Canada is in the grip of a housing crisis, and the federal government, along with the Canada Mortgage and Housing Corporation (CMHC), is under scrutiny for its part in the debacle. With soaring home prices and dwindling affordability, many Canadians are finding themselves locked out of the housing market. Now, it has been learned that many of the public servants responsible for the very policies that have exacerbated Canada’s housing crisis have been paying themselves big taxpayer-funded bonuses.
The numbers speak volumes.
According to the Canadian Real Estate Association, the average home price in Canada skyrocketed by nearly 20 percent in 2023. As a result, owning a home is an increasingly distant dream for countless Canadians, particularly in major urban centres like Toronto, Calgary, Edmonton, Winnipeg, Regina, Ottawa, Halifax, and Vancouver.
Polling from Ipsos and Global News in 2023 shows that 63 percent of Canadians who don’t own a home have “given up” on ever owning one. Nearly 70 percent of respondents said home ownership in Canada is “only for the rich.”
In April 2024, the Royal Bank of Canada said it was the “toughest time ever to afford a home as soaring interest costs keep raising the bar.”
The RBC said ownership costs were propelled to a “new summit” in the fourth quarter of 2023, with a “household earning a median income (needing) to spend a staggering 62.5 percent of it to cover the costs of owning an average home at market price.”
“Affordability worsened in all markets we track,” the RBC said, with housing in Vancouver, Victoria, and Toronto experiencing “the biggest deterioration” and affordability in Ottawa, Montreal, and Halifax being “at or near all-time worst levels.”
Trudeau government policies and those of the CMHC have played an influential role in creating the housing crisis. The implementation of stricter mortgage qualification rules, including stress testing, was claimed to be aimed at curbing household debt and stabilizing the housing market. Instead, these measures have made it much tougher for first-time buyers to secure mortgages, especially in high-priced markets.
Tens of thousands of potential younger buyers have been refused mortgages based on the so-called stress test. Ironically, these same younger consumers are now forced to pay an average of between $1,800 to $2,700 monthly to rent apartments and homes — often from large corporations that have paid lobbyists in Ottawa influencing federal housing and mortgage policies.
Many experts in the field have weighed in on the federal government’s role in the housing crisis. Economist Sandra Johnson has been critical of the federal response to housing, saying, “While some measures were well-intentioned, they’ve had unintended consequences, making homeownership increasingly out of reach for many Canadians.”
Despite the national housing crisis, CMHC’s interventions in the market remain contradictory and confusing. Their so-called mortgage insurance and securitization programs, meant to facilitate access to housing, have the reverse effect, and in many cases, they have fueled demand and inflated prices, particularly in urban areas.
Multiple housing experts across Canada have called on the Trudeau government to take bold steps to address the housing crisis effectively, including investing in affordable housing construction to increase supply and alleviate market pressure. There have been calls to reevaluate mortgage rules to balance prudence with accessibility for creditworthy borrowers. Housing advocates from across the country have called for the government to expand support for low-income households and more robust investments in social housing initiatives.
There have been calls by MPs to reduce red tape and regulation in the housing construction sector and for municipalities to reduce the bureaucratic process that causes such a backlog in the approval process for building homes in cities in Canada. Others have called for more innovation in homebuilding with the use of alternative housing models to diversify options and enhance affordability.
The Trudeau government’s response to Canada’s troubling housing crisis continues to be a cross between being tone-deaf and incompetent. The continuing confusion and chaos in attempts to resolve the crisis stems from the top. Ironically, Prime Minister Trudeau named Housing Minister Sean Fraser to the role after his disastrous stint as Immigration Minister, where he implemented and oversaw the very policies that fueled much of the housing crisis in the first place.
As Immigration Minister, Fraser ignored warnings from his own bureaucrats in 2021 and 2022, where they cautioned against Canada accepting more immigrants because it would only exacerbate and contribute to the national housing shortage. A huge portion of this immigration intake was from non-permanent resident programs, such as international students and temporary workers, which were not subject to caps and were primarily driven by demand from educational institutions and employers.
Despite the warnings, Fraser and the Trudeau government ploughed full steam ahead with a policy that admitted 455,000 new permanent residents and more than 800,000 non-permanent residents last year alone. That is close to 1.3 million people coming to Canada in one year without Canada having the proper infrastructure in place to support them when they arrive. To the surprise of no one except the Trudeau government, the result was a myriad of social, economic, integration, crime, and housing problems.
