In honour of National Housing Day, I’m live blogging from the National Housing Conference in Ottawa. One year after the adoption of the country’s first National Housing Strategy, CMHC is hosting housing experts from around the world on topics as diverse as social inequality and innovative financing tools.

Yesterday’s keynote speaker was architect Douglas Cardinal, who spoke about the different worldview between Indigenous and settler cultures. He gave examples of his engagement with communities, learning from their cultural practices and integrating their daily routines into his designs. There was a very interesting plenary session on the increasing commodification of the housing market with Manuel Aalbers (KU Leuven), Michael Oxley (Cambridge University), Leilani Farha (UN Special Rapporteur on the Right to Housing), Paul Kershaw (UBC), Susanne Soederberg (Queens), and CMHC President/CEO Evan Siddall. In a session on financial tools, presenters discussed energy-efficient mortgages and guidelines on energy efficiency and enforcement tools for rental buildings in the European Union. A session on alternative housing models featured a mixed-income cooperative model from Winnipeg (Blair Hamilton, Co-operative Housing Federation), tenancy in common ownership from San Francisco (Rosemarie MacGuinness, Sirkin Law), community micro-investments in local businesses from Portland (John Haines, Community Investment Trust), and fractional property investment from Australia (Sibel Buyukbaykal, Brick X).

Today’s keynote is Danny Dorling, Professor of Geography at the University of Oxford. The UK is now the country with highest income inequality in Europe. He commented that in countries where inequality is considered a real issue, like Norway, they’re trying hard to reduce it–in the UK and the US governments prioritized social inequality in the 1950s up until the early 1980s, but now they blame poor families for not trying hard enough. Since 2004, families having to live in the private rental market, where they pay exorbitant rents and can be evicted with only two months notice, have increased dramatically–eviction from private rental units is the most rapidly increasing reason for homelessness. However, income inequality has peaked in all OECD countries. Dorling concluded by saying that after the Grenfell Tower fire, housing has become central to UK politics. He suggested looking at second, third, or fourth homes that are empty and what is done about this in other countries like the Netherlands and Austria (e.g. increased property taxes, empty home taxes); deciding that everyone would pay 30% or lower for their housing by a certain year and then understanding what targets have to be met each year to achieve that; inspecting properties and allowing the state to take them over if they are not well maintained; allowing tenants to report poorly maintained properties and allow them to be taken over by the local housing authority.

The keynote plenary session today featured bankers from the Bank of Canada (Carolyn Wilkins), Reserve Bank of Australia (Carl Schwartz), Finansinspktionen (Swedish Financial Supervisory Authority) (Erik Thedeen), and the Central Bank of Ireland (Roberrt Kelly). In Canada, mortgage rules have been tightened since 2016 and the Bank of Canada raised interest rates, decreasing vulnerability among owner households with new mortgages (those who had borrowed up to 450% of their incomes). In Sweden, strong economic growth has contributed to rising housing costs since 2012. They introduced a loan to value cap and an increase in percent amortization for the loan to income ratio, and have seen a decrease in those vulnerable owner households. Australia introduced investor lending restrictions as well. In Ireland they increased the downpayment amounts to 10%  for first time buyers and capped mortgages at 3.5 times their income; for second and subsequent buyers it was 20% deposit and the same mortgage cap. This helped stabilize the situation, but force first-time buyers to spend longer saving their downpayment, which will maintain pressure on rental housing.

In a session on focused on rental housing, Marika Albert (BC Non-Profit Housing Association) discussed the Canadian Rental Housing Index they created with partners across the country, using data from the 2016 long-form Census. According to Catherine Leviten-Reid (Cape Breton University), Cape Breton Regional Municipality conducted a study on their own, as the secondary rental housing market is not captured by the CMHC Rental Housing reports. They found that 43% of rentals and most new construction is in the secondary market, and that one and two bedroom units are more expensive than purpose-built rental units–three quarters of the secondary market units did not include all utilities. Just over a third of secondary market units were marketed towards seniors, and only 8% towards professionals. Nathanel Lauster (UBC) discussed the growth in condominiums as investment-rental opportunities, but contributes to more fragile tenancies as landlords can more easily claim the property for their own use. Rents are also more expensive than for purpose-built rentals, rented condo units have a higher turnover, and the typical households are couples rather than single parents or two parents with children. Jacob Cosman (Johns Hopkins University) discussed the declining rate of new housing construction in the US since the recession, and how in most cities it’s one or two companies that are building the majority of new units. There are fewer units built in general, less supply in the pipeline, and higher price volatility because of the monopoly. He hasn’t seen this same pattern in Canada as we didn’t see a major decrease in construction after the US housing market collapsed.

