Why wasn't opposition leader Pierre Poilievre, like so many other Canadian leaders, able to see the problem earlier?
Nine months ago, the federal Conservative Party leader Pierre Poilievre released a YouTube video, titled Housing hell: How we got here and how we get out, in which he unpacked his analysis of Canada’s housing crisis and proposed solutions. Noted for it’s original straight-to-public communication style, the video has over half a million views on YouTube.
While original in format, Poilievre’s housing plan focused on the same old arguments Canadians have heard from politicians and housing economists for years — that Canada’s housing crisis is due exclusively to a lack of supply.
He believed one key way to rapidly increase the supply of housing was to require big cities to complete 15% more homes each year to receive federal infrastructure money, as detailed in his “Common Sense Plan”:
In my December 2023 report, I unpacked the many problems with Poilievre’s theories and plans to fix Canada’s housing crisis, highlighting what I think is the the biggest problem — his failure to mention anything about Canada’s booming population growth driven by immigration:
Polievre, like virtually every other politician at that time, instead continued to emphasize the arguments put forward by YIMBY (“Yes in My Back Yard” or pro-density housing) economists who repeatedly argued that Canada’s booming population isn’t the problem but instead the problem is Canada’s failure to build enough homes for our population, due to government restrictions and municipal and provincial “gatekeepers” who are restricting the supply of new home construction.
According to the YIMBY economists, Canada could triple the number of houses completed over the next ten years if every level of government followed their hundreds of policy recommendations and reforms to stimulate the supply of new housing.
In looking at the above chart, which shows in blue the surging population and in red a straight-line of housing supply, we see that the YIMBY economists have allowed politicians to tell a young generation of potential home buyers who have seen their rents surge and home prices climb out of reach that Canada’s housing crisis has very little to do with the surge in the demand driven by a booming population (blue line) and everything to do with housing supply that has remained relatively flat since the 1990s, and continues to be held down by municipal and provincial “gatekeepers” today (red line).
As I’ve been saying on Move Smartly and other publications for years, the ”it’s just the supply” ideas put forward by YIMBY economists were as misguided five years ago as they are today.
Fortunately, we are starting to see politicians abandon the idea that our housing crisis can be solved by focusing solely on supply-side policies while ignoring Canada’s recent population boom.
The Liberals, who under PM Justin Trudeau have been responsible for Canada’s population surge through a spike in immigration, particularly through the issuing of temporary worker and student visas, were the first party to acknowledge that these increased demand for housing is just as important as supply constraints. In their 2024 Federal Budget, their section on housing policies included a discussion around better managing the demand for housing through a more sustainable immigration strategy. The Liberals have imposed cutbacks on the number of student visas being issued and have announced their intention to do the same with temporary workers.
Four months after the federal government’s remarkable shift on housing policy, Polievre now also says that the demand for housing matters and that his housing policies will also include a careful review of establishing sustainable immigration levels.
While it’s encouraging to see that Canada’s politicians are now focusing on this spike in demand for housing as key driver of our housing crisis,, I am alarmed that the analysis and expertise they have access too did not allow them to see this problem before so much damage has been done to the aspirations of all Canadians, newcomers and existing alike as housing costs have spiralled out of control.
An alarming assessment of their miscalculation is that they genuinely believe the misguided ideas put forward by housing academics who focussed exclusively on the supply side of the problem; a more cynical, and perhaps even more alarming, assessment is that they lacked the courage to say what some including myself have long said — that mismanaged demand through surging immigration was a huge problem.
After all, it was merely hurtful to me for others to suggest that my assessment came from an anti-immigrant and xenophobic attitude, but for politicians perhaps the risk seems even greater — in their desire to gain votes, they’ve decided that correctly assessing problems is simply not a winning strategy politically, that is, until the voters themselves demand change long after the damage has already been done.
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
