By: Brock Hickman
There hasn’t been a social, family, or virtual gathering over the past few years in my life, and I would assume the lives of many Canadians, that hasn’t discussed the housing crisis in Canada. It’s a conversation topic affecting all demographics and generations, especially their mental health. The situation creates a rollercoaster of emotions, experiences, anxieties, and mental health issues. Simply put, it is an issue and concern that affects all Canadians. So what exactly is being done about the housing crisis in Canada?
Solving the Housing Crisis in Canada
In the 2022 Federal Budget that was released on April 7th, 2022, Chapter One is titled Making Housing More Affordable. The budget outlines plans for making housing more affordable over the next decade across the country by doubling housing construction. Further actions include helping first-time buyers, curbing foreign investment and unfair practices that drive up the price of housing, protecting buyers and renters, continuing to fight homelessness, and supporting the housing needs of Indigenous peoples.
Key ongoing actions include:
- Being on track by 2027-28 to deliver more than $72 billion in financial support through the National Housing Strategy
- $42 billion in federal support for the construction and repair of rental housing, affordable housing and shelters. More than $15 billion in joint funding with provinces and territories, including the Canada Housing Benefit, will be provided for direct rental assistance.
- More than $11 billion is budgeted towards support for community and social housing, and $2.7 billion in distinction-based support for Indigenous communities.
- Also, an additional $3 billion will be provided for Reaching Home: Canada’s Homelessness Strategy, a commitment to eliminate chronic homelessness by 2030 and creating legislation that would implement Canada’s first national vacant housing tax addressing non-Canadian and non-resident owners.
The budget also reports some of the reasons that housing is so unaffordable in Canada; even admitting this goal that was taken as a given for the previous generation is incredibly unreachable for far too many Canadians. Foreign investors and speculators are buying homes that were intended for Canadians, and rent continues to increase in major cities, forcing people to move further away from where they work. These actions and many others are making houses more expensive, but the biggest issue facing Canada is a housing shortage.
The 2022 Federal Budget can help the Housing Crisis
Millennials everywhere should be breathing a much-needed sigh of relief upon finishing reading the 2022 Budget. This must be such a serious concern for Canadians that the government felt the need to establish this National Housing Strategy for the first time ever. I can honestly say, however, that in recent discussions regarding the housing crisis with fellow Canadians, I have not heard any of these plans mentioned. It will feel good to bring forward this newfound information to fellow millennials whom I know who have consistently confessed their desire to move to another province or country for a more affordable life than Ontario or Canada can provide.
This budget gives Canadians much-needed hope and action to address a future that once looked rather hopeless to generations of citizens who had given up the idea of renting forever. This relief is needed as rising inflation, gas prices, and groceries have made it more challenging than ever to pay the rent, let alone save up for a home — especially if you are living paycheck to paycheck. But the budget doesn’t address any action for rising interest and mortgage rates for current homeowners.
A recent Manulife Bank’s Debt survey posted on June 13th, 2022, revealed that close to 1 in 4 homeowners say if interest rates were to increase further, they would be forced to sell their homes. This survey clearly shows the impact of interest rates, inflation, and rising housing prices on affordable housing in Canada. Many discussions with fellow Canadians revolve around speculation regarding how bad the situation is, but this presents facts directly from Canadians themselves.
It further reveals that over one in five Canadians expect rising interest rates to have a significant and negative impact on their overall mortgage, debt and financial situation. As many as eighteen percent of homeowners believe they can no longer afford the house they own. The housing market is out of reach for most, as two-thirds do not view homeownership as being affordable in their local communities. Nearly half of Canadians said they would struggle to handle unexpected expenses or are reconsidering vacation plans depending on their financial situation.
But the fact that stood out to me the most was that Canadians are more likely to report that debt is causing them stress, with close to half saying it’s negatively impacting their mental health. The survey also revealed that seven out of ten Canadians who do not own a home worry about saving up for one. These are very alarming and troubling statistics. When reached for comment, Amanda Gaine, Manager, External Communication for Manulife, said, “In terms of the survey results, there were a few other findings regarding the negative effects of debt on mental health.
- There has been a significant increase in the proportion of indebted Canadians who indicate that they are struggling with all aspects of the negative effects of debt over the past year.
- More specifically, indebted Canadians are more likely to report that debt is causing them stress (56%), is preventing them from doing things they want to do (57%), is impacting their ability to save for retirement (60%), and is negatively impacting their mental health (48%).
- Consistent with Fall 2021, a higher proportion of Canadians perceive their finances, affordability, and mental health as having worsened instead of improved over the past year.
It seems the 2022 budget addresses housing issues into the future for those Canadians who can’t afford or do not yet own a home. But for those who already own a home, continued rising interest rates are an entirely different issue without a clear solution. Upon reflection, the housing crisis seems to be such a significant issue that addressing one aspect immediately neglects another. I definitely think the actions stated within the 2022 Federal Budget are cause for much-needed optimism and relief for the future. The stress and mental anguish of consistently thinking about the housing crisis or financial troubles is exhausting when it’s even stated in the budget that housing is a basic human need. Maybe now, those who had given up their dreams of ever owning a home can now look into restarting that dream, as over the next few years financial incentives for first-time buyers and more affordable housing opportunities will reveal themselves. Maybe now generations won’t have to feel abandoned by one another, and the dreams of other generations won’t seem so unachievable. It’s not perfect, but it’s a start.
References
Government of Canada, Department of Finance. “Budget 2022: Table of Contents,” April 7, 2022.
https://budget.gc.ca/2022/report-rapport/toc-tdm-en.html.
Corporate. “Buyer’s Remorse? Manulife Bank’s Debt Survey Reveals Close to 1 in 4 Homeowners Say If Interest Rates Were to Increase Further, They Would Be Forced to Sell Their Home.” Accessed June 14, 2022. https://www.manulife.com/en/news/buyers-remorse-manulife-bank-debt-survey-2022.html.
A Place to Call Home. “What Is the National Housing Strategy?” Accessed June 14, 2022. https://www.placetocallhome.ca/what-is-the-strategy.
Canada, Infrastructure. “Infrastructure Canada – About Reaching Home: Canada’s Homelessness Strategy,” March 31, 2022. https://www.infrastructure.gc.ca/homelessness-sans-abri/index-eng.html.