Our panel on smart growth: Stu Niebergall (Regina Home Builders Association), Oualid Moussouni (University of Quebec at Montreal), me, Cheryll Case (CP Planning), and Sean Gadon (City of Toronto)

We had an interesting update from Maryam Monsef, the Minister of Status of Women, on the role that women will be playing in the new National Housing Strategy. A Pan-Canadian Symposium on Women’s Housing was held with a range of women across the country directly impacted by women’s housing and homelessness. They produced six calls to action including guaranteed annual income, including women with lived experience in policy development and roundtables, north and Inuit housing, transparency with the National Housing Strategy and National Poverty Strategy, and support for a symposium next year. CMHC President Evan Siddall agreed to many of these, and CMHC will be publishing the report from the symposium within a few weeks.

The final plenary session looked at the impact of private capital on social outcomes. Nancy Neamtan (Territoires innovants en économie sociale et solidaire) forcused on solidarity finance: tools, institutions, actors that are designed for collective initiatives and enterprises (non-profits and co-ops), which are co-built with community actors. In Québec, there has been a 32% growth in this type of financing from 2013-2016. Some examples include Réseau MicroEntreprendre, which has 15 funds in 12 regions, the Chantier de l’économie social Trust in 2007, a $52.8 million fund in patient capital for collective organizations and enterprises, and $66 million invested in 249 projects in the province. There’s a fund for cooperative student housing (FILE) which was initiated and supported by student associations and youth organizations and will allow construction of co-op housing units, and one to assist community housing renovations (FARHC). Major challenges include scaling these efforts up, continuing to attract new categories of investors, and mobilizing private capital in long term (bond type) investments. Shayne Ramsay (BC Housing) discussed the new Housing Investment Corporation, which allows non-profits to access national and international capital–it’s funded partly by a $20 million contribution from CMHC, which allows the HIC to leverage $400 million in loans, and TD and Scotiabank are co-leads on the project. This allows the money to be available regardless of the federal government’s priorities, and enables long-term fixed-rate mortgages (30 years +) for non-profits, because it aggregating non-profits together rather than treating each one like a small, individual borrower. Their first loans will be given in the next few weeks, focused on new housing and meeting the housing innovation fund criteria. Michael Oxley (Cambridge University) mentioned that non-profit housing associations in the UK raise money through selling their own bonds and by borrowing from traditional lenders, as well as the Housing Finance Corporation. Inclusionary zoning is also increasing in importance–it contributed to over 40% of affordable housing starts from 2014-2016. Tax concessions have been granted in other countries (e.g. Germany) to developer who agree to provide rental units at below-market rents to low income households. Tara Vrooman (Vancity).

A great effort from CMHC in bringing together a very diverse group of people to discuss affordable housing, including non-profit staff, people with lived expertise, government officials, and researchers!

Today I attended a webinar on non-market initiatives to increase affordable housing through the Planning Institute of British Columbia. Given the fact that the National Housing Strategy is hot off the press, this was the third in a series of very timely webinars PIBC has hosted on the topic.

CMHC’s new National Housing Strategy prioritizes the idea that “housing rights are human rights”: 530,000 people will be removed from core housing need (they currently live in units that do not meet affordability, suitability, or adequacy). Lance Jakubec, Innovation Fund Consultant (and my former co-worker at CMHC!), explained that new legislation will require and the new national housing council will draw on perspectives from a range of people including those with lived experience in affordable housing. National Housing Co-Investment Fund will ensure that existing rental housing isn’t lost due to lack of upkeep: 15.9 billion will be allocated to accessibility, energy efficiency and affordability initiatives to preserve and repair existing units, and up to $200 million in federal lands will be transferred at low or no cost to build accessible, affordable housing in municipalities. $4.3 billion will be devoted to the resilient community housing sector (housing provided through co-operatives and non-profit providers) which will preserve over 300,000 affordable units across the country. As I reported last week, most initiatives will begin in April 2018 so we’ll expect to see more details on these in the new year. The CMHC Observer allows you to use the Census Program Data Viewer to assess core housing need down to the Census Tract level, generate graphs and reports.

