discourage home flipping by adding a new tax on people or companies that buy and sell residential properties within a 12-month period (p. 14). While this tax is expected to raise $36 million over 5 years, beginning in 2021-22, what is more important is that it discourages purchases of housing for quick investment returns, by reducing the tax loophole that currently exists.
We award the Liberal platform a full point for this criterion.
Conservative party: The Conservatives deserve credit for promising a two-year ban on foreign purchases of housing in Canada – and doing so before any other party (p. 56). The Conservative promise is sophisticated in stating that the party will discourage purchase of primary residences while encouraging foreign investment in affordable, purpose-built rental housing (although what kinds of incentives, or their expected efficacy, are not discussed). This is a fine example of trying to channel private investment for public good – provided the new investment in purpose-built rental doesn’t result in displacing existing renters who reside in the limited supply of affordable (albeit often old, and in need of renovation) rental units.
Conservatives also promise measures to tackle money laundering in real estate, including strengthening existing legislation; developing new tools to support enforcement and prosecution; and applying relevant recommendations from the BC Commission of Inquiry into Money Laundering at the federal level. Like the other parties, this includes a commitment by the Conservative party to establish a beneficial ownership registry for residential property (p. 56).
We award the Conservative platform a half point for this criterion. A full point would be awarded if future policy statements offer strategies to reduce vacant homes and house flipping.
NDP: The NDP take a different approach from the Liberals and Conservative on foreign home ownership, promising a 20% foreign buyers tax on purchases of residential property by foreign corporations or people (p. 12). This is a less ambitious approach than the outright ban promised by the other parties. Based on experiences to date in Ontario and BC, foreign buyers taxes have had some dampening impact on housing prices – but they have not proven to be game-changers.
Like the other parties, the NDP are concerned to fight money laundering and its impact on driving up housing prices. They also propose to create a public beneficial ownership registry to increase transparency about who owns properties, and require reporting of suspicious transactions (p. 12).
As with the Conservatives, we award the NDP platform a half point for this criterion. A full point would be awarded if future policy statements offer strategies to reduce vacant homes and house flipping.
Green party: The Green party promises to “raise the ‘empty home’ tax for foreign and corporate residential property owners who leave buildings and units vacant,” which the Liberals have recently proposed. They also commit to crack down on money laundering in Canadian real estate, and would introduce a beneficial ownership registry. Whereas the Conservatives would introduce a two-year moratorium on foreign buyers, and the NDP would expand BC and Ontario’s foreign buyers taxes across the country, the Greens don’t make any mention of these policy tools. The Greens also do not include any measure to discourage house flipping. Accordingly, we assign the party half a point for this criterion.
Part B: Dialing Down Harmful Demand – resist dialing up incentives for first-time buyers to borrow and bid more
Liberal party: The Liberal platform is stronger on this criterion than the other platforms. The party continues to resist calls to help first-time home buyers by weakening stress tests on mortgage borrowing, or extending mortgage amortization periods beyond 25 years. Instead, the Liberal platform aims to help younger Canadians access ownership through two unique policy measures. First, Liberals propose to help younger Canadians save more, faster. Younger Canadians are promised a special savings account that will combine the best of RRSPs and Tax-Free Savings Accounts (p. 12). Up to 40,000 can be saved in the account, and these savings can be deducted from earnings – which then saves income tax payments. Any investment returns to this $40,000 will also be sheltered from future income taxation. It’s an interesting initiative designed to help younger folks save for home ownership, without encouraging further borrowing.
Second, the Liberals maintain the “shared equity” model they put in place under the First-Time Home Buyer Incentive. This aims to help middle class families buy their first home, by reducing the size of the mortgage they require, and thereby reducing their monthly costs. The government contributes 5-10% to the purchase of the home; and then received the same portion of any increase (or decrease) in the home’s value at the time of sale. Informed by CMHC modelling, the shared equity program is not expected to inflate home prices in Canada beyond a maximum of 0.2-0.4%. By contrast, CMHC estimates that a reduction of one per cent in the mortgage insurance stress test or an extended amortization limit of 30 years would add to indebtedness and result in house price inflation that is 5-6 times higher than the shared equity intervention. In its 2021 platform, the Liberal party promises first-time buyers a choice between the original shared equity option and “a loan that is repayable only at the time of sale” (p. 12). While there are no other details, this new option may weaken the original strength of the shared equity model by resorting back to offering an option to borrow more. Further details are required.
