Back in May, the Liberal/NDP’s Housing Minster Sean Fraser was traipsing across the country saying he would “actually solve” the housing crisis in Canada by building 3.9 million homes by 2031. That works out to about 488,000 new homes that Fraser expects to have built every year from 2024 to 2031 to “actually solve” the problem. To coin a couple of old adages, a new report from Canada Mortgage and Housing Corporation (CMHC) shows Fraser was a day late and a dollar short, dreaming the impossible dream. To coin a new name for the Liberal’s plan for solving the housing shortage, let’s go with ‘Fraser’s Follies’ because that’s what it is. In its 2024 Housing Supply Report, CMHC said, “Total housing starts in the six largest census metropolitan areas rose by 4% in the first half of 2024 compared to the same period in 2023. The level of new construction (68,639 units) was the second strongest since 1990. However, when adjusted for population size, combined housing starts were close to the historical average and weren’t enough to meet growing demographic demand.” “Given the long history of supply not keeping up with demographic demand this level of activity is not enough to reduce the existing supply gap and improve affordability for Canadians.” The busiest construction time of the year is rapidly coming to a close, but let's be generous and say Canada’s builders are on pace to start 140,000 new homes in the country’s six largest cities this year, well short of Fraser’s Follies of 488,000 per year, nation-wide. But starts are only an indication of what the final outcome might be because the numbers that really count are completions and a number of variables, from labour to finances to the weather and more, play a significant role in how long the starts-to-completion phase can be. To shine some light on it, most of the starts in Canada this year and in the future, according to the CMHC report, will be apartments in low- and high-rise buildings. If we include the amount of time added by the bureaucratic gatekeepers at the municipal level for permits and approvals, a 20-storey apartment building can take anywhere from five to seven years to reach the completion stage. This time frame may or may not include the caveat that builders of high-rise buildings won’t receive financing until, depending on the situation, 50% to 75% of the apartments in the building have been sold and deposits received. “Except for Calgary and Edmonton, condominium apartment starts fell in the first six months of 2024, a trend we expect will continue as developers struggle to reach the minimum pre-construction sales needed to start construction,” says the CMHC report. “Both investors and end users have significantly reduced their purchases of new condominiums because of the impact of higher interest rates.” So, the number of the most-affordable new homes that will be available in the coming months and years in Canada is going to decrease, putting pressure on the crisis Fraser, in his folly, says he will “actually solve.” I can’t imagine there is anyone in the new home construction industry who believes for a second that Fraser’s Follies will ever become reality, but logic escapes the minster (as it does them all), who was being questioned by Conservative MP Leslyn Lewis (Haldimand-Norfolk, ON) at the Commons transport committee over the improbability of achieving the construction target, according to Blacklock’s Reporter. “Your government has set some pretty ambitious targets to build homes for Canadians,” said MP Lewis. “My view is people who would suggest a problem is impossible to solve shouldn’t try to interfere with the person who is trying to actually solve it,” said Fraser. “If your goal is to throw up obstacles every way, feel free.” “Have a field day,” he added. “I am not going to look anyone in the eye and tell them things are perfect when it comes to housing. I am going to be the first to say I know we need to do more, but then I am going to be the person who actually goes and does it.” “There’s a lot of details that we need to work out because some of these will involve collaboration with other levels of government,” Fraser told reporters on April 17. And there’s the rub. US President Ronald Reagan famously said the nine most terrifying words in the English language were “I’m from the government and I’m here to help.” He could easily have made it 15 words, by saying “I’m from the government and I’m here to help solve problems created by the government.” The Canadian housing crisis was created by the Liberal/NDP coalition government and Fraser’s Follies isn’t going to solve it by pissing away billions of taxpayer dollars into the black holes of bureaucracies at every level of government. Those governments need to get the hell out of the way and let the experts in the construction sector devise a private sector solution. Yes, they would need to be funded, but it would be much less than the billions that Fraser’s Follies have cost taxpayers to date, to no avail.
