Canada's pressing issue of affordable housing shortage could witness alleviation as inflation recedes and interest rates attain a more predictable trajectory, asserted the recently appointed Housing Minister Sean Fraser on Tuesday.
Sean Fraser's selection last month, as part of Prime Minister Justin Trudeau's extensive reshuffling, reflects a renewed focus on addressing cost-of-living concerns. With an impending election by October 2025 and trailing poll numbers, the governing Liberals are grappling with accusations from the opposition Conservatives of economic mismanagement leading to unaffordable housing.
A challenge that the opposition has seized upon, housing, came into focus as Conservative leader Pierre Poilievre underscored the doubling of rents and mortgage payments since the Liberals assumed power in 2015.
Immigration policies have also garnered criticism for exacerbating Canada's housing crunch, as an ambitious plan aims to attract over 400,000 people annually without a corresponding strategy for accommodation.
While housing primarily falls under the jurisdiction of provincial and municipal governments, Ottawa has directed efforts towards catalysing a sluggish construction rate.
In an ambitious 2022 announcement, the federal government proposed doubling construction efforts over the next decade, yet housing starts are expected to dip to 212,000 units in 2023 from the preceding year's 262,000.
Sean Fraser attributes pandemic-induced supply chain disruptions to escalating building costs. The Bank of Canada's record rate increase in July and inflation at 2.8% in June 2023 (compared to a peak of 8.1% in June 2022) further compounded the challenges.
The reduced inflation rate and potential stability in interest rates are poised to infuse greater confidence in the construction industry, Fraser communicated during a phone interview with Reuters. He believes that the current stable environment presents a pivotal opportunity to effect substantial change.
Remaining steadfast on policy continuity, Fraser, formerly the immigration minister, advocates for addressing the housing crisis by building more homes rather than restricting newcomers.
