It's one new home every two minutes ... for seven consecutive years
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As part of a routine rollout of pre-budget announcements, last week the Trudeau government casually announced that it was going to solve the housing crisis.
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In a Friday press release headlined simply “Canada’s Housing Plan,” the Prime Minister’s Office laid out a plan to “unlock 3.87 million new homes by 2031.”
“Canada can and will solve the housing crisis,” read an attached quote by Housing Minister Sean Fraser.
In the media, it was mostly treated as yet another Liberal housing pledge, similar to the week before when the PMO had launched a new “rental protection fund.”
“Federal government launches new housing strategy,” read CBC’s headline on the plan.
But what Ottawa has just pitched as a pre-budget bauble is one of the most mammoth promises ever issued by a Canadian federal government.
In terms of cost, effort and raw logistics, building 3.9 million homes in just seven years would easily rank as one of the most awesome expenditures of national effort outside of the world wars.
It is 552,857 new homes constructed every year for seven consecutive years, in a country that already struggles to build half that each year.
For the last 10 years, the annual rates of new homes has averaged just 197,000. In fact, as per the latest estimates from the Canada Mortgage and Housing Corporation, the most optimistic forecast is that homebuilders will be able to break ground on 232,267 homes by year’s end (the “pessimistic” scenario is that they’ll manage only 215,989).
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The 552,857 figure is daunting even by the standards of the 1970s, when the federal government spurred a massive boom in homebuilding, a record that hasn’t been topped since.
At the peak of that boom in 1974, Canada was able to roll out an all-time high of 257,243 new homes. Even if that figure could be scaled up in proportion to Canada’s current population size, it would still come out to just 411,000 new homes.
And that was in an era where homebuilding was relatively easy; building codes were lighter, municipalities were more permissive and Canadian cities were surrounded by cheap farmland that could be easily converted into subdivisions.
To be fair, Friday’s plan only promises 2 million “net new homes.” Under current forecasts, about 1.87 million homes will be “built anyway by 2031,” according to a backgrounder on the plan.
So, the Liberal plan is simply to increase that figure overnight by 108 per cent.
Still, that’s 287,714 “net new homes” each year until 2031. Or, 783 extra homes per day. Or, one “net new home” every two minutes for the next seven years.
If, as a result of the Canada Housing Plan, Canada somehow managed to build an entire second Alberta, it still wouldn’t be enough to reach the target.
Across 119 years of recurring homebuilding booms, Alberta still has a total of just 1,633,220 “occupied private dwellings” as per the 2021 census.
So to meet the 2 million “net new homes” figure by 2031, Canada would also need to build a second Saskatchewan. That province had a combined total of 449,585 occupied private dwellings as of 2021.
The figure of 3.9 million homes is not pulled out of thin air. It appears to be based on a 2023 estimate by the CMHC which found that Canada would need to build “about 3.5 million additional housing units by 2030 to restore affordability.”
Affordability, in that case, is defined as restoring housing prices to what they were in 2004; effectively the last year when Canadian real estate prices were still a reflection of local incomes.
But that would be 3.5 million “additional” housing units on top of Canada’s anticipated rate of new builds. So even if the new federal plan meets its target of 2 million “net new homes,” it’s still 1.5 million short of the CMHC estimate.
As to how the feds intend to unlock 3.87 million new homes by 2031, it’s a mixture of tax credits, low-interest loans, red tape reduction and – one of the weirder pledges – a Housing Design Catalogue of free standardized home designs.
Mike Moffatt, a real estate economist who has been vocal in pushing policies to spur home development, reacted to the Friday plan by saying, “I can’t confirm that this is the boldest housing plan in Canadian history, but this is easily the boldest in my lifetime, and I’m pretty old.”
But for a plan pledging unprecedented rates of home-building in record time, it wasn’t hard for Moffatt to find areas where the feds had left money on the table. For instance, it had very little to address skyrocketing rates of fees and charges driving up development costs.
“This looks to be about 50 per cent new material and 50 per cent previous announcements,” he wrote in an X post.
Trudeau isn’t the only one making promises for the next decade. The Parti Québécois is once again promising to hold a secession referendum (this would be the third one), and party leader Paul St-Pierre Plamondon says he suspects that Quebec’s statehood should all be wrapped up by 2030. This used to be harmless bluster from a fringe party that nobody in Quebec listened to anymore. But recent polls have shown Plamondon benefiting from a massive drop in support for the incumbent Coalition Avenir Quebec, a party largely formed from Quebec nationalists who were tired of all the time the Parti Québécois spent on plotting new referenda.
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