Tasha Kheiriddin: Trudeau doesn’t want you to own a home — he wants to be your landlord

Everyone agrees that Canada faces a housing shortage. But it’s not a shortage of homes: it’s a shortage of homes people can afford. In Toronto, for example, there is currently a glut of condos on the market. Prices have fallen as investors offload properties: high interest rates mean their mortgage payments exceed the rents they can get.

Homes have become unaffordable because of the disconnect between wages and prices. Why? Because there’s a disconnect between wages and prices. The average price-to-earnings ratio in Canada more than doubled from 3.2 in 1980 to 6.7 in 2020. Vancouver currently has the highest price to earnings ratio, at 12.3, followed by Toronto at 9.3. To put that in perspective, to buy an average house in those cities in July 2024, you need a household income of $208,000 and $226,000, respectively. Not exactly middle-class. 

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Now, the federal government claims to have an answer. The Liberals propose to convert unused public lands and buildings to housing — an idea the Conservatives have been floating for a couple of years. But here’s the twist: residents won’t own the land the home is built on. Instead, the government will lease the land to developers so it can maintain ownership and “keep home prices low.” 

In other words, it plans to get into the condo business, which private developers are abandoning because the market is saturated. In Toronto, several condo projects have gone into receivership in recent years, including The One, a supposedly “iconic” tower at the corner of Yonge and Bloor.  

The Liberal leasehold project was actually announced back in April just after the federal budget. But now it’s been repackaged in a shiny new video featuring the Prime Minister dumping on the Opposition for proposing to “sell it all to developers.” Instead, Trudeau presents long-term leasing as the saviour of the Canadian housing dream, while failing to mention its downsides.  

Long term leasing doesn’t build equity at the same rate, because you don’t own the land your home is built on. And like in a condo, your fees, aka rent, can rise unexpectedly, not just because of need, but by government fiat. When the state is your landlord, the feeling of powerlessness is palpable. 

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Ask the lease-hold cottage owners in Ontario’s public wilderness parks, who for years felt like a “sword of Damocles” sat over their head as the provincial government decided whether to renew their leases. Or leaseholders of recreational properties in Saskatchewan forced to move when the First Nations who leased them their lands changed the terms. Or the leaseholders in British Columbia who faced a 180 per cent rent hike when their property assessment increased.

On top of this, Trudeau claims that the government will build the “right kind” of homes, ie “affordable” homes. The government already has several projects under way, which Housing Minister Sean Fraser showed off in another shiny video. But how will the government keep these homes “affordable”? Will it sell at below market rates? Will it cut corners in construction? Will it means-test buyers? And what happens when they sell? 

The shiny videos do not address these questions. They are a public relations response to the Conservatives’ biggest issue: the sense that the Canadian dream is slipping away. A big part of that dream has always been home ownership, something that young people now say is out of reach. And when that dream slips away, so do the votes attached to it, as the Liberals are seeing at the polls. 

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Of course, the real way the government needs to address the housing crisis is on the demand side. They are finally doing this, by reducing the number of low-wage temporary workers in Canada that ballooned over the past few years, as well as cutting off a veritable deluge of international students. That announcement didn’t get a shiny video, however, just a little mention.  

Why? Because curtailing immigration runs counter to the Liberal narrative that diversity is our strength. By failing to manage that key file, this government has done a disservice to all Canadians, new and old. And now it wants to lease them their house. 

Postmedia News

Tasha Kheiriddin is Postmedia’s national politics columnist.

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