These two Liberal strategies to support younger Canadians to save more, and borrow less, would earn the party a full point for this criterion. However, the Liberal platform includes one very strong counterpoint – a promise to increase mortgage insurance limits. At present Canadians can insure a mortgage with CMHC up to a $1 million. The Liberals propose to increase this maximum to $1.25 million. So, while the Liberals are working hard to support first-time buyers Canadians get into home ownership without borrowing more, they would make it possible to insure larger mortgages more generally. There appears to be an inconsistency in the Liberal logic. For this measure, we subtract half a point. This results in our awarding a half point in total to the Liberals for this criterion.
Green party: The Green party is silent on the issue of helping first-time buyers. This likely reflects that the party (p. 39) proposes to “re-focus the core mandate of the Canada Mortgage and Housing Corporation (CMHC) on supporting the development of affordable, non-market and cooperative housing,” claiming that “individual home ownership should not be the preoccupation of a public service housing agency and a national housing strategy.” While our comprehensive framework to restore housing affordability acknowledges the need to grow the non-profit sector, co-ops and rentals, the Green’s proposal to reorient CMHC to focus entirely on “non-market” housing makes it challenging to score the Green party on this criterion. On the one hand, the platform clearly forgoes any recommendations to lengthen mortgage amortization periods or soften stress tests, which is an asset. On the other hand, the platform does not include these kinds of deliberations in part because it less nuanced when it comes to understanding the role of the regular market in supplying homes to most Canadians. Recall, approximately 5% of Canadians live in below-market housing. If the Greens could double, triple or even quadruple this segment of the housing system (and they don’t offer any clear budget to do so), the majority of Canadians would still rely on the regular market to make a home – either as a renter, owner or in some other suitable form of market tenure. Neglecting this reality is a deficiency, because it signals the party brings a weak level of commitment to “fixing the regular market.” So we award no point to the Green platform for this criterion in recognition of both its strength and deficiency in regards to this theme.
Conservative party: To help young Canadians bridge the massive gap between local earnings and average home prices, Conservatives promises to make it easier to borrow more money (p. 56). They suggest creating new 7 to 10 year mortgages, and easing the mortgage stress test, which requires potential buyers to qualify at higher interest rates than are currently on offer by the banks to prevent them from falling behind in their payments if/when interest rates rise. Like the Liberals, the Conservatives would also increase eligibility for mortgage insurance beyond the current $1 million limit.
While we applaud the intention of this policy promise – to help first-time homebuyers – it is likely re-ignite demand for housing by inviting people to borrow more than they otherwise would. Helping individuals borrow more may somewhat mitigate their personal affordability barriers – but they risk breaking the housing system even further for those who follow. Access to cheaper credit makes it more likely that people will increase housing bids… and when they bid up housing, they contribute to propelling the average price of housing still further beyond what locals earn.
We subtract a half point from the Conservatives for this criterion.
NDP: Like the Conservatives, The NDP platform includes a key measure that risks exacerbating harmful demand – the promise to re-introduce 30-year terms to CMHC-insured mortgages on entry-level homes for first-time buyers (p. 12). Although we support the motivation for this commitment – reducing monthly mortgage payments for younger households – evidence shows that it is likely to spur price escalation. As discussed above with respect to the Conservative platform, access to cheaper capital can compound affordability challenges for those who follow. Measures like this impede progress towards the ultimate goal of reconnecting home prices to local earnings.
We subtract a half point from the NDP for this criterion.
Criterion 9: Do the platforms include action to dial up the right kind of supply in the regular market?
In ways that combat sprawl and encourage density and mixed-use in urban land already reserved for residences (protecting land required for industry, farming and green-space), with an emphasis on protecting/stabilizing existing affordable supply, adding so-called "missing middle" housing, family-sized units and purpose-built rental, and incorporating low/zero-emission goals into supply-side housing policy.