Armin Amrolia, Executive Director of Development & Asset Strategies at BC Housing, noted that they recently added student housing into their housing continuum model. She discussed the impact of the new NHS on non-profits and co-operatives in BC: almost 30,000 units will expire by 2033 (15,000 by 2025 and 14,000 by 2033). Expiry means the end of government subsidy, the end of the requirement to make financial/administrative reports to BC Housing or CMHC, and the end of rental subsidies for tenants in many cases. There are about 21 active redevelopment projects (total 1,745 units) who have approached BC Housing about redeveloping their units as affordable housing now that their contracts have expired. BC Housing’s low-cost financing tool allows up to 100% financing on construction, with an interest rate of 1/16%, no loan insurance required, and a 1% loan fee. Take-out financing for non-profits allows 100% financing, a competitive bulk rate of 2.9% over a 10-year term, CMHC loan insurance of $75/unit (max $5000) and an amortization term of 35 years. These are extremely attractive rates for non-profits and developers.

  • Lynnhaven, Abbotsford: the society owned 40 detached units for low-income seniors. In 2010 the society approached BC Housing for a land swap that would allow them to build 64 bachelor units closer to amenities. The developer provided the up-front costs and the project funding came through the Community Partnership Initiative. The new units were built first so that the existing tenants could be rehoused before the older land was redeveloped. The project also received funding from CMHC, the City of Abbotsford, and the society used some of their own equity.
  • Kiwanis Court, Richmond: Richmond Kiwanis Seniors Citizens Housing Society owned a building with 122 units for low- to moderate-income seniors. Their partners were City of Richmond, Polygon Homes and BC Housing. The society retained about 1/3 of the property and 2/3 would go to the developer. The society retained the affordability they required, while the developer built a market rate project next to the affordable building. The unit number increased by 174 units. All of the tenants were rehoused during the redevelopment project and then relocated to the new building. Again, the society provided some equity, as well as the City providing some funding in their budget.
  • Pleasantvale, Kelowna: the Society of Hope operated a 50-unit building for low- to moderate-income seniors. They approached BC Housing and the City of Kelowna–the society was willing to put their site up for redevelpment and the City provided two adjoining plots to develop 50 one-bedroom units and 20 townhouses. Again, the tenants were all relocated during construction and then rehoused in the new project. The City provided some funding and a development charge credit as well.

Kaeley Wiseman, MCIP, RPP, Manager of Planning & Development at M’akola Development Service. M’akola Housing Society has 1,600 units on Vancouver Island. Their Development Service helps non-profits understand the complexity of housing development. M’akola is also working on a lot of redevelopment projects with the end of operating agreeements. Traditionally, their affordable housing concept included low-density (townhouses), small household sizes, isolated sites often removed from communities (often the only available parcel of land), often reliant on subsidies. This model describes most of the housing M’akola currently operates. The pro-initiative model includes higher density (mixed-use and taller buildings), serves more families and a diverse mix of residents, has lower utility costs for tenants, focuses on tenant education, focuses on affordability in construction, meets tenant needs through in-houses services/supports, has shared spaces (allowing non-profits more ownership of their building through commercial space), allows internal mobility/flexibility and is operationally sustainable (e.g. without subsidy). Kaeley emphasized the need for a clear vision and mission, the development of partnerships to help fund a redevelopment project, and early and ongoing communication with levels of government (municipalities/regions, province).

Juliet Van Vliet, Director of Lands, Public Works and Resources for Toquaht Nation (and SCARP alumni–shout-out!) noted that the Nations have something to teach municipal governments in accessing federal funding (and it seems, developing a clear vision/priority for affordable housing). Toquat Housing was in treaty negotiations from 1991-2011, which meant lack of clarity on housing tenure in 10 houses. There were also major issues with water quality and infrastructure (a waste water treatment facility and fiber optic network were completed in 2016). The Nation worked hard on developing a clear vision on housing, engaging residents as part of an Official Community Plan (2012-2015), establishing a home ownership program (2016-2018) and setting aside $320,000 towards rental housing in their 2016 budget, an identified need. This money (equity cash from the claim settlement) was used to leverage an additional $1 million from CMHC to build eight units in total). UBC students also supported the planning for new housing. The new units are to be affordable based on the needs of low-income residents ($587 average unit rent, with deep affordability available), will be Nation-owned on Toquat lands, and will include a gathering space which is also lacking in the community. Some of the materials used include local cedar which was milled in the community.

