Former Deputy PM Blames 1980s Policies for Canada’s Housing Crunch

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The persistent housing crunch in Canada can be traced back to decades of flawed policies, with the federal government’s decision to transfer housing issues to provincial governments in the 1980s at the root, according to former Deputy Prime Minister Sheila Copps. In a recent candid discussion, Copps expressed that when Canada Mortgage and Housing Corporation (CMHC) had a proactive role in housing construction, there was generous national investment, a comprehensive housing policy, and an effective strategy in place.

In 1987, a critical decision was made to withdraw federal involvement in housing. This decision triggered a 30-year period marked by underdeveloped housing and a lack of sound public policy analysis on housing matters, Copps explains. This period, she believes, has led to some of the key housing issues Canadians face today.

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In the 1970s, the national government had a more direct role in building housing, including the construction of senior and Indigenous homes. This approach shifted dramatically in the 1980s when provincial governments were handed the reins of housing policy. Copps acknowledges that while some provincial governments, like Quebec, allocated funding to social housing, several others failed to do so. She believes this shift played a significant role in the mismanagement of housing funds.

The federal government distanced itself from housing issues until 2017, when the Liberals, led by Justin Trudeau, reinstated federal involvement in housing matters. Copps appreciates this proactive stance towards handling the shortage and affordability issues prevalent in Canadian cities. However, she acknowledges that it will take time to rectify a problem that has been brewing since federal withdrawal in 1987.

In her view, the role of the national government is sometimes vital to resolving issues. Leaving it up to the 10 provinces and three territories may not always yield the best outcome.

Moreover, Copps also voiced her opinion on incentivizing migration out of densely populated areas as part of federal housing strategy to supplement the increase in housing supply. She argued for exploring the disparities in housing prices between rural/remote communities and urban areas to encourage movement.

She further articulates that learning from the pandemic, it’s apparent not everyone needs to reside in downtown hubs, like Toronto. Significant potential exists for encouraging people to consider migrating to different areas via perks such as extra points for a registered homeownership investment plan. A national government committed not only to building housing but also to contemplating these aspects could prove beneficial, Copps concluded.