Conservative party: The Conservatives identify a lack of housing supply as the primary driver of Canada’s housing crisis. In response, their highest-level commitment is to build 1 million homes in the next three years. In the absence of a proposed budget, it is not clear how the party promises to do this. Plus, it’s worth noting that the market is likely to produce around 850,000 homes over the next three years, given the status quo. Any promise to build more homes should be evaluated in light of the Parliamentary Budget Officer estimate that 1.8 million Canadians will be in core housing need by the end of the next government’s term in office. There is clearly a large gap between the Conservative promise and the need for affordable housing in Canada. Moreover, the Conservative platform does not indicate how many of its million new homes will be affordable, offer 3+ bedrooms suitable for families with kids, be purpose-built rental, etc., or built to ensure low-emissions.
A key part of the Conservative platform is to incentivize the development of rental housing by permitting more capital gains tax deferrals when owners sell a rental property and reinvest in another (p. 55). The party will also explore whether unneeded office space can be converted to housing – thanks to an anticipated COVID-19 legacy of lasting shifts towards more remote and telework options (p. 55). No estimates are provided regarding the potential reach and impact of these measures, but it is possible that tax incentives could spur the construction of more rental housing – although it is not clear how many of the units would be purpose-built rental. Increasing the supply of rental should help to dampen rents, but concerns linger about whether blunt tax breaks can deliver new supply that is affordable for most renters.
We assign the Conservatives half a point to this criterion.
Liberal party: As discussed under criterion 6, the Liberal platform commits to build, preserve, or repair 1.4 million homes in the next four years (p. 13). Liberal and Conservative promises on increasing housing supply are effectively on par in terms of new units created on an annual basis, once the time frame for action is factored in. Also like the Conservatives, it is unclear how many of these new homes promised by the Liberals will be affordable.
The Liberals housing supply commitment includes a $4 billion Housing Accelerator Fund to give cities tools to speed up construction. The aim of this Fund is the creation of 100,000 new “middle-class homes” by 2024-25 (p. 13). What exactly is meant by a middle-class home is not discussed – so the significance of this language is unclear in terms of delivering homes that are affordable, suitable in size for families, energy-efficient, and/or prioritizing purpose-built rental.
The Liberals will allocate $1 billion in loans and grants to develop rent-to-own projects with private, not-for-profit, and co-op partners (p. 11).
Like the Conservatives, the Liberals propose converting empty office space into housing – but the Liberal promise is costed, investing an additional $300 million over 4 years (for a total of $600 million) (p. 13). The Liberals also allocate $514 million over 4 years to introduce a Multi-generational Home Renovation tax credit to support families who want to add a secondary unit to their homes, to allow a family member to live with them (p. 13). The overall impact of measures like these on housing supply is likely to be minor – and come with no guarantee of affordability.
The Liberal platform does include funding for residential retrofits to increase energy efficiency. Funds are targeted to Canadians in the regular housing market, providing grants of up to $5,000, and interest-free loans of up to $40,000 for deep retrofits (p. 45).
We allocate the Liberals half a point for this criterion.
NDP: The NDP commit to waive $125 million/year in GST that would other wise be paid on the construction of new affordable rental units (p. 7 of the NDP fiscal plan). It’s worth noting that the federal Liberals campaigned in 2015 on a similar promise to eliminate GST from new purpose-built rental units – which they then abandoned in favour of their Rental Construction Financing initiative out of concern that the tax break would not incentivize the construction of rental units that are affordable for many residents. Since forgoing the GST could offer a significant incentive to grow the total supply of rental, it is an idea that merits ongoing attention or refinement. More data about the pros and cons of the GST/HST waiver vs the Rental Construction Financing initiative introduced by the Liberal government as part of the National Housing Strategy would be useful.
Like the Liberals and Conservatives, the NDP plans to mobilize under-used federal lands – though also like the other parties, no further information is given about how much land appropriate for housing development could be at play. The platform also references providing resources and tools to facilitate co-housing models (private homes clustered around shared spaces), including CMHC-backed co-ownership mortgages (p. 12). As no details are provided, it is difficult to assess whether these commitments are at a scale large enough to have a significant impact on housing supply. It’s unlikely to generate a major impact, since co-housing tends not to be widely used in Canada.
