When most people think about housing policy in Canada, they think of it through an economic lens – supply and demand.
But housing policies are political, the same way health policies are political. Canadians and Americans want affordable healthcare, but their approaches to achieving that goal are fundamentally different.
Canada’s state-funded universal healthcare system takes a very different approach to providing healthcare than the US, where healthcare operates as a privatized for-profit business.
What if Canadian healthcare economists argued that the solution to Canada’s healthcare challenges, including a significant shortage of doctors, is to move towards a privatized system where healthcare is no longer seen as a social right for all Canadians but as a for-profit business for private enterprise, a lot like the United States. According to their theories, removing government restrictions on healthcare would unleash a tremendous amount of new capital into the healthcare system, encouraging private corporations to build more hospitals and healthcare facilities, and this rapid increase in the supply of new healthcare facilities will eventually lead to better healthcare and lower fees for all Canadians.
If we heard experts making these arguments, it would be very clear that their views are driven by a conservative political ideology.
Similarly, housing policy is driven by conservative pundits who believe that if governments remove all restrictions on the supply and demand for housing, the free market will solve our housing problems. They are against restrictions on the supply of housing but they are also against any restrictions on the demand for homes as well. They are against restrictions on short-term rentals, corporations buying homes, foreign buyer taxes and vacant home taxes, to name a few.
They believe that if you make housing a more lucrative financial investment for builders and investors buying homes, the private sector will have an incentive to unleash so much supply that it will eventually lead to lower housing costs.
They are trying to apply the US approach to healthcare to housing in Canada by making homes a for-profit business. This conservative advocacy has changed the role that houses play in Canada’s society. As Statistics Canada noted:
“Real estate and homes are no longer just a place to live—instead, Canadians are in the business of real estate”
It took me a while to fully understand why I disagree with so many of Canada’s housing commentators when in theory, we are striving for the same goal – affordable housing.
Our differing views are rooted in our different political ideologies, which shape how we view the problem, our proposed solutions, and the end goal we are striving for.
While they think a US free market approach is the solution to our housing crisis, I believe their vision is taking us further down the road we are on - a world where fewer families can afford and more investors are buying homes.
I think moving back to a world where homes were just a place to live rather than a lucrative financial investment is the only way to ensure housing is affordable for the next generation.
John Pasalis is President of Realosophy Realty. A specialist in real estate data analysis, John’s research focuses on unlocking micro trends in the Greater Toronto Area real estate market. His research has been utilized by the Bank of Canada, the Canadian Mortgage and Housing Corporation (CMHC) and the International Monetary Fund (IMF).
Have questions about your own moves in the Toronto area as a buyer, seller, investor or renter? Book a no-obligation consult with John and his team at a Realosophy here: https://www.movesmartly.com/meetjohn
March 11, 2025
Policy |