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Moving Chairs on the Titanic Canadian Housing Crisis!

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Government continues to fail to heed warning signs, preferring to make symbolic gestures on the housing crisis at best and make things more difficult at worst. Negligence, incompetence, or something else entirely, you decide.

The Titanic Comparison to Canadian Real Estate

Lessons Unlearned

The analogy of rearranging chairs on the Titanic serves as a stark reminder of the dangers of inaction and bold-headedness without consideration of the facts leading up to and in the face of impending disaster.

The government has ignored the warning signs and now are forcing all the passengers to suffer the consequences. Just as the crew of the Titanic scrambled to rearrange furniture while the ship sank beneath them, Canadian authorities’ risk being consumed by the housing crisis unless they take decisive action if that is still possible in a system that seems to reward avoidance of responsibility.

Following up from last month’s blog, Canada is facing a housing crisis of monumental proportions that has been growing for decades. With rapidly increasing mortgage interest rates, unchecked immigration, skyrocketing prices, dwindling affordable options, and a growing homelessness issue, the situation demands urgent attention.

Yet, the actions taken by both federal and provincial governments often seem similar to rearranging deck chairs on the Titanic – busy work that fails to address the looming disaster. In this blog, we’ll examine how the efforts of Canadian authorities parallel this infamous metaphor.

Federal Government 

Rearranging Policy Priorities

For decades, the Federal Government stayed out of the housing situation and as recently as August 2023 Prime Minister Justin Trudeau stated responsibility on the matter lays mostly with the provinces and territories,” and went on to say “I’ll be blunt as well — housing isn’t a primary federal responsibility. It’s not something that we have direct carriage of.”, but when it permits over a million immigrants into the country in 2022 alone, and an additional 471,000 in 2023, it is a contributing source of the problem. The federal government should at least be acknowledging and taking some responsibility for this situation.

Due to a lot of pressure, the federal government has introduced various measures aimed at addressing the housing crisis, but their efficacy remains questionable. For instance, initiatives like the First-Time Home Buyer Incentive (now scrapped) and the National Housing Strategy have been criticized for their limited impact on affordability.

While these programs may have provided temporary relief for some, they did and do little to tackle the underlying issues driving the crisis.

Much like rearranging chairs on a sinking ship, these policies create an illusion of progress while failing to address the root causes of the problem.

Without meaningful interventions to increase housing supply, curb speculation, and support vulnerable populations, the federal government risks perpetuating the cycle of unaffordability.

This housing crisis has hit a level that the Prime Minister could not blame foreign buyers, investors, developers, realtors and so he could no longer ignore or avoid it. As a result, both Trudeau and his various ministers have started announcing various “policies” and freeing up money to put bandages on this dire situation.

Here are some of the recent Federal Government announcements regarding the housing affordability crisis in Canada:

October 26, 2023: Exemption for Atlantic Provinces home heating fuel (oil) from the Carbon Tax

December 21, 2023: $471 Million Housing Deal to be given to Toronto for housing

January 16, 2024: $230 Million in financing for Toronto for rental housing construction

February 20, 2024: Pledges $2 Billion in Loans for BC Housing

March 29, 2024: Proposes a Renters Bill of Rights but there is nothing for the landlords rights

April 2, 2024: Pledges $6 Billion in housing and infrastructure with strings attached

April 4, 2024: Extends the Foreign Buyer Ban for two more years to 2027

April 4, 2024: Launches $1.5 Billion Rental Protection Fund

April 11, 2024: To Permit 30-year Mortgage Amortization for first- time buyers on New Homes

Hmmm! Could there be an election next year?

Not every province is on board with the Federal Government’s funding announcements.

Provincial Governments

Navigating Local Realities

Provincial governments also play a crucial role in housing policy, but their responses have been fragmented and inconsistent. While some provinces have implemented measures such as foreign buyer taxes, short-term rental restrictions, flipping taxes, empty home taxes, and rent controls, others have been slow to act or have focused on initiatives with limited impact.

In many cases, provincial governments find themselves constrained by antiquated policies, economic realities, and political considerations, much like the Titanic’s crew navigating the icy waters of the North Atlantic. Despite their “best efforts”, they struggle to enact meaningful change without federal support and coordination at ALL Levels.

To avoid this fate, both federal and provincial governments must prioritize real and bold, transformative actionable policies aimed at addressing the structural issues driving the housing crisis. This includes measures to increase affordable housing supply, regulate real speculation, incentivize innovation, cut red-tape and other barriers, and support the growth of needed skilled workers.

Additionally, collaboration and coordination between all levels of government and stakeholders are essential to ensure a comprehensive and effective response. This also means that the government needs to open to listening those outside the government that have viable ideas and solutions to the sinking housing ship.

Charting a New Course Through the Canadian Housing Crisis

The quote attributed to Albert Einstein “We cannot solve our problems with the same thinking we used when we created them” very much applies to this extremely important situation.

The Canadian housing crisis demands more than just symbolic gestures and incremental changes. It requires a fundamental shift in priorities and a willingness to confront entrenched interests of all the stakeholders. By acknowledging the limitations of current approaches and embracing bold, innovative solutions, Canadian authorities with the involvement of ALL the stakeholders can steer away from the iceberg of housing insecurity and towards a future where everyone has access to safe, affordable housing.

Only then can we ensure that the lessons of the Titanic are not forgotten in the face of crisis.

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