So far, we allocate half a point to the NDP platform for this criterion.
Green party: Scaling up the right supply of housing in the regular market is less of a focus in the Green platform than it is for the other parties, because most of the Green housing promises focus on scaling up the supply of non-market housing – which we assessed above.
The platform (p. 39) does include one brief reference to “restor[ing] tax incentives for building purpose-built rental housing;” but makes no obvious mention of which tax incentives it wishes to restore. Perhaps the party is referring to its next bullet, which promises to “remove the ‘deemed’ GST whenever a developer with empty condo units places them on the market as rentals”? But such units are not purpose-built rental homes, so it’s not clear how the two points relate. Given the absence of sufficient detail, including some costing information for its promises, and in light of its overall intention to refocus the CMHC away from influencing the regular market, we do not award the Green platform a point for this criterion.
Criterion 10: Do the platforms dial up protections for renters and rental housing?
Including creating more affordable rental units, protecting existing affordable rental units, mandating rental building replacement upon redevelopment, and tenant protection and assistance policies – balanced with landlord and developer needs. Protecting rental options is growing in importance as home ownership moves out of reach for many younger Canadians, newcomers of any age, and the 20% of seniors who are renters.
Liberal party: The Liberals make two notable promises related to dialling up rental protections. They promise a federal plan to discourage “renovictions” that result in unfair rent increases that fall outside of a normal change in rent. The party proposes to “require landlords to disclose, on their tax filing, the rent they receive pre- and post-renovation, and implement a proportional surtax if the increase in rent is excessive” (p. 14).
A comprehensive strategy to restore housing affordability for all absolutely needs to increase protections for renters who face renoviction, demoviction, and vacancy control problems that can result in dramatic increases to rents when improvements are made to the existing stock of rental homes – all the while acknowledging that some existing rental supply is aging, and landlords have reason to recoup costs associated with making necessary repairs. Since many of the necessary regulations fall under provincial jurisdiction, more information is necessary to assess how meaningful the Liberal plan to discourage renovictions is. What we can say now is that the intention is noble, and supported by evidence.
The second promise concerns growing the number of rent-to-own options. Liberals promise to develop a new rent-to-own program to “help make it easier for renters to get on the path towards home ownership” (p. 11-12). A core principle informing the planned design of the program is that landlords commit to charging below market rents, to allow Canadians to build up savings for a down payment. A second principle is that landlords commit to ownership in 5 years or less – creating a specific timeline for the pathway to home ownership. More information is needed on whether this idea can be implemented at a scale capable of yielding a tangible impact on the supply of affordable homes. The platform fiscal plan prices it at just $550 million over 4 years, suggesting that reach may be limited. It is unlikely that rent-to-own schemes are a panacea to all that ails Canada’s housing system, and the resulting unaffordability.
The Liberals will continue with the Rental Construction Financing Initiative that they started as part of the National Housing Strategy. And the mandate of the Canada Infrastructure Bank started by the Liberals includes opportunity to support large-scale purpose-built rental developments to design the buildings to be low/no-emissions.
As the Liberals cover both protection for renters, as well as increased to rental supply, we assign them a full point on this criterion.
Green party: The Green party includes three promises that speak directly to this criterion. First, amid the pandemic, the party would impose a moratorium on evictions. Second, the Green party proposes a retroactive Residential Tenant Support Benefit to protect Canadians at risk of eviction or being driven into homelessness due to accumulated rent arrears. Third, the party proposes to “create national standards to establish rent and vacancy controls” (p. 38), which refer to efforts to contain increases to rents charged tenants who are currently occupying a home, and those who may come to rent a home after its been vacated by a previous tenant. While the party does not refer specifically to concerns about demovictions or renovictions, it is clear that the platform aims to provide national guidance about how to address these concerns.
However, the party speaks very little about growing the supply of rental units as a more general strategy to provide renters with increased protection from the problems that arise when there are insufficient rental options available. Accordingly, we award the Green platform half a point for this criterion.
