New report highlights housing affordability challenges across Canada

From the Frontier Centre for Public Policy

The year 2022 marked a concerning increase in “severely unaffordable” housing markets, extending beyond the scope of the six major markets.

The Frontier Centre for Public Policy’s Demographia Housing Affordability in Canada report, released today, cast a spotlight on the pressing issue of housing affordability in Canada. This comprehensive report offers a detailed analysis of middle-income housing affordability during the third quarter of 2022, focusing on 46 housing markets referred to as census metropolitan areas.

The report goes beyond the conventional analysis of property prices, delving into the intricate interplay between house prices and income. Price-to-income ratios, a crucial metric for assessing housing affordability, have gained global recognition. Esteemed institutions, including the World Bank, United Nations, OECD, and IMF, have endorsed this measurement. The Frontier Centre for Public Policy’s housing affordability index adopts a similar approach, utilizing the “median multiple” calculation. This calculation involves dividing the median house price by pre-tax median household income.

The report sheds light on the historical context of housing affordability within Canada’s six major markets – Vancouver, Calgary, Edmonton, Toronto, Montreal, and Ottawa – each with populations surpassing one million. The period from 1970 to the mid-2000s witnessed relative stability in the housing affordability landscape. However, by 2005, Vancouver’s market initiated a significant shift towards unaffordability, a trend that has only intensified since the mid-2000s.

The year 2022 marked a concerning increase in “severely unaffordable” housing markets, extending beyond the scope of the six major markets. The number of severely unaffordable markets surged from 18 in 2019 to 24 among the surveyed 46 markets. In contrast, the count of “affordable” markets dwindled from eight in 2019 to a mere three.

The advent of remote work, or “telecommuting” during the pandemic led to a surge in households seeking more spacious living spaces. This surge in demand outpaced supply, resulting in a “demand shock” that further exacerbated the challenges of housing affordability.

The epicentre of unaffordable housing primarily lies in British Columbia and Ontario. Notably, Vancouver and Toronto emerged as the most severely unaffordable major markets, ranking third and 10th least affordable among 94 markets in Demographia’s International Housing Affordability Report 2022. This phenomenon extended beyond Vancouver, impacting other markets in British Columbia. Similarly, the trend reached markets beyond Toronto, prompting a net interprovincial migration as households pursued more affordable housing options.

Amidst these challenges, four markets – Moose Jaw (SK), Fort McMurray (AB), Saguenay (QC), and Fredericton (NB) – have managed to uphold their affordability. The Canadian housing market faces intensified scrutiny, with analyses highlighting the formidable task of addressing the nation’s housing crisis. This includes restoring affordability and enabling home ownership amidst obstacles such as the scale of the issue and the capacity of the home-building sector.

At the heart of the crisis lies urban containment regulation, which has driven land prices to unsustainable levels, constraining housing supply for middle income households. This scenario arises from the deliberate intent of urban containment policies to inflate land prices. Disparities in land costs across markets play a pivotal role in housing affordability disparities. Government policies, like urban containment, unintentionally contribute to government-induced inequality by inflating land prices. Practical alternatives exist to revitalize housing affordability.

Migration to more affordable housing markets has become a priority for many, as evidenced by an unprecedented population shift away from major metropolitan areas towards regions with more affordable housing options. Ensuring affordability remains in these markets is pivotal. Neglecting this could lead to replicating the ongoing affordability crisis in regions that are currently more affordable, which could limit opportunities for future generations and impact Canada’s attractiveness as an international migration destination.

About the Frontier Centre for Public Policy The Frontier Centre for Public Policy is an independent, non-partisan think tank that conducts research and analysis on a wide range of public policy issues. Committed to promoting economic freedom, individual liberty, and responsible governance, the Centre aims to contribute to informed public debates and shape effective policies that benefit Canadians.

Wendell Cox is a Senior Fellow at the Frontier Centre for Public Policy. He is principal of Demographia.com, author of Demographia World Urban Areas and an author of Demographia International Housing Affordability (19 annual editions) and Demographia World Urban Areas. He earned a BA in Government from California State University, Los Angeles and an MBA from Pepperdine University. He served as a visiting professor at the Conservatoire des Arts et Metiers in Paris, a national university.

Related Topics:#FrontierCentreForPublicPolicy #HousingAffordabilityInCanada #WendellCox

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While Canada’s population explodes, the federal workforce grows even faster

Published on December 3, 2024

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From the Fraser Institute

By Ben Eisen and Milagros Palacios

Hiring by the federal government in excess of population growth cost taxpayers $7.5 billion in 2022/23.

The federal workforce has grown more rapidly than the Canadian population starting in 2015/16, imposing significant costs on taxpayers, finds a new study published by the Fraser Institute, an independent, non-partisan Canadian public policy think tank.

Federal government employment has grown significantly faster than the Canadian population starting in 2015/16, and we’re already seeing the consequences,” said Ben Eisen, senior fellow at the Fraser Institute and author of Growing Government Workforce Puts Pressure on Federal Finances, the first in a series of studies on federal reform.

