JACQUELINE KENNELLY AND ANDREW CROSBY

Hate the high cost of rent?

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EWILDERED BY THE high cost of Canada’s most populous province, shift marked the end of 52 years
housing? Wondering how we federal transfers that had covered of federal involvement in social
got to this place in Canada? 17 per cent of provincial revenues housing production and is widely
To understand why we’re here in 1980–86 dropped to only nine per considered to mark the beginning of
now, we need to look back 30 cent of revenues by 1996–2001. the homelessness crisis in Canada.
years to policy decisions being made The significant cuts to federal Before the cuts, the federal
in the early-1990s. funds being transferred to the government supported the
The most intensive cuts to social provinces and territories in the development of affordable housing
spending in Canadian history hap- mid-1990s accelerated the retrench- in a variety of ways, including
pened in the 1990s, including the ment of social assistance benefits investments in public housing,
complete annihilation of Canada’s and became part of the rationale for co-funding affordable rental housing
post-war funding commitments to cuts to higher education, resulting provided by the non-profit and
affordable housing. This came about in rising tuition fees for students co-operative sectors, and private
as Canada mimicked the policies of across the country—a precursor to market builds with rents at afforda-
the United Kingdom, introduced today’s crisis of post-secondary debt ble rates. Investments were made
under Margaret Thatcher, and those for young people trying to get into in public housing beginning from
of the United States, under Ronald the housing market or afford their the late-1940s and peaking in the
Reagan. While this approach to monthly rent. By 1993, the federal 1960s. These were characterized by
policy-making—often called neolib- government completely withdrew cost-sharing arrangements between
eralism—gained a foothold under financial support for building new the federal and provincial govern-
the right-wing Brian Mulroney social or public housing, except for ments. Between 1973 and 1992,
Conservatives in Canada, it was the (inadequate) new builds on First the federal government partnered
centrist-left Jean Chrétien Liberals Nations reserves. This historic with third-sector groups to create
that undertook the most substantial non-market rental housing; ap-
welfare state restructuring, particu- proximately 236,000 non-profit and
larly with the 1995 federal budget co-operative units were created over
under its Finance Minister, Paul those two decades. In addition to
Martin.
Before 1995, provincial and ter- Countries providing reduced-rate mortgages
for 90 per cent of the project costs
ritorial governments received large
transfers of funds from the federal with healthy as well as capital grants for the
remaining 10 per cent, the federal
government, designated to be
spent on specific social portfolios, affordable rental government provided operating
subsidies and funded housing
including housing, health care and
education. Paul Martin introduced stock (e.g., resource groups.
While short-lived, these initia-
a new policy called the Canada
Health and Social Transfer, which Netherlands, tives had a lasting impact on the
Canadian housing landscape and
had fewer conditions attached. This
meant provinces did not need to Austria, and account for some 650,000 units
across the country. This ought
maintain specific social benefits that
had been previously required—and Denmark) have to have marked the beginning,
rather than the end, of government
the transfer also provided signifi-
cantly less funding. public housing investment in public and non-profit
housing, as that sector ultimately
Federal transfers to provinces
and territories fell from $18 billion rates of about made up only four to six per cent of
the Canadian housing market.
annually in the 1980s to $12.5
billion in the mid-1990s. In Ontario, 22–32 per cent. Countries with healthy affordable
rental stock (e.g., Netherlands,
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Austria, and Denmark) have public housing rates of and supportive housing units and ensure those units
about 22–32 per cent. This would have been a good goal are specifically prioritized to people experiencing or
to strive for before cutting all federal funding. Private at greatest risk of homelessness.” Further, non-profit
market, multi-family rental housing construction housing providers, well-positioned to build and manage
boomed in Canada into the early-1970s but declined these new affordable units, struggle to secure funds for
sharply thereafter as the incentive for new rental new builds through the National Housing Strategy, as
construction was removed due to changes in federal well as funds for tenant supports.
policies, and the more lucrative condominium industry In the meantime, global investment companies are
emerged in the late-1960s. financializing the low-income private rental sector
The federal cuts to housing funds in the 1990s and converting it into “luxury” accommodations and
shifted the nexus of housing provision to the provinces condominiums, resulting in a net loss of 322,600
and territories. Ontario took this one step further, affordable units between 2011 and 2016, an average
and devolved housing provision further down to the annual loss that far outstrips the modest 15,000
municipalities. Once a leader in social housing, Ontario affordable units per year planned for the first decade of
was home to 42 per cent of Canada’s social housing the National Housing Strategy. In other words, Canada
stock before the federal cuts. While the Ontario has a long way to go to make affordable rental housing
government continued to invest in social housing until a widespread reality in a country where housing prices
1995, the election of a populist neoliberal Conservative have risen more than 25 times faster than those of the
government under Mike Harris would permanently U.S. since 2005.
alter the social housing landscape in Ontario. With the Although pundits and politicians make an assortment
introduction of the Social Housing Reform Act in 2000, of wild claims about why we have such expensive
all provincial housing stock in Ontario became owned housing in Canada, ranging from inflation to the war
by municipal housing corporations. in Ukraine, the reality is that the stage was set for the
The situation in Ontario has created what housing current affordability crisis 30 years ago. Unfortunately,
policy researcher Steve Pomeroy has called a “unique those most impacted by these policies were not even
but perverse case” in social housing responsibilities born at the time. It is young people (ages 20–29) who
and administration, shifting the expenditure burden are at the receiving end of the housing affordability
and risk to the municipal level. Devolution has imposed crisis, both in Canada and across all OECD countries.
significant constraints and barriers on affordable Compared with the general population, young people
housing throughout Ontario. Housing typically repre- in all OECD countries are much more likely to live in
sents the second- or third-highest expenditure of local rental housing, although increasingly those between
governments. This means that funding allocation for it ages 20–29 are simply staying home with their parents,
often falls victim to efforts to contain budget increases. unable to afford either rent or mortgage. If a parent’s
Ontario remains the only province where social housing home is unsafe or unavailable, they often become
is the responsibility of municipalities. homeless. In Canada, about one in five people experi-
It took 34 years for the federal government to encing homelessness are young, between the ages of 13
seriously re-join the housing game, when the Justin and 24.
Trudeau Liberals introduced the National Housing Although the statistics are not broken out for the
Strategy in 2017. Although some federal re-engagement 25–30 age group, we know that adult homelessness,
had occurred between 2001 and 2017, this resulted in including for young adults, is on the rise in Canada.
only 50,000 more units, and most of these were not Countries with the highest percentage of social housing
considered “deeply affordable,” with rents set between stock are the ones that allow young people to leave
80 and 100 per cent of average market rents and limited home and rent independently, such as in Norway,
rent supplements available. Sweden, Finland, and the Netherlands. It is for this
Although the long-awaited National Housing Strate- reason that the OECD recommends “renewed public
gy promised to reduce homelessness by 50 per cent and and private investment in the affordable and social
make significant investments in affordable housing, so housing stock,” noting it as “a key lever to an inclusive
far it hasn’t made much impact. The Government of economic recovery from the COVID-19 crisis.” M
Canada claims that over 58,900 new affordable housing
units are currently being planned or built, and a further
68,000 existing units are being upgraded or repaired
with the intention of building 150,000 new units of
affordable housing over 10 years.
The Canadian Alliance to End Homelessness points
out that to make a real dent in homelessness, the
National Housing Strategy needs “to build at least
300,000 new deep subsidy, permanently affordable
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