These projects are amazing illustrations of what has been possible even without the new funding the NHS will be providing. I’ll be sharing them with my students in housing policy.

The Liberal government celebrated National Housing Day yesterday with an announcement that the new National Housing Strategy would dedicate $40 billion to develop affordable housing across the country. The strategy is expected to:

  • build 100,000 new units
  • repair 300,000 units
  • provide 300,000 with financial assistance through the Canada Housing Benefit
  • decrease homelessness by 50%
  • protect 385,000 from losing their homes
  • remove 530,000 from housing need (1.7 million were in core housing need in 2016)

 

All of these programs, except the Canada Housing Benefit, will be funded with money set aside in the 2017 federal budget except for the Canada Housing Benefit, which will not begin until 2020 and will be half funded by the provinces and territories. One of the key strategies will provide $4.7 billion in financial contributions and $11.2 billion in low-interest loans to developers who agree to rent 30% of units at 80% of market rent for at least 20 years, achieve at least a 25% decrease in energy consumptions and emissions over national standards, and meet accessibility standards in at least 20% of units, among other criteria.

Most exceptional is the intention to introduce new legislation that will require the federal government to maintain a National Housing Strategy and report to parliament on targets and outcomes. This signals the Liberal government’s intention to recognize housing as a fundamental human right. A new federal housing advocate will advise the federal government, and crown corporation Canada Mortgage and Housing Corporation, on possible solutions to affordable housing challenges. A new national housing council and and national communications campaign are also in the works.

Widely being hailed as a breakthrough, “once-in-a-generation” plan, some are criticizing the government for waiting to implement one key element (the Canada Housing Benefit) until after the next election. Another missing element at this time is funding to maintain existing operating agreements for social housing provided by co-operatives and non-profit agencies, which the federal government has suggested is on the way.

There is a lot of excitement as provinces and municipalities determine how to integrate this funding into their own programs and policies in the coming months. Just eight months ago, the United Nations criticized Canada’s “persistent housing crisis”, including increasing levels of homelessness, social assistance benefits that are out of line with housing costs, lack of housing for people with disabilities, and stagnant social spending as a percentage of GDP. After years of waffling on housing priorities, failing to produce a strategy through proposed private members’ bills, and refusing to commit a steady stream of funding to provinces and municipalities, the federal government is back with a bang.

 

On March 22, the federal budget was announced, including $2.2 billion over the next 11 years to cities for transit projects, part of $11.9 million that would be allocated to infrastructure. The Liberal government commited to 50% of the funding for municipal projects. This week, municipalities across the country announced how they would use the much-needed funding for public transit infrastructure.

In British Columbia, the federal announcement was matched by the Province’s commitment to contribute another $2.2 billion, allowing regional authority TransLink to move ahead with Phase 2 of a ten-year plan in Vancouver. Projects will include the Broadway subway, which TransLink has wanted to build for over 20 years, Surrey light rail transit, replacement of the Pattullo Bridge, expanding bus and HandyDART services, more railcars and upgrades to the roads, cycling and walking networks.

The big news in Hamilton and Niagara Falls was that they will get all-day GO Transit service, with a contribution of $1.7 billion. Both municipalities also received funding for their bus services. Niagara Falls Transit will use their $3.4 million in federal funding (which will be matched by the city) to develop a real-time “next bus” app, buy new buses, update a transit hub, update its fleet management software, buy and install new fare boxes and allow online booking and management for its specialized curb-to-curb transit system. Hamilton will use its $32 million in federal funding for 13 projects including a bus storage and maintenance facility, new buses, rehabilitation of transit shelters and bus stops, automatic passenger counters, transit priority measures, and improvements at the Mountain Transit Centre.

