A new report by Desjardins outlines the challenges that Ottawa faces in trying to increase housing supply in Canada. The report, authored by economists Marc Desormeaux, Kari Norman, and Randall Bartlett, points to regulatory hurdles and constraints on labour, materials, and financing as major obstacles to meeting the government’s ambitious targets. The federal government’s Canada Housing Plan aims to unlock 3.87 million new homes by 2031, but the report suggests that 1.87 million of those homes were already expected to be built regardless of the new measures. This means that despite the government’s efforts, the pace of new housing starts may fall short of what is needed to restore affordability by 2030.
The primary constraint identified in the report is the ongoing labour shortage in the construction industry. The Canadian Home Builders’ Association estimates that more than one million additional residential construction workers are needed to meet the targets set by the Canada Mortgage and Housing Corp. The report also highlights other challenges, such as regulations requiring builders to use more expensive climate-resistant materials due to extreme weather, as well as increased costs associated with elevated interest rates and inflation. Despite these obstacles, the authors argue that it is still important to continue efforts to increase housing supply, even if the targets may not be fully met.
The report warns that building 5.8 million new homes in the next eight years is a lofty goal that may be difficult to achieve given the current constraints facing the construction industry in Canada. The authors point out that it took three decades to build the last 5.8 million homes in the country, and that significant efforts will be needed to overcome the challenges that stand in the way of meeting the government’s targets. They emphasize the need for a greater focus on attracting skilled tradespeople and dedicating more domestic resources to residential investment in order to increase housing supply.
Despite the challenges outlined in the report, the authors suggest that it is still possible to lessen the housing supply crisis by building as many homes as possible, even if the lofty affordability goals set by the CMHC may not be fully achieved. They argue that even if Canada falls short of meeting the targets set for 2030, efforts to increase housing supply can still have a positive impact on addressing the affordability crisis. The report stresses the importance of continuing to address the regulatory hurdles, labour shortages, and other constraints that are currently impeding the construction of new homes in Canada.
In conclusion, the report highlights the significant challenges that Ottawa faces in trying to increase housing supply in Canada. The authors point to regulatory hurdles, labour shortages, and constraints on materials and financing as major obstacles to meeting the government’s targets. While the goals set by the Canada Housing Plan are ambitious, the report suggests that it may be difficult to achieve them given the current constraints facing the construction industry. Despite these challenges, the authors emphasize the importance of continuing efforts to increase housing supply in order to address the affordability crisis and alleviate the housing supply shortage in Canada.