The study finds that between 2015/16 and 2022/23, the latest year of data available, the number of full-time federal workers has increased by 26.1 per cent compared to growth in the overall Canadian population of 9.1 per cent.

“Growth in federal employment has almost tripled the rate of population growth since 2015/16, which is simply unsustainable” commented Eisen.

How much will this growth in government cost Canadian taxpayers?

According to the study, if federal hiring had simply kept pace with the rate of Canada’s population growth taxpayers would have saved $7.5 billion.

The reduced spending on federal employees would lower the federal deficit, which is expected to exceed $35.3 billion in 2022/23.

“The growth in the number of federal employees has been a major contributor to the growth in federal government spending and the size of deficits in recent years,” Eisen said.

The Canadian federal government workforce has grown more rapidly than the Canadian population starting in 2015/16, imposing significant costs on taxpayers.
In fact, between 2015/16 and 2022/23, the latest year of data available, the number of full-time federal government workers has increased by 26.1 per cent, compared to growth in the overall Canadian population of 9.1 per cent.
If federal hiring had simply kept pace with the rate of Canada’s population growth taxpayers would have saved $7.5 billion.
The reduced spending on federal employees would lower the federal deficit, which is expected to exceed $35.3 billion in 2022/23.

Ben Eisen

Senior Fellow, Fraser Institute

Milagros Palacios

Director, Addington Centre for Measurement, Fraser Institute

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From Smug to Subservient, Justin Trudeau Bows to MAGA Realities at Mar-a-Lago

Published on December 3, 2024

Todayville

Dan Knight

After years of mocking Trump and betting on a woke Washington, Trudeau now finds himself groveling to save Canada’s economy from MAGA’s hardball tactics.

Justin Trudeau has spent years mocking and deriding the MAGA movement, banking on a continuation of woke, progressive leadership in Washington. He bet everything on a Kamala Harris presidency, believing the days of Donald Trump’s America-first agenda were a distant memory. Now, with Trump back in office, Trudeau finds himself groveling at Mar-a-Lago, trying to salvage what’s left of Canada’s crumbling economic future.

This is the same Justin Trudeau who painted MAGA as a dangerous fringe movement, aligning himself with global elites and lecturing Americans on their supposed moral failings. He openly scoffed at Trump’s tariffs, his immigration policies, and his tough-on-China stance. Trudeau’s bet? That a Democrat-controlled America would reward his sycophantic pandering with favorable trade deals and continued subsidies for his progressive fantasies.

But Trudeau’s gamble failed. Trump is back, and Trudeau’s entire house of cards is collapsing. Canada’s economy, propped up by unfair trade advantages and U.S. energy consumption, is suddenly exposed. The 25% tariff threat on Canadian imports has Trudeau scrambling, not with bold leadership, but with empty promises and nervous laughter at Mar-a-Lago.

In a moment of pure irony, Trudeau, who once lectured Trump about values, now finds himself kneeling to kiss the ring. MAGA, what? Gone is the smug defiance, replaced by desperate platitudes about border security and economic cooperation. But let’s be clear: Trudeau isn’t there to protect Canadian interests; he’s there to save face. His government is woefully unprepared for Trump’s hardball tactics, and the Prime Minister’s office knows it.

During a recent dinner at Mar-a-Lago, President-elect Donald Trump reportedly suggested that Canada could become the 51st U.S. state if it couldn’t handle the economic impact of proposed tariffs. This remark came after Prime Minister Justin Trudeau expressed concerns that a 25% tariff on Canadian imports would “kill” Canada’s economy.

Trump’s comment underscores the significant economic interdependence between the two nations. In 2022, trade between the U.S. and Canada exceeded $900 billion, with the U.S. accounting for 63.4% of Canada’s global trade. This deep economic integration means that shifts in U.S. trade policy can have profound effects on Canada’s economy.

Trump’s quip about Canada becoming the “51st state” wasn’t just a joke; it was a power move, a reminder of who holds the cards in this relationship. While Trudeau nervously laughed, the message was clear: Canada needs the U.S. far more than the U.S. needs Canada. Trudeau’s weakness has brought us here. Instead of securing energy independence, he’s strangled Alberta’s oil industry with crippling regulations. Instead of standing up to China, he’s kowtowed to Beijing while relying on U.S. trade to keep his agenda afloat.

And now, Trudeau is at the mercy of a man he spent years mocking. Trump’s tariffs are a direct consequence of Trudeau’s inability to lead. His failure to address illegal immigration and the fentanyl crisis has made Canada not just a bad neighbor, but a liability.

Trudeau’s Liberals have always been more concerned with appearances than action, more focused on virtue signaling than real governance. But now, the bill has come due. And the man holding the ledger is none other than Donald J. Trump.

So here we are: Justin Trudeau, the woke globalist, reduced to pleading for mercy at Mar-a-Lago. His smugness replaced by desperation, his rhetoric exposed as hollow. MAGA what, indeed.

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