In Guelph, $9.6 million federal funding will allow the municipality to buy new buses, replace fare boxes, upgrade bus stops, and upgrade the traffic control system. London’s proposed bus rapid transit system will get a boost, in addition to the transformation of Dundas Street in the core into a pedestrian-first “flex street”, replacement of all of London Transit’s bus shelters, and construction of protected bicycle lanes downtown.

Winnipeg announced 33 projects that will be jointly funded by the three levels of government including replacement buses, new bus shelters and handi-vans. The federal government’s 50% of the projects amounts to about $3.1 million, while the province will pay $1.5 million and municipalities will cover about $2 million.

Of the total $11.9 billion allocated for infrastructure, the federal budget sets out $2.2 billion for water and waste management in First Nations communities, $2 billion for the Clean Water and Wastewater fund, $1.5 billion for affordable housing, and $1.2 billion in social infrastructure for First Nations, Inuit, and northern communities. All this spending will come at a cost: the federal budget will not be balanced during the fourth year of the Liberal mandate as promised.

In experiential learning, students work on a real-world project, building the skills they will need after graduation and contributing their knowledge to a community organization, municipal department or other client. Experiential learning is a natural fit for the urban planning discipline, but has been used in fields as diverse as social work, biology, and computer engineering. At some universities, like the University of Oregon, the university partners with a different municipality each year, the municipality provides a list of projects they need help with, and different departments commit to developing workable solutions. It’s a win-win situation: students get the experience they need and often small municipalities or organizations without sufficient human resources are able to get projects completed.

As some of you know, last fall I taught my first urban design studio here in the Dalhousie University School of Planning. We focused on Mulgrave Park, a public housing community built in the north end of Halifax using federal-provincial funds in 1960. The students each  developed a small-scale proposal to improve the open and social spaces in Mulgrave Park. They included information for the client, the Mulgrave Park Caring and Learning Centre, on how such a proposal could be implemented and funded. One student, Justin Gosse, conducted an analysis of the retaining walls and their conditions on the steep site, suggesting ways in which they could be modified in the future. His project, in addition to other student work surveying the retaining walls, is informing Housing Nova Scotia as they proceed with detailed design and repair of the walls and infrastructure badly in need of repairs. As part of an effort to preserve social housing in Canada, the federal and provincial governments announced today that they will fund repairs to Mulgrave Park. The funding will pay for badly needed exterior building repairs, the restoration of crumbling retaining walls, and burying services. Construction will run from July 2017 until spring 2019.

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MP Andy Fillmore announces the $5 million in improvements in front of the students’ posters

MP Andy Fillmore (second from left) and Elaine Williams (second from left), a lifelong Mulgrave Park resident, at the announcement

MP Andy Fillmore (second from left) and Elaine Williams (second from right), a lifelong Mulgrave Park resident and President of the Mulgrave Park Tenants’ Association, at the announcement

The work of other students, including Amy Greenberg (window boxes with flowering plants for residents), Mona Al-Sharari (second community garden and greenhouse), Leen Romaneh (perception of safety), and Yuedi (Martin) Zhan (lighting) is also being integrated into future improvements at Mulgrave Park.

Congratulations to these fourth-year Bachelor of Community Design students, and to the often-overlooked residents of Mulgrave Park, who will benefit from these improvements for years to come. Our client Crystal John, Director of the Caring and Learning Centre, is very excited to think about the improvements coming soon! Crystal grew up in the neighbourhood and like many others living there, is truly invested in improving the community; her sister Elaine Williams, pictured with Andy Fillmore at the announcement, has also done a lot of work to improve conditions in the neighbourhood. Metro News reported that Elaine was in tears at the announcement, having campaigned for improvements for many years.

 

As most of you know, Canadians will soon have a National Housing Strategy. At this point, the federal government in conducting consultations on the strategy, and there are many ways that citizens, housing organizations, community groups, and others can get involved.

There is a survey on the site www.letstalkhousing.ca if you haven’t already taken it. There’s also a spot that you can use to upload comments or ideas in the form of a document. You can do both of these before October 19. Since students in my fourth-year Bachelors course are currently working on a project in a public housing community, I’m having them upload their ideas on affordable housing to the National Housing Strategy website next week.

