Canada’s Housing Policy is Market-Based
Only five percent of Canada’s households live in government-owned or non-profit housing. This is the smallest percentage of social housing of any Western country except the United States.
Canada’s housing system, unlike that of most Western nations, relies almost exclusively on the Market for the provision of housing. This is a problem for those too poor to pay rents for appropriate housing. A housing system based on the market cannot respond to social need.
Given the emphasis on markets, the government’s role in Canada’s housing might appear small. But this is not the case. If it were not for federal housing policies and programs, Canada’s house ownership rate would be much lower, and its housing system very different from what it is today.
Canada’s housing policy emphasizes ownership
Following the Second World War, federal and provincial governments created mortgage lending and insurance institutions through government statutes, regulations and subsidies. Municipal governments provided the serviced land and zoning regulations that permitted the construction of relatively cheap housing. Since the early 1970s, a steady stream of house-purchase assistance programs has helped maintain an ownership rate at about 66%.
In 1963, the federal government began a joint provincial program to provide subsidized housing corporations for low-income households. By the mid-1970s, when this program was replaced with a more decentralized, community-based non-profit program, about 200,000 public housing units had been built.
The Canada Mortgage and Housing Corporation (CMHC), established in 1946, focused public funding almost exclusively on owners. Between the mid 1940s and mid 1960’s, most households obtained at least part of their mortgage loan from the federal government. The CMHC focused on helping house buyers and private investors supply rental housing. There was never a policy of assisting owners and renters equally.
Homeowners have, on average, about double the income of renters. It is ironic that the bulk of government support flows to wealthier homeowners rather than to poorer tenants. This, not surprisingly, is rarely reported by politicians or public servants. The federal government did report that it would spend $76 million on its Affordable Housing Initiative in 2008, but made no mention of the approximately $6 billion in annual tax revenue it would not collect from the long ago cancelled capital gains tax. There is no such tax subsidy for Canadians who rent.
The Growing Gap
There is nothing wrong with supporting homeownership, but in recent decades the gap in wealth between owners and tenants has grown. In the late 1960s, the income gap between owners and renters was about 20%. By 1999, the gap had increased to 208%. Almost 20% of renters live in housing that needs major repairs, or is overcrowded, compared with 10% of owners.
Canada’s housing system is seriously out of balance: it is discriminatory in the way it treats owners and renters, and its reliance on market supply-and-demand works for owners, but not for renters. Some sectors of the population are excluded from access to housing.
Homeowners have, on average, about double the income of renters. It is ironic that the bulk of government support flows to wealthier homeowners rather than to poorer tenants. This, not surprisingly, is rarely reported by politicians or public servants. The federal government did report that it would spend $76 million on its Affordable Housing Initiative in 2008, but made no
mention of the approximately $6 billion in annual tax revenue it would not collect from the long ago cancelled capital gains tax. There is no such tax subsidy for Canadians who rent.
All levels of government are continually making decisions that affect housing. Yet disputes over jurisdiction continue. In the March 1996 federal budget, the government announced that it would transfer administration of federal social-housing programs to provinces and territories, ending 5 years of direct federal involvement’ This was a unilateral policy decision, not the settlement of a legal or constitutional dispute. It was also a financial decision-a means of saving money at the federal level.
Most provincial and territorial governments also withdrew help from those most in need. Provincial and territorial budget cutting housing, social spending, and urban affairs were the result of the federal government’s downloading the deficit onto Provincial taxpayers. Dismantling the federal social housing supply program also meant that provinces and municipalities had to bear the indirect costs of inadequate housing and homelessness. These included the costs of physical and mental health care, emergency shelters and services, and policing.
Although there is a constitutional barrier to direct federal assistance to municipalities for housing, when federal money is made available, provincial governments have difficulty denying Municipalities access to that money. After 1973, the federal government directly funded new social-housing projects built by non-profit societies as well as non-profit housing corporations established by municipalities. However, jurisdiction may suddenly become an issue if the federal government does not want to engage in a housing program.
After much talk and many promises the 2004 and 2005 federal budgets allocated some new funds for housing and municipal infrastructure. As in the past, the federal government launched housing initiatives in the face of strong political pressure from civil society, and it continues to do so. T here is no evidence that governments have ever intended to move towards making the housing system more just and inclusive.
Abridged and edited for i JUSTnews from J. David Hulchanski, September 2007, Research Bull. No. 38, Centre for Urban and Community Studies. The chapter of the book on which this article is based is available at www.hulchanski.ca. J. David Hulchanski is the associate director of the Cities Centre and professor of housing and community development at the Faculty of Social Work, University of Toronto. In the 1980s, he was a professor in the School of Community and Regional Planning at the (University of British Columbia and Director of the UBC Centre for Human Settlements.
J. David Hulchanski, Autumn2 010 J USTnews 1
From the Editor
Homelessness is a symptom of a larger problem: the world is on a disastrous course, and if we want to avoid the worst that could befall us, we’d better start doing something about it-and soon- Mel and Christine Johnston took a trip to India this past September, and their reflections on the current world situation are provided on p. 9 (critical world priorities). They offer no solutions, but those of us who have been thinking about this for a while – perhaps most CUSJ members – know that one of our first steps must be to build a network, a community. We cannot turn the world onto a less disastrous course alone, but w e can do it together, which is to say, all is not doom and gloom. JUSTnews, as in the past, continues to offer possible solutions to problems. And in addition to more news and views than usual from CUSJ members in this issue, you might get a chuckle from cabinet secretary Sir Humphrey Appleby’s brush with a feminist who is upset with how the police treat the poor in her borough. Enjoy!