Toronto

Measures in federal party platforms 'not enough' to curb GTA's soaring housing prices, expert warns

With the release of the federal Liberals' election platform on Wednesday, all three of the country's major parties have set out their key promises to Canadians. But one expert doesn't think much of their measures to make housing more affordable.

Parties target housing affordability as GTA's average housing price breaks $1M mark

The average price for all home types combined in the Greater Toronto Area as of July was $1,062,256 — up 12.6 per cent compared to July 2020, according to the Toronto Regional Real Estate Board. (Graeme Roy/The Canadian Press)

With the release of the Liberal Party's election platform on Wednesday, all three of the country's major parties have set out their key promises to Canadians, and housing affordability has emerged as a key theme across all of them.

It's not surprising that the parties are focusing on the problem. Recent opinion polls suggest affordable housing is at or near the top of the list of election issues for voters. The average price for all home types combined in the Greater Toronto Area as of July was $1,062,256 — up 12.6 per cent compared to July 2020, according to the Toronto Regional Real Estate Board.

While the Liberals and Conservatives have tried to bring overall housing prices down and increase supply, the New Democratic Party has zoned in on social housing.

However, at least one expert warns these pledges alone won't end the housing crisis, especially in the GTA and much of Ontario. 

"None of these plans go far enough," Mike Moffat, senior director of policy at the Smart Prosperity Institute in Ottawa, told CBC News.

Liberals push 'first-home savings account'

Liberal Leader Justin Trudeau released his election platform several weeks after Conservative Leader Erin O'Toole and NDP Leader Jagmeet Singh released theirs. 

The centrepiece of the Liberals' housing program is a "first-home savings account" — where money would go in tax-free and could be withdrawn without any taxes owing on investment gains. 

Liberal Leader Justin Trudeau reveals his party's election platform during the Canadian federal election in Toronto on Wednesday, September 1, 2021. The Liberals are pushing a 'first-home savings account' — where money would go in tax-free and could be withdrawn without any taxes owing on investment gains.  (Nathan Denette/Canadian Press)

The program, which the Liberals estimate would cost the federal treasury some $3.6 billion over the next four years, is meant to make it easier for some first-time home buyers under 40 to scrape together enough money for a down payment.

The party has also committed to:

  • Building, preserving or revitalizing nearly 1.4 million homes by 2025-26.
  • Doubling the Home Buyer's Tax Credit.
  • Investing $4 billion in a new Housing Accelerator Fund for municipalities.
  • Pledging $1 billion in loans and grants to develop a new rent-to-own program between landlords and renters.

Trudeau said he would also reduce the price charged by the Canadian Mortgage and Housing Corporation on mortgage insurance by 25 per cent.

Conservatives focus on supply

The Conservatives' housing pledges predominantly aim to increase supply while curbing speculation.

O'Toole's platform sets out a plan to:

  • Build 1 million homes over the next three years.
  • Release at least 15 per cent of federally owned real estate for housing — thus significantly boosting supply.
  • Ban foreign investors not living in Canada and new arrivals from owning a home here for at least two years.
  • Remove the requirement to conduct a stress test when a homeowner renews a mortgage.
  •  Encourage developers with deferred capital gains taxes when a rental property is sold to reinvest in rental housing.
Conservative Leader Erin O'Toole's platform attempts to increase the housing supply. (Frank Gunn/The Canadian Press)

O'Toole said he would also encourage a new market in seven-to 10-year mortgage terms.

Lastly, the Conservatives say they would invest $325 million over the next three years to create 1,000 residential drug treatment beds and build 50 recovery community centres.

NDP emphasizes social housing

The NDP's platform also promises an array of policies aimed at bringing down the cost of homes, including:

  • Building 500,000 units of quality, affordable housing in the next 10 years, with half of that done within five years.
  • Waiving federal sales tax on the construction of new affordable rental units.
  • Imposing a 20 per cent foreign buyers tax on the sale of homes to individuals who aren't Canadian citizens or permanent residents. 
  • Setting up dedicated fast-start funds to streamline the application process for things like co-ops and non-profit housing.
  • Mobilizing under-used federal lands for non-profit housing projects.
NDP Leader Jagmeet Singh's election platform includes a focus on social housing. (Paul Chiasson/The Canadian Press)

Also, the New Democrats say they would reintroduce 30-year terms for mortgages insured by the Canada Mortgage and Housing Corporation on entry-level homes for first-time home buyers.

Similar to Trudeau, Singh would also double the Home Buyer's Tax Credit. 

'More needs to be done'

But Moffat doesn't find much of what's in the party platforms very convincing.

He said the housing crisis preceded the pandemic, when 60,000 people in search of cheaper housing moved out of Toronto to other parts of the province, and prices have only gone up since then. 

He said the term "affordable housing" means homes that account for no more than 30 per cent of a family's income — and "most housing in the GTA does not meet that criteria."

WATCH: The housing platforms from the Liberals, Conservatives and NDP

The housing platforms from the Liberal, Conservative and NDP governments

1 year ago
Duration 2:40
Liberal leader Justin Trudeau was in Toronto today to unveil his party’ platform. The Liberals are the last of the top three national parties to show Canadians their plans. According to polls, at the top of mind for Canadians during this federal election is the issue of housing. Chris Glover has more on what each party is promising on this front.

The Conservatives and Liberals are taking a "less ambitious" approach to focus on the "market side" of the housing crisis, Moffat said, while the NDP is focusing on increasing social housing and co-ops. 

"The housing we are seeing built tends to be out in what's currently rural areas," he said.

"We're seeing massive amounts of sprawl. So both the Liberal and Conservative plan are designed to help address that issue," he said.

When asked which of the party's plans was most effective, Moffat said the Liberals had the most "aggressive approach."

"There's more that's going to need to be done. But I think the Liberal approach on the housing accelerator has the most potential, but it's also the most untested."

Nonetheless, Moffat said he was "skeptical" of each party's ability to fulfil their promises on affordable housing.

"We've seen the current government, as well as provincial governments and municipalities, put a lot of money into building affordable housing but that money just sits there," he said. 

"They can't get the approvals they need to actually get shovels in the ground and to overcome local opposition to some of these projects and actually get those projects built."

He also said he was "very concerned" for first-home buyers, as mortgage and insurance rule changes would only allow people to make larger bids, rather than addressing the core issue.

"The problem is, if you allow these people to place larger bids, that's actually just going to drive the prices up even further. So while you might help some individuals, you're making the overall problem worse."

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