In January, at an Economic Club of Canada event in Toronto, many of Canada’s Top bank economists called for changes to Canada’s immigration policy, saying that “Canada’s current immigration policy — among the most open in the world — is now causing economic damage and needs to be reconsidered.” Beata Caranci, chief economist at Toronto-Dominion Bank, told attendees that, “Unlike many other countries, including the United States, Canada is not dealing with poorly controlled flows of migrants across its land borders and has had time to think about the implications of its policies. We designed our own policy, we put it in place, we implemented it, and we still screwed it up.”
On January 22, Immigration Minister Mark Miller imposed an immediate cap on the number of international study visas to Canada over the next two years. Approximately 360,000 undergraduate study permits will be approved for 2024—a 35-percent reduction from 2023, with a 50-percent drop in Ontario alone.
As the housing Minister, Fraser’s efforts to ramp up housing supply through various policies have been just as unimpressive as his stint as immigration minister . . . . and have had a minimal impact. Compounding the challenge, high interest rates driven by the Liberal-NDP carbon tax, and a slowing economy have further negated the government’s housing sector supply-boosting endeavours.
The most recent Statistics Canada data paints a bleak picture for the housing market. The total value of building permits in Canada plummeted by 14 percent in December 2023, reaching its lowest level in over three years. The residential sector withstood the worst of this decline, with a 17.9 percent drop in multi-unit permit construction intentions.
According to CIBC economist Benjamin Tal, the Trudeau government’s plan to add 3.5 million extra units by 2030 to combat affordability is off the mark by approximately 1.5 million homes. Tal points to population figures that fail to account for non-permanent residents as a critical factor contributing to this shortfall.
However, Tal notes that even with this cap in place, growth in other categories of non-permanent residents would still result in approximately 6 million new people over the next seven years, demanding a commensurate increase in housing construction.
Tal emphasizes the critical need for credible forecasts, targets, and integrated planning across all levels of government to address the planning shortfall. He argues that without meaningful forecasting for both permanent and temporary visa approvals, efforts to tackle the housing crisis will remain inadequate.
One of the key agencies responsible for housing policy and data in Canada is the CMHC. Despite the worst national housing crisis in Canada’s history, which in part was created by the federal government and policies put forward by the CMHC, the management and leadership of the CMHC have had no issue rewarding themselves with big-time taxpayer-funded bonuses for their poor performance as hundreds of thousands of Canadian struggle with basic housing needs.
CMHC’ public servants’ whose policies have forced hundreds of thousands of Canadians to stay in the rental marketing and pay outrageous monthly rental fees in part due to their policies, handed themselves $27 million in bonuses in 2023, according to access-to-information records dug up by Canadian Taxpayer Investigative Journalist Ryan Thorpe. More shocking is that CMHC bonuses total $102 million since the beginning of 2020. It brings the adage, ‘Let them eat cake’ to a whole new level.
“Why is the CMHC patting itself on the back and showering staff with bonuses when Canadians can’t afford homes?” said Franco Terrazzano, Canadian Taxpayers Federation Federal Director. “If the CMHC’s number one goal is housing affordability, then it doesn’t make sense to hand out $100 million in bonuses during a housing affordability crisis. “Ninety-eight percent of the CMHC workforce took a bonus in 2023.
Ryan Thorpe reported that at least 2,283 CMHC staffers took home bonuses last year, costing taxpayers $27.2 million, with the average bonus coming in at about $11,800. The CMHC’s 10 executives received $4.1 million in total compensation in 2023. That includes $3.1 million in salary (for an average of $311,000) and $831,000 in bonuses (for an average of $83,000).
The CMHC also paid executives $211,000 in other “benefits. “More than 2,000 CMHC staffers, representing 89 percent of its workforce, also got a pay raise last year. Not a single employee received a pay cut. There are now 1,073 CMHC bureaucrats taking home a six-figure annual salary, a 15 percent increase over 2022, representing nearly half (46 percent) of its workforce. Those six-figure salaries cost taxpayers a combined $140 million in 2023.
Terrazzano noted that CMHC is driven by one goal: housing affordability for all, according to its 2023-2027 corporate plan. “The CMHC could do more to end the housing affordability crisis by hiring a thousand carpenters, rather than paying a thousand bureaucratic pencil-pushers six-figure salaries,” Terrazzano said.
Terrazzano went further criticizing Finance Minister Chrystia Freeland, who said in the 2023 Budget, “The government will also work with federal Crown corporations to ensure they achieve comparable spending reductions, which would account for an estimated $1.3 billion over four years.”
“The feds need to stop rewarding failure with bonuses,” Terrazzano said. “Freeland said she would find savings in Crown corporations and these bonuses should be the first thing on the chopping block.”
