Ads Google

Three Ways The Federal Government Can Help Boost Housing Supply

by Richard Lyall on 03 Mar 2023

Building 1.5 million new homes in a 10-year period is a daunting task but achievable. To reach the target, all levels of government and residential construction industry stakeholders must be working in unison.

Over the past two years, the provincial government has introduced many significant pro-housing legislative measures – the most progressive in a generation, in fact – aimed at boosting the supply.

Municipalities must now follow the blueprint that has been laid down by the province – and the federal government must now step up to the plate to ensure housing supply and affordability issues are addressed. RESCON is suggesting three crucial actions that the federal government should take.

First, the feds must reform the immigration system to allow more construction workers with specialized skill sets required to build condos and homes to come to Canada.

It goes without saying that to build the houses of the future we need a labour force. In the GTA alone, nearly a quarter of construction workers, or 42,840, are set to retire by 2030, according to BuildForce Canada. Domestic training and hiring alone will not be enough to offset these numbers.

The problem is that the immigration system has disproportionately favoured applicants with formal education, certification, language skills, and financial resources. Many voluntary trades that are required in the residential construction sector do not have these types of credentials. Instead, they have specialized skill sets that are required to build houses, condos, and apartments.

The feds must revamp the rules so that immigrants with these skill sets can qualify for express entry to Canada. The government must also relax language requirements and give priority to those with experience in construction.

We support the extension and expansion of a Canadian Labour Congress pilot program to provide permanent resident status to 1,000 construction workers in the GTA and maintain it should be continued. We also believe the feds should expand their recruitment efforts at Canadian embassies and consulates around the world to encourage skilled trades workers to come to Canada.

Second, the government must unlock surplus federally owned land for affordable housing projects and create incentive-based programs to spur supply in both the profit and non-profit sectors.

Programs should be established that eliminate the collection of taxes on profits from residential construction projects if the funds are re-invested into building other similar projects. Programs like this, namely the Multiple Unit Residential Benefit and Limited Dividends initiatives, were successful in the 60s and 70s.

RESCON is also suggesting that the feds exempt or rebate collection of the HST on residential buildings and purpose-built rental projects and increase transfer payments to municipalities from federal taxes collected from the construction sector to facilitate reduced infrastructure cost pressures on cities. If we are to provide enough housing, more supporting infrastructure must be built.

Third, the feds should remove the mortgage stress test which requires borrowers to prove they can meet monthly mortgage payments either based on the highest rate being two points higher than the current rate, or 5.25 per cent. The stress test served its purpose and prevented home buyers from over-leveraging themselves during periods with low borrowing rates. However, it is now preventing Canadians who qualify at the current rate from securing a mortgage.

Ontario is one of the most livable areas in the world. People from across the globe are seeking to immigrate here. The need for housing, however, is dire as more than 400,000 newcomers are expected to arrive in Canada in 2023 and 2024, many of whom will choose to live in Ontario and the GTA.

The need for housing will be even more acute. However, the lack of supply is making it unaffordable for many people to rent or own. As a result, there is a brain drain of talent from the GTA as people seek affordable housing elsewhere.

Canada presently has the lowest amount of housing per capita and the highest cost of housing amongst G7 countries. These are not good metrics.

The measures we are suggesting could be put in place immediately by the federal government and – while not a silver bullet to the housing crisis – would certainly be a progressive step forward.

Richard Lyall is president of the Residential Construction Council of Ontario (RESCON). He has represented the building industry in Ontario since 1991. Contact him at [email protected].

Post a Comment

Most Trending News