Canada’s Housing System Won’t Be Fixed While Trudeau And Poilievre Play The Blame Game
It’s time to expect serious discussion about causes and solutions
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The Canadian political landscape has undergone some significant shifts over the past decade. Among the most stark is changing voting intentions for younger people, as detailed in the article “Pierre Poilievre's secret weapon in his quest to be prime minister? Millennial voters” from earlier this year.
Support for the Liberals among millennials has dwindled from 45 per cent in 2015 to just 20 per cent today...Meanwhile, millennial support for Conservatives has skyrocketed to 41 per cent, higher than in 2011 when the party was last elected to government.
Gen Squeeze Founder Paul Kershaw was quoted in the article, explaining that “hard work doesn’t pay off for millennials like it did for previous generations” and that the Conservative leader is “tapping into young people’s grief” about affordability. Millennials are facing growing pressure from the rising cost of living. Having lost confidence that the current administration can fix the problem, they are looking for change from Poilievre.
It’s hard to blame young people for their skepticism about the Trudeau Liberals. They’ve been in power for nearly a decade, and in that time, things have continued to decline on the housing front. While Trudeau’s team didn’t start Canada down the path to housing unaffordability – a trend with roots that stretch back decades – it’s fair to say that they’ve joined the ranks of successive Liberal and Conservative governments which have failed to take bold action to reverse it.
As Millennial Moron detailed in a recent video, Trudeau had an opportunity to address Canada’s housing situation a couple of weeks ago when he was asked the following question (link here - starts around 31:00):
“In 2015 when you became Prime Minister, the average house [in Hamilton, Ontario] was about $334k; 2024 and it’s $850k, beyond the reach of many people. What happened? How did governments let this happen?”
His response:
Decisions taken by governments of all stripes over decades have led to this moment. Particularly, the previous government in which Pierre Poilievre was actually housing minister, that explicitly said the Federal Government should have absolutely nothing to do with building affordable housing or creating affordable housing. It’s not rocket science to see that decisions, particularly on something like a housing market, that are taken years ago have impacts for years, for decades, for generations to come. So the question we have to ask is…Who is gonna fix that system? Who has a plan to actually fix that system?”
This hits the nail on the head. Gen Squeeze has been saying for years that decades of broken policies are what created this mess. It seems that the Prime Minister is beginning to see this as well, and we welcome his recognition of the need for systems-level fixes.
Alas, instead of finding common cause with political leaders with whom he shares the housing struggle, Trudeau gets into the blame game that he and Poilievre too often play. The PM attempts to implicate his rival by pointing out that Poilievre and the previous Conservative government didn’t support federally funded affordable housing. While true, this criticism is also misleading, since federally assisted affordable housing construction cratered when Poilievre was still in high school.
The Conservative leader regularly takes similar shots at Trudeau. As we described last year, Poilievre’s viral “Housing Hell” video starts off claiming that “something new and strange is happening in Canada” – referring to the housing crisis. Most of the rest is spent explaining how Trudeau caused this ‘new’ problem with big deficits and red tape. Since the data are clear that home prices began rising long before Trudeau’s election in 2015, Poilievre’s claims are equally misleading.
The fact of the matter is that both the Liberal and Conservative parties have had many opportunities to do something about the housing crisis, but didn’t. This inaction was likely motivated by the fact that many regular (voting) Canadians were content to let prices continue to rise in order to reap the tax-sheltered wealth this created from their own homes, and/or to deploy this wealth into the purchase of additional investment properties. Politicians thinking in short-term electoral cycles have been loath to disrupt this particular gravy train.
Unfortunately, there isn’t currently a clear answer to Trudeau’s all-important question: “Who is gonna fix the [broken housing] system?”
We recently detailed why the current Liberal housing plan will likely prove inadequate to restore widespread affordability. The Conservative party plan is no better, suggesting that a singular focus on building more homes will solve all of our problems. As National Observer columnist Max Fawcett wrote, “Earth to millennials: Pierre Poilievre is playing you on housing.” Max issues the following warning to the young voters flocking towards Poilievre:
“Housing-hungry millennials might want to look a little more closely at what he’s actually saying about the issue, though. Yes, Poilievre has been very good at feeling their pain and harnessing it to his own political ambitions. But if anyone’s expecting him to heal it as prime minister, his recent behaviour suggests they’re setting themselves up for some pretty major disappointment.”
With neither of our main political parties putting forward a serious plan to restore housing affordability, prospects for younger Canadians (or renters of any age) are dim. To change that, we need your help.
We’ve all witnessed this year what persistent, focused advocacy can do. Generational fairness was affirmed by the BC NDP government, and we got our tagline on the front page of the federal budget. Both have contributed to sparking more national dialogue around generational fairness — so imagine what we could do with even more help from our donors and supporters.
To start, please share this newsletter far and wide. The more awareness there is around the root causes of the problems we’re facing, the more likely they are to be solved.
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We’re currently working to develop a broader set of ways supporters can help us. For now, we’d like to know, how would you be willing to energize the Gen Squeeze movement? Are you willing to reach out to your elected representatives? Become a Gen Squeeze ambassador, spreading the word? Donate to our cause? Let us know in the comments, and don’t forget to take our quick survey about this Substack and our other channels.
Check out our latest episode of Hard Truths!
Younger Canadians are far from alone in feeling squeezed by the rising costs of housing, child care, and higher education. In this episode, we spoke with Liz Emerson, CEO of the UK's Intergenerational Foundation, about the symptoms of generational unfairness harming young people in England, as well as the progress her organization has made in drawing political attention to their plight and fighting for a fairer deal for young and future generations.
That’s all for this time, thanks for reading!
I think some of the finger-pointing obscures that people just... don't all care about the same things. Yes, it was a failure for any number of governments to ignore non-market housing for so long, and this would have led to a ton of accumulated costs and social problems and lost opportunities even if market home prices had stayed normal. But it is also not really honest to blame the explosive rise of costs for market housing on the failure to build 'affordable' housing in the traditional sense. (It probably has some moderating effect on market rate housing at high enough levels, but I also don't see evidence it's an absolute precondition.)
There's a political question about what people want from the housing system that goes beyond technocratic questions about how to get there. Prices are part of that, but so is what we should consider 'good' housing. I am not personally excited about a world where we are talking about non-market housing for people making 180k (like some BCBuilds projects) as an aspiration rather than a deep failure, or one where it's being sold as 'fairness' that the new middle class norm is rental apartments, not just as a stopgap but with no indication that it is not the end goal. I don't see any real economic or policy seriousness from any party, but I also don't think anyone is being 'played' because they like hand-waving about how to achieve the thing they actually want over somewhat more-developed policy that is frankly leading pretty strongly in the direction of just lowering expectations forever.
Fundamentally the slow iterative approach that the LPC has taken to the recent immigration explosion is probably what's killing them. I think they went this path because
a) it's impossible to remedy the immigration situation without inducing a recession; they are covering up per capita declines in income with human QE.
b)Also, without that QE market prices would drop with a bubble burst, "screwing" over existing owners. No politician will want to piss of 60% of the electorate so the LPC is stuck.
That of course is only about a short term blip in prices; given the number of people here + latent demand from them, we can probably expect prices to not decline too much in the long run. In the long run there is honestly no way for prices to drop by 30-50% relative to wages in less than 2-3 decades if immigration is maintained at current levels.
The housing completes to new-population ratio needs to improves significantly until housing construction vastly outpaces population growth for a decade or so. That in turn requires a tripling of our construction industry and all supplier industries like gravel, timber, cement, steel, equipment, etc.
Not unless we want 100B+ in affordable housing spend by government.