Housing, public health, and community organizations have been involved through a national stakeholder roundtable and expert roundtable. A huge variety of issues discussed including:

  • options for allowing seniors to stay in their homes as long as possible through accessibility modifications
  • rehabilitation of on-reserve housing and involvement of Indigenous communities on CMHC boards on the development of new housing
  • better access to financing options for individuals, including assistance for new homebuyers who want to move out of rental housing
  • better communications strategies between agencies to ensure better maintenance of public housing
  • removing barriers such as lengthy development permit processes
  • tax incentives for rental housing such as deferring taxes if a rental building is sold and the proceeds reinvested in a new rental building
  • allowing the federal government to support municipalities in deferring development charges for rental housing
  • immediate rehabilitation of existing social units
  • a more sustainable operating model for social housing
  • portable housing benefits, paid up to the cost of actual rent, leaving the tenant with choice

A major emphasis on Indigenous housing (quality, financing, roles and responsibilities of institutions) was a common thread, and I doubt anyone would argue that this is severely needed. Another main theme was providing options across the housing continuum. As we know, all three levels of government and the private sector are necessary for more stable, long-term initiatives in affordable housing but the federal government and CMHC were repeatedly singled out for leadership in developing strategies and partnerships. You can view videos of the closing sessions here, and transcripts will soon be available: https://www.letstalkhousing.ca/media/video/index.cfm

I encourage everyone to participate through the website, and stay in touch for updates on this exciting new federal policy by subscribing to updates (there’s an option to include your email address at the end of the survey). The government is planning to release a summary of this first consultation phase on November 22.

Real estate speculation happens across the country, but is particularly popular in our largest cities. Some say foreign ownership and speculation is driving housing prices up for local residents: wealthy investors living in far-off countries buy housing with no intention of living in it. But should the government step in and regulate the practice of flipping houses?

Just a month ago, the Simon Fraser University Urban Studies program held a symposium on housing affordability. Their data-packed brochure indicated that Vancouver has been second to last in housing affordability for the past six years, and 40% of residents consider the high cost of housing to be the most important issue in the city. The city’s annual homeless count has identified an increasing number of homeless people in the city–some 2,700 people in 2014 compared to about 1,100 in 2002. While 35% of homes in Vancouver are rented, only 17% of new construction was purpose built rental housing. Urban Futures has done a number of studies on foreign ownership: in one, they found that the 2011 Census (National Household Survey) showed that Vancouver didn’t have an excessive level of foreign occupancy–that is, about 1.4% of the apartment units in the city were occupied by foreign or temporary residents, but there are no Census data that specify their citizenship, length of stay, or that support a thesis on foreign investment. In another, they found that only 0.4% of purchases in the region in 2010 were made by people living outside of Canada. But an article in the New Yorker last year quoted a report from Sotheby’s International Realty Canada: in the first half of 2013, foreign buyers accounted for nearly half of luxury home sales in Vancouver.

Vancouver Mayor Gregor Robertson announced on Friday that he has proposed that the BC government develop a speculation tax who “buy a home just to make a quick buck” by selling it 6 months later. He’s asking Vision voters to support the call for a new tax on investors, and other tools like an increased property tax on the most expensive residential properties with proceeds invested in new affordable housing.

“Together, we can send a message that housing shouldn’t just be an investment commodity – it should be for living in.” –Mayor Gregor Robertson

Less than two days after Robertson’s announcement, a petition started circulating in Toronto calling on Brad Duguid, Minister of Economic Development, Employment, and Infrastructure, to restrict foreign investment in residential real estate in the Toronto region. As of 5 pm today Shaan Brach’s petition had 10,491 supporters.

I’m sure that the Liberal governments of both Ontario and BC will shy away from regulating real estate speculation and taxing the rich, but nevertheless the petition and call for a new tax do raise several troubling questions: who should be allowed to buy housing in Canada? Should the government (either provincial or federal) intervene when housing prices climb too high for the average person or household to afford? And if so, how should this be done?

