Housing Strategy Debunked

The National Housing Strategy (NHS) was launched in 2017 with fanfare, and this week the Parliamentary Budget Officer (PBO) provided a critical assessment of that strategy. It is a good, succinct, no-nonsense assessment. Most notably, the PBO observes that new federal strategy overstates the resources committed, reduces support programs for those most in need, and substantially reduces the funding for community-based housing.

Canada Mortgage and Housing Corporation (CMHC) delivers almost all the housing programs. The PBO compared projected expenditures for the next ten years to the average of the last ten years. First, the increase is only 15% in nominal dollars, and the declining purchasing power of these appropriations, due to inflation, makes them only marginally higher than recent years. In fact, housing program expenditures, as a % of GDP, will decline to less than 0.1%, almost half of what they were in 2009-10.

Overall, the PBO says government uses slight of hand to call the NHS a $40B strategy, preexisting and new Federal funding totals only $30.2B over ten years if all matching funds are raised from provinces and territories.

The PBO makes specific note that programs that target low income households, “Assistance for Housing Needs”, will see a decline in funding.

And lastly, the PBO states that the NHS gives declining support for community based non-market rental housing. While the case for co-op and non-profit housing has grown stronger in Vancouver and other urban centres, the NHS seems intent on following the same path that has created a housing crisis in Canadian cities.

The NHS is not a serious new commitment to address our urban housing problems. The PBO closes with this polite dismissal of the NHS, “It is not clear that the National Housing Strategy will reduce the prevalence of housing need relative to 2017 levels. Overall, Canada’s National Housing Strategy largely maintains current funding levels for current activities and slightly reduces targeted funding for households in core housing need. CMHC’s assumptions regarding the impact of NHS outputs on housing need do not reflect the likely impact of those programs on the prevalence of housing need.”

On a related note, SFU’s Josh Gordon has analysed data from Stats Canada to clearly document the role of foreign investment the Greater Vancouver housing market. And the CCPA has released a good paper on policy options for government.

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