From the Fraser Institute

By Jake Fuss and Austin Thompson

Economist Mike Moffatt estimated that, if Canadian wages grow at the average rate seen over the past two decades—and if home prices remain stable—it would still take 20 years for Canada to achieve housing affordability levels of 2005… In other words, reality remains at odds with the Carney government’s ambitious rhetoric about delivering so-called “affordable homes.”

In a recent media scrum, the Carney government’s new federal housing minister Gregor Robertson—former mayor of Vancouver—was asked: “Should home prices go down?” His response: “No, I think that we need to deliver more supply, make sure the market is stable. We need to be delivering more affordable housing.”

Robertson’s response raises a follow-up question: what does the Carney government mean when it promises “affordable housing”?

Rising house prices are nothing new. The sticker price for the average Canadian home has increased in most years, barring periods such as the 2008–09 Global Financial Crisis. And house prices aren’t expected to fall anytime soon; forecasts point to continued house price growth. But for homebuyers, the key issue isn’t that prices are increasing; it’s whether they’re rising faster than incomes. By that measure, housing in Canada has become much less affordable in recent years.

Consider Minister Robertson’s tenure as Vancouver mayor from 2008 to 2018. During that time, the price of a typical single- or semi-detached Vancouver home grew from $690,000 to $1,980,000—a 187 per cent increase. Meanwhile, the after-tax income of a typical Vancouver family rose by just 15 per cent. Today, the typical single- or semi-detached home in Vancouver costs $2,380,000. Vancouver’s housing market is somewhat unique, but strong price increases reflect a broader national trend: home prices have risen dramatically even as income growth has stagnated, largely because housing demand—driven by immigration-fuelled population growth—continues to far exceed new housing construction.

Which takes us back to the question of “affordability.” Housing can become more “affordable” even as home prices rise, so long as the after-tax incomes of Canadians grow even faster. This has happened before—after-tax wage growth exceeded house price increases in the late 1980s, for example. Unfortunately, this seems unlikely to happen in the 2020s.

In fact, while house prices have soared, wage growth in Canada has stagnated. Consequently, in 2022 (the latest year of available comparable data), the typical worker in Alberta—Canada’s highest-wage province—earned less than the typical worker in low-wage U.S. states such as Mississippi and West Virginia. And from 2014 to 2024, Canada’s GDP per-person, an indicator of incomes and living standards, grew by a mere 2.0 per cent compared to 19.6 per cent in the United States.

In a recent analysis, economist Mike Moffatt estimated that, if Canadian wages grow at the average rate seen over the past two decades—and if home prices remain stable—it would still take 20 years for Canada to achieve housing affordability levels of 2005. And of course, much could go wrong—if wage-growth estimates fall short, mortgage rates rise or house prices rise, then that slow march towards housing affordability may never end for many Canadians including young people looking to start a family.

In other words, reality remains at odds with the Carney government’s ambitious rhetoric about delivering so-called “affordable homes.”

Again, the government wants to double the rate of homebuilding in Canada in a decade. Is that possible? Currently, Canada lacks the required savings and investment to fund that level of building. And due to tepid growth of our construction workforce, we currently do not have the manpower to build twice as many homes. And as always, local opposition to rapid housing development in certain neighbourhoods and public lands may also prove hard to overcome.

But even if somehow Canada was able to marshal the resources and political capital required for such a feat, according to Minister Robertson, the end result would only be to “make sure the market is stable.” Stable, based on today’s prices, means unaffordable for many Canadians unless incomes rise. Clearly, housing supply is only half the battle. To achieve housing affordability on any reasonable timeline, the government must not only help facilitate a major expansion in homebuilding but also substantial growth in Canadian incomes—something the Trudeau government failed to do.

The key is investment, which is required to expand the housing supply, grow Canada’s economy and boost wages. In a capital-scarce economy such as Canada’s, these goals may compete with one another. So governments in Canada, including the Carney government, must adopt policies that attract investment, such as streamlining regulation and reforming capital gains taxes. And crucially, rising incomes will only translate into improved affordability if Canadians can keep more of what they earn, which will difficult given that anticipated increases in federal spending will ultimately result in a higher tax burden. Ottawa must also craft immigration and residency policies so population growth doesn’t continue to overwhelm housing supply and further increase prices.

Canadians should think about housing affordability not just in terms of housing supply but as part of a broader economic challenge—one that also depends on growing the economy, increasing savings and investment, and limiting how much governments take in taxes. Only a comprehensive strategy, centered on broad-based growth, will make the dream of homeownership a reality for generations of Canadians.

Jake Fuss

Director, Fiscal Studies, Fraser Institute

Austin Thompson

Senior Policy Analyst, Fraser Institute

From the National Citizens Coalition

Canadians Demand Action, Not More Empty Promises

The National Citizens Coalition (NCC) today calls out the Liberal government for their belated return to the House of Commons in 2025, after months of dodging accountability while Canadians grapple with skyrocketing costs, unaffordable housing, crime and chaos, and the fallout of a decade of failed Liberal policies.

While the Liberals dust off their seats, millions of Canadians have been struggling to pay for groceries, keep a roof over their heads, or envision a future where hard work still pays off. The NCC demands the government stop hiding behind empty rhetoric and deliver meaningful, common-sense actions to address the crises they’ve exacerbated.

“After years of empty gestures, empty rhetoric, and empty promises, showing up to Parliament in 2025 isn’t an achievement – it’s the bare minimum. Canadians are drowning in high taxes, inflation, and a housing crisis, and they deserve real solutions, not more speeches,” says NCC Director Alexander Brown.

The NCC calls on the Liberal government to immediately prioritize:

Immediate tax relief to put money back in the pockets of hardworking Canadians, including axing the HIDDEN CARBON TAX on our Great Canadian businesses.

Concrete steps to slash immigration back to responsible, sustainable norms; including a crackdown on fraudulent ‘diploma mills,’ and the abolishment of the ‘Temporary Foreign Worker’ program, to protect Canadian jobs, and the jobs of our youth.

Meaningful, immediate efforts to increase housing supply, by slashing red tape and bureaucratic roadblocks that drive up development costs.

An end to wasteful spending on pet projects and corporate handouts that do nothing for struggling families.

Steps toward meaningful criminal justice reform; including an end to Liberal catch-and-release bail for repeat violent offenders.

A plan to restore economic opportunity, so young Canadians can afford homes and build a future without fleeing the country.

And it’s time to Kill Bill C-69 — and Build Pipelines.

Working Canadians have heard enough platitudes – it’s time for results. The government must act decisively to fix the mess they’ve created or step aside for those who will. With just a few short weeks before the Liberals abscond for another vacation, IMMEDIATE ACTION is required to match the urgency of the moment, and to atone for the insult of the Liberals’ cynical, dishonest, “elbows up” campaign that left millions of young, working-age Canadians without hope for the future.

About the National Citizens Coalition:

Founded in 1967, the National Citizens Coalition is a non-profit organization dedicated to advocating for lower taxes, less government waste, and greater individual freedom. We stand for common-sense policies that once again put Canadians first.