OPINION: Tear down barriers preventing new housing supply from coming onto the market

Federal government should provide incentives for cities to streamline development and better coordinate with infrastructure investments

Andrew Scheer, Brad Vis

Jun 03, 2021



With housing prices skyrocketing, the dream of home ownership is being pushed out of reach for more and more Canadians. So, what can be done about it?


The laws of economics are just as real as the law of gravity. Yet while no one believes they can toss something up without it coming back down, many politicians believe they can defy the laws of economics.


Take prices. The cost of something is determined by the supply of it and the demand for it. The more people want to buy something, the more expensive it gets. This sends a signal to the market, and the invisible hand goes to work. Producers see the rising price and make more of it. Once this increased supply meets the pent-up demand, the price lowers.


Yet for housing, policy makers have focused just on the demand side of the equation. For years governments at all levels put forward tools to help Canadians pay for new homes. Government-backed mortgage insurance lowered the amounts of down payments required. Flexibility added to RRSPs freed-up cash for those down payments. Tax credits were granted for costs associated with purchasing the home. Yet all of these initiatives are focused on the demand side of the formula.


Meanwhile, it’s clear housing affordability is greatly affected by low supply. In our consultations with groups across the country, the first thing we hear is “Increase supply! Just make it easier to build homes.”


The CD Howe Institute has outlined how “government policies whose impact limits the housing supply are among the key causes of higher property prices.” The chair of the Canadian Real Estate Association (CREA) identifies that the two big challenges for the Canadian housing markets “are the same ones we’ve been facing for months — COVID-19 and a lack of supply,” and CREA calls for the federal government to “incentivize provincial and municipal collaboration by emphasizing housing’s place in infrastructure.”


Put simply, red tape at the local level is making homes too expensive for working-class Canadians. City and provincial governments have put in place a complex web of rules and regulations that cause massive delays and extra costs for new homes being built. In fact, CD Howe also found that, on average, excessive regulations add $229,000 to the price of a new home.


Conservatives recognize that rising housing costs can be addressed by tearing down the barriers preventing new supply from coming onto the market. Since many of these barriers come from inefficient municipal processes, the federal government can and should provide incentives for cities to streamline development and better coordinate with infrastructure investments.


The Liberal government is not helping. Its infrastructure agenda is in shambles. Spread out among 27 programs, without proper reporting or tracking measures in place, it has seen billions lapsed and massive delays. The government’s Infrastructure Bank has taken $35 billion and completed zero projects in four years.


Conservatives will prioritize infrastructure projects that unlock development. Building public transit capacity so homes can be built in new areas, while shortening commute times, will help alleviate the pressure.


We will explore innovative policy tools to reward municipalities that cut the red tape adding so much to the price of a new home, and prioritize infrastructure dollars to the cities which increase housing density near transportation corridors and social hubs. We will incentivize smart development and once again make it attractive for private equity to invest in purpose-built rental housing to bolster Canada’s desperately low supply.


Increased home construction and targeted infrastructure have key roles to play in Canada’s post-pandemic recovery, but only if governments know where to lead and where to get out of the way. The Conservative Party of Canada gets this and has a plan to secure the future for Canadians.




Andrew Scheer is the Conservative Shadow Minister for Infrastructure and Communities and Brad Vis is the Conservative Shadow Minister for Housing