NDP: As noted under criterion 9, the NDP promises to incentivize construction of new purpose-built rental housing by removing the GST from development costs (p. 11) -- which they estimate is a $125 million/year subsidy (see p. 7 of the NDP fiscal plan). The Liberals actually promised something similar in past elections, but shifted directions in favour of the Rental Construction Financing Initiative, citing concerns about the GST cut resulting in construction of unaffordable rental. As the NDP develop this proposal further, we hope they indicate how they would overcome this concern, as the promise has potential in terms of spurring rental construction.
The NDP also claim that they will deliver $1 billion in “immediate relief for families that are struggling to afford rent in otherwise suitable housing, while we bring forward long-term solutions to the housing affordability crisis” (p. 11). The party also alludes (p. 10) to “demo-victions” but does not include any information about how they would address this problem. In the absence of more details, it is difficult to assess this element of the NDP platform.
Still, the NDP appears to be heading in the right direction on rental housing. At present, we award them half a point for this criterion.
Conservative party: The Conservatives offer an interesting variation on increasing rental supply. They promise to encourage investments in rental housing by extending the ability to defer capital gains tax when selling a rental property and reinvesting in rental housing (p. 55). This is a policy idea Gen Squeeze will have to investigate further, because it is not something we have evidence about at this time. What we can say now is that tax incentives can be used to motivate the construction of more rental housing – and increases in supply should help to dampen rents. But concerns linger about whether blunt tax breaks can deliver new supply that is affordable for most renters.
The Conservative party does not refer to problems related to renoviction, demoviction, etc.
We give the Conservatives a half point for this criterion.
BREAK THE ADDICTION TO HIGH HOME VALUES
Criterion 11: Do the platforms help Canadians to earn money on things other than housing?
So long as many Canadians see home and land ownership as their safest and best investment and retirement savings option, they’ll put most of their eggs in that basket – making them dependent on home values continuing to rise for their financial security and wealth. To break this pattern, we need our political leaders to incentivize households to put more of their savings into other investments.
No parties receive full points for this criterion, because none of the parties promise to revisit the role of real estate in our nation’s approach to economic growth.
Real estate, rental and leasing represents the largest contributor to Canada’s Gross Domestic Product (GDP) at 14%. This industrial sector is bigger than manufacturing; bigger than mining, oil and gas; bigger than construction; bigger than health care; bigger than financial services; bigger than professional, scientific and technical services; and so on (See the Figure). Real estate has also grown as a share of GDP in all provinces over the last two decades, and often has been the fastest growing part of provincial economies.
Anchoring our economic growth on real estate would be a fine economic strategy – if Canada was also generating a large portion of its employment in this same industrial sector. But we don’t. Canadians find less than 2% of employment in the real estate sector. No other industrial sector has such a big gap between its share of GDP and its share of employment.
This highlights a problem. It signals that Canadians have been growing our economy
by increasing the major cost of living, without generating jobs in that industrial sector
in numbers sufficient to ensure that local earnings keep pace, especially in urban centres. The 2% who find employment in real estate generally attract high incomes. Existing property owners, gain housing wealth, which will propel our spending and consumption, and drive up GDP. It’s one way to grow an economy – but it’s not a good way if we prioritize hard work paying off for younger people and newcomers to Canada. Paying off in terms of generating earnings that can cover their primary cost of living – housing.
During this election, the best economic managers should be honest that we need to rethink the role of real estate in our strategies for economic growth. Instead of an economic stimulus strategy that relies on driving up the primary cost of living, it is time to imagine an economy that is stimulated by a housing system which reconnects the cost of living to local earnings in order to support affordability that attracts employment and fosters growth in other industries. Reasonable concerns that stalling home prices may in turn stall GDP must be balanced against this alternative vision of how to stimulate genuine prosperity.
Liberal party: The Liberal platform includes two commitments that speak indirectly to this theme. The first promises to “adopt quality of life budgeting” by “building on the work done over the last two years to develop Canada’s first-ever quality of life framework” (p. 76). This framework aims to “measur[e] what matters” in recognition that GDP is a blunt measure of economic progress. The framework explicitly identifies housing affordability as a key consideration when evaluating whether a government’s economic strategy is promoting a high quality of life. This is good news, because the true measure of economic prosperity is whether the economy requires less work to cover our major costs of living, and whether it is sustainable over time economically, socially and environmentally. Presently, our economy is not serving these goals well, and our reliance on housing to grow GDP is a primary culprit.
