Is Justin Trudeau to blame for the housing crisis in Canada?

Canada’s out-of-control housing market is finally starting to affect how the country views Prime Minister Justin Trudeau. But is the current state of housing really Trudeau’s fault?

Housing across the country has become a pressing issue according to Canada’s largest market research firm Ledger, which noted inflation and interest rates have not helped.  

In a recent survey from Leger conducted between August 18th and the 20th, pollsters found that at least 55% of Canadians said that they had worried about paying either their mortgage or rent in the previous two months. 

Canadians who haven’t gotten onto the property ladder yet are in even more dire straits since the average cost of a house across the country has risen to unsustainable levels.  

The Canadian Real Estate Association noted on its website that the average price of a home in Canada in July reached $668,754 dollars—which was 6.3% year-over-year.  

The pressure on Canadians has begun to boil over and many have placed the blame on Justin Trudeau and the federal government, a fact that Leger’s latest polling revealed. 

Leger discovered that 40% of respondents to the market research firm’s survey on the housing crisis in Canada thought the federal government was to blame for the issues.

It's an issue Trudeau’s political opposition has been hammering the prime minister over with Conservative Party leader Pierre Poilievre explaining to reporters in early August what eight years of Trudeau had given to Canadians according to Bloomberg News.

“Rent has doubled. Mortgage payments doubled. Needed down payments, doubled. All after eight years of Justin Trudeau,” Poilievre said. But not everyone believes Trudeau and his government are to blame for the current housing crisis. 

“Given the depth of the problems, the instinct to look to the top makes emotional sense,” explained the Globe and Mail’s Michael Muraz, adding the sentiment to blame Trudeau betrayed a lack of understanding about how housing in the country worked. 

Muraz laid the blame for the housing crisis on the country’s cities and their restrictive zoning policies that prevented the building of the types of housing stock the country needed in order to meet the challenges of the crisis.

“The core issue, amid the surging demand of a rising population, is an inability to build enough new homes,” Muraz explained, adding that too much land in Canada was zoned for low density while the four-story apartments needed were “illegal on most civic land.”

“The provinces oversee cities and for too long ignored civic rules that heavily restricted new housing. It’s only in the past year that premiers in Ontario and British Columbia were finally roused that something might be amiss,” Muraz said. 

However, Muraz conceded Trudeau and his government heightened immigration without a thought to how it would affect the housing market and subsidized home buyers rather than putting policies in place that would lessen demand and reduce prices. 

But while the current housing crisis may not be the fault of the federal government there is still something Trudeau could be doing to help according to the Toronto Stars’ David Olive, who argued a huge investment into affordable housing could end the crisis. 

Ottawa built millions of low-cost homes known as Victory Homes in the wake of World War II and provided money and land to help accommodate millions of immigrants to the country in the 1960s and 1980s. 

Photo Credit: Wiki Commons

According to Olive, a similar program from the federal government today would create value across the housing market and provide short-term relief from the housing crisis. “As in past housing shortages, this crisis requires the feds to play the lead role.”

Photo Credit: Wiki Commons

“The feds have the lion’s share of funds, land, tax incentive power, and moral suasion with provinces, municipalities, for-profit developers, and nonprofits to spur a national project of decent affordable housing for all,” Olive added.