The second Liberal commitment promises to “increase the power of federal regulators to respond to housing price fluctuations and ensure a more stable Canadian housing market” (p. 15). It’s unclear what the party means by this commitment. It might signal the possibility of encouraging Statistics Canada to better account for housing price inflation in its measure of the Consumer Price Index. Or it might invite the Bank of Canada to consider how best to deploy low interest rate policy to spur the economy – while reducing as much as possible the collateral damage that access to cheap credit creates for housing affordability by supporting buyers to bid up home prices. If so, then this comment in the Liberal platform could prove to be an important measure to restore housing affordability for all, and we would award a full point to the platform for this criterion.
Given what we know now, we award half a point for the Liberal promise to conduct Quality of Life budgeting.
NDP: The NDP platform does not include material that speaks directly to this criterion. No points are awarded.
There is actually reason to worry that the NDP proposal to retain large tax shelters for principal residences while increasing the capital gains inclusion rate from 50% to 75% has the potential to accelerate the degree to which Canadians treat housing as an investment strategy because it will become even more sheltered from taxation by comparison with almost all other assets.
Conservative party: The Conservative platform does not include material that speaks to this criterion. No points are awarded.
Green party: The Green platform is difficult to assess in regards to this criterion. On the one hand, we have seen already that it aims to refocus the CMHC’s mandate to focus on the development of non-market housing, and away from home ownership. This would result in a shift in the housing system that is likely to discourage lending for mortgages, and thereby propel Canadians to consider other alternatives for growing their savings and wealth. That change in incentive could align with the logic underpinning this criterion to help Canadians make money on investments outside of real estate. On the other hand, we have observed earlier that this recommendation to reorient the CMHC mandate appears to reflect insufficient nuance in the Green platform as it relates to the role of the regular market in supplying housing for most Canadians, either as owners or renters. (See criterion 8, part B). This lack of nuance is a deficiency. Given the combination of an asset and a deficiency, we award no point for this criterion to the Green platform.
Criterion 12: Do the platforms support decreasing income taxes, and increase wealth taxes?
One key reason Canada is addicted to high home values is our relatively low taxation of residential property wealth. In the context of runaway prices, this limited taxation inflates demand and average costs, contributes to inequalities and unaffordability, and makes homeowners increasingly dependent on high and rising values. Canadians need a tax shift. This means that our political parties should commit to lowering taxes on income, and raising taxes on property wealth.
Liberal party: As discussed in criterion 8, the Liberal platform (p. 14) includes the commitment to “establish an anti-flipping tax on residential properties” to discourage people from buying and reselling homes within 12 months in search of windfall gains, rather than a place to call home. This change would address the most egregious way in which some people exploit the tax shelter that exists for principal residences.
The Liberals also promise to “stop excessive profits in the financialization of housing” (p. 15), especially by Real Estate Investment Trusts (REITs). REITS are amassing large portfolios of Canadian rental housing, and often drive up rents as a result – or displace existing renters. For more information, check out The Shift. The Liberals propose to review the tax treatment of these large corporate owners, review the down payment requirements for investment properties, and to put in place polices that cur excessive profits in this area of the economy, while protecting small independent landlords.
Similar to the NDP, the Liberals also propose a “Luxury Tax” on high priced cars, planes and boats – as previously announced in the 2021 Budget. While this may acknowledge the prospect of greater taxation related to wealth, at best it nibbles at the edges. We can ask more of Canadians who have gained substantial wealth windfalls from rising home prices – even if they haven’t used this wealth to buy a yacht!
We award the Liberals half a point for this criterion.
NDP: The NDP raise the concept of taxing wealth more than any other party. The NDP platform specifically proposes “a new deal for tax fairness” based on a core promise that “the wealthiest pay their share” (p. 39). The NDP proposes to accomplish this through increases to the top income tax rate, increasing the share of capital gains that are subject to taxation (from 50% to 75%), increases to corporate taxation, a new luxury goods tax, and a new wealth tax on “the very richest multi-millionaires”. The focus on taxing wealth (and not just income) is consistent with evidence showing that it is returns to wealth/capital that are primarily driving inequality in Canada and across the globe.
Still, two key weaknesses stand out in the NDP approach. Despite focusing on taxing wealth more than any other party, the NDP are generally silent about the most common kind of wealth that Canadians hold – housing wealth. This is a serious shortcoming. What is worse, there is actually reason to worry that the NDP proposal to retain large tax shelters for principal residences while increasing the capital gains inclusion rate from 50% to 75% has the potential to accelerate the degree to which Canadians treat housing as an investment strategy because it will become even more sheltered from taxation by comparison with almost all other assets.
Second, the NDP’s promises appear to be grounded in the idea that reforms to our tax system only need to target the uber rich – those who have tens of millions of dollars in assets. This approach does not jive with the fact that skyrocketing home values have made many regular Canadians into housing wealth millionaires, while leaving less affordability for the children and grandchildren who follow in their footsteps.
For these reasons, we do not award the NDP any points for this criterion even though we acknowledge they talk about taxing wealth (but not housing wealth) more than other parties.
Green party: The Green party platform shares many similarities to the NDP platform on this issue. It proposes “an arm’s length Federal Tax Commission to analyze the tax system for fairness and accessibility.” It would add a 1% tax on net family wealth above $20 million, and increase the portion of capital gains subject to taxation. In terms of real estate, the Green platform is slightly stronger than the NDP platform because Greens (p. 38) propose to “assess the role of real estate investment trusts (REITs) in Canada’s housing market.”
Still, like the NDP, even though the Greens focus on on taxing wealth more, the party is generally silent about the most common kind of wealth that Canadians hold – housing wealth. This is a serious shortcoming. In addition, the Green party’s tendency to focus on the uber rich obscures that skyrocketing home values have made many regular Canadians into housing wealth millionaires (albeit often less than $20 million), while leaving less affordability for the children and grandchildren who follow in their footsteps. For this reason, we award no point to the Green platform at this time.
Conservative party: The Conservative platform pre-emptively rejects the possibility of rethinking one key way in which we privilege gains in housing wealth over employment earnings – the exemption of principal residences from capital gains taxation (p. 57). While every dollar of labour income is taxed (subject to deductions), capital gains on principal residences are tax-free. Sheltering gains in housing wealth from taxation is not only a huge financial advantage for home owners – it also gives them a personal stake in home prices continuing to rise to augment their own wealth, at the expense of affordability more generally.
Although no party has proposed to fundamentally rethink the tax shelter on principal residences, the Conservatives refusal to even consider this approach suggests a concerning lack of openness to evaluating policy proposals based on the evidence – and only then determining what is in the best interests of ALL Canadians. We need our political leaders to have the courage to look at all of the options available to address the housing crisis that the Conservatives acknowledge is a major problem in Canada. For this reason, we deduct half a point from the Conservative party for this criterion.
Criterion 13: Do the platforms cushion the impact of a price drop?
Unless Canadians' earnings dramatically increase (which is unlikely), the only way to close the affordability gap is to stall housing prices – while simultaneously mitigating the risks this may create for highly leveraged households and the Canadian economy.
Since none of the parties have stated explicitly that restoring affordability for all requires home prices to stall to give earnings a chance to catch up, no party is strong at talking about this theme.
Liberal Party: The shared-equity First Time Home Buyers’ Initiative is a component of the Liberal platform that speaks indirectly to cushioning the impact of a price drop. By offering to take on a 5-10% share of the home with the buyer, the Government of Canada takes on a small portion of the risk that home prices may fall (and conversely, a share of the increased wealth if home prices rise). However, the Liberal 2021 platform appears to water down this protective measure by offering “a loan that is repayable only at the time of sale” (p. 12). We only award half a point to the Liberals.
NDP: The NDP platform doesn’t include any policy recommendations to address impacts from a stall, or decline, in housing prices. In fact, the party’s proposals to lengthen mortgage terms will likely motivate households to borrow more and take on more debt, especially first-time buyers. This means the NDP platform risks enticing more Canadians to become over-leveraged with housing debt – and to do so at a point in time when promoting housing affordability requires prices to stagnate, and drop, by comparison with earnings/inflation. For this reason, we award no points for this criterion.
Conservative party: The Conservatives platform does not appear to contemplate home prices stalling, and does not include measures to mitigate challenges for those who are especially leveraged. For this reason, we award no points.
Green party. The Green party also does not consider this policy area. We award no points.
Criterion 14: Do the platforms propose actions to improve housing governance?
To ensure that everyone in Canada can afford a home that meets their needs, Indigenous, federal, provincial, territorial, and municipal governments need to work together.
Conservative party: The Conservative platform calls for the creation of a “For Indigenous, By Indigenous” housing strategy. Although specifics are lacking in terms of whether there will be dedicated investments behind this plan, the Conservatives highlight the need to partner with, and empower, Indigenous communities “with the autonomy to meet their own housing needs” (p. 55).
We give the Conservatives half a point for this criterion.
Liberal party: The Liberals promise to appoint a new Federal Housing Advocate within their first 100 days in office “to ensure that the federal government’s work towards eliminating chronic homelessness, as well as other housing commitments, are fulfilled” (p. 14). The creation of a specific ‘point person’ to monitor housing actions may be an interesting support for improved governance – but much will depend on whether the person in this position has the power to motivate action.
The Liberals also promise to co-develop with Indigenous partners an Urban, Rural, and Northern Indigenous Housing Strategy, and a National Indigenous Housing Centre which will see Indigenous people overseeing federal Indigenous housing programs.
We award the Liberals half a point for this criterion.
NDP: The NDP make similar commitments as the other parties on Indigenous housing, promising to co-develop an Indigenous National Housing Strategy. The NDP go a step beyond the other parties, indicating that this strategy will be “fully funded” (though neither amount or source of funds is given), and that it will be created “within our first 100 days in office” (p. 75). The level of ambition demonstrated by the NDP is laudable – and we hope that it will be back up with specifics in the future.
The NDP receive a half point on this criterion.
Green party: The Greens (p. 39) propose housing strategies “for Indigenous Peoples and by Indigenous Peoples.”
It also proposes to “appoint a Minister of Housing to meet the needs of affordable housing that are unique to each province, oversee its implementation in collaboration with provincial ministers, and build on other aspects of the housing and homelessness crisis in Canada to tackle these issues.” This is an odd promise, because Canada already has a Minister responsible for Housing who liaises with provincial ministers, cities, etc. This work falls into the mandate of the Minister responsible for Employment and Social Development. We charitably interpret the Greens to be suggesting that our country needs a dedicated national Housing Minister whose time is sheltered from other portfolio distractions because the housing unaffordability challenges are so great.
The Greens receive a half point for this criterion.
Criterion 15: Do the platforms include actions to improve housing data?
Including through a national beneficial ownership registry, additional information on global capital flows into Canadian residential real estate, and the current extent of non-resident and investor ownership of local housing.
Liberal party: The Liberal housing platform proposes the creation of a beneficial ownership registry, to increase transparency in real estate and help fight financial crime (p. 14). We assign a half point for this criterion.
NDP: The NDP also commit to developing a beneficial ownership registry, citing similar motivations as the Liberals (p. 12). We assign a half point for this criterion.
Conservative party: The Conservatives also are on board with beneficial ownership registry (p. 56). We award half a point for this criterion.
Green party: To round things out, the Greens also commit to the beneficial ownership registry (p. 38). Once again, we award half a point for this criterion.
Further advances in data collection are required to establish a capital flows data program to understand the total flow of investment capital into Canadian residential real estate, which may occur through individuals purchasing investment properties, as well as corporations, investment funds or other entities. In addition, we encourage parties to develop a database on pre-sale condominium assignments to support federal and provincial tax authorities to ensure taxes are paid; along with a plan to support the CRA to continue improving its measurement of the capital gains that people incur upon the sale of principal residences.