Canadian governments have a history of intervening when market conditions create affordability issues for local residents or when housing conditions are poor. Forty years ago, Canada Mortgage and Housing Corporation was busy supporting the development of co-operative and non-profit housing with the ample funding of the federal government. The federal government helped develop co-operative housing from 1973-1991, establishing long-term operating agreements coinciding with the length of the mortgage. They also had programs to help first time homebuyers, supplement rents, and rehabilitate housing in historic and central neighbourhoods. But over the years, their balanced approach to housing affordability changed. The two ends of the spectrum (households with very low incomes and homeowners with enough equity to buy) continued to benefit, but programs that helped renters and low- to middle-income households were gradually dropped.

Municipalities and developers have also introduced innovative solutions to housing affordability:

  • Equity loans–Toronto’s Option for Homes and the City of Saskatoon/Affinity Credit Union Equity Building Program help people move into affordable ownership by loaning purchasers a small percentage of the downpayment
  • Shared equity–at SFU, units in the Verdant building are reserved for university faculty and staff and resale prices are restricted to 20% below market value), and community land trusts.
  • Affordable Housing Trusts–municipalities such as Vancouver, Surrey, Richmond, Coquitlam, and Whistler have developed housing trusts through legislation and with the cooperation of the BC government

The issue of foreign investors driving up housing prices is critical in cities like Toronto and Vancouver, but there’s no quick fix for the affordability problems that took decades to create. In cities like Calgary, Fort McMurray, and Kelowna, affordability is still a major issue even without high levels of foreign investment. In Edmonton, 33.5% of all condominium units are rented. Researchers and policymakers across the country have been trying to find and implement the solutions for at least two decades. A speculation tax would only be part of the solution, but combined with better rent controls and a higher high-end property tax whose revenues would be used to build and maintain housing of different types for different income levels, it could be a good start. We definitely need an increased role for the provincial and federal governments in affordable housing, but that’s not news.

Last week’s federal budget announcement has raised the hackles of transportation analysts over the potential for Canadian cities to implement badly needed public transit in its most populous areas. With the creation of a new fund for public transit of $250 million in 2017, the fund would increase to $500 million in 2018 and $1 billion by 2019. This is the first time a federal government has proposed a permanent transit fund–but make no mistake, this budget was designed to counter voter fears in an election year. It has no basis in reality.

While mayor John Tory said he was confident the City of Toronto would get its fair share of the federal funds, TTC Chair Josh Colle said it’s too early to make assumptions because cities across the country would compete against each other to fund projects. Ontario Finance Minister Charles Sousa said the funding still isn’t enough to meet the needs of Ontario cities, or rapidly changing areas like the Ring of Fire mineral deposit, which needs a road or rail connection to develop further. Toronto Star commentator John Barber went even further, calling the proposed funding “a sop to the gullible” since $250 million would only build as much as one subway station in a single city. Vancouver mayor Gregor Robertson and Calgary mayor Naheed Nenshi agreed that the federal funding proposal is “too little too late”: years of federal backsliding means that cities have been struggling with aging infrastructure for decades, and the fund doesn’t make a dent in the backlog of proposals for improvements. In Winnipeg, mayor Brian Bowman would hope to use the funding to extend the city’s bus rapid transit system.

There’s no question that our cities face major challenges in dealing with congestion and air quality problems, and for too long the solution has been one-off funding solutions. The tide of transportation choice appears to be turning–even in American suburbs, Millennial transportation choices skew towards public transit. Since Millennials are the largest living generation in the US, transit is beginning to be viewed as an economic development tool to attract young people, in addition to contributing to lower traffic congestion. Many countries have seen a decrease in driving among Millennials, and some have seen an overall decrease in vehicle miles travelled as part of a broad cultural shift as people rethink the way they live and work. Canadian cities badly need a permanent federal fund for transit–but it needs to be in the order of magnitude of billions, not millions. It should also guarantee that small and mid-sized municipalities can get transit that meet their needs, including bus rapid transit, local bus, and bike paths.

Canada’s Temporary Foreign Worker Program has come under fire in the past few weeks for increasing the jobless rate among Canadians. Critics say that the program has resulted in the firing of Canadian workers, and lower wages and exploitation of foreign workers. Even harsher criticism has hinted at the potential development of a illegal labour force in Canada, since these workers have no support system and are vulnerable to abuse. Some companies, particularly fast food chains, have allegedly been abusing the program to hire foreign workers at lower salaries than Canadians. McDonald’s reports that only 4% of its over 85,000 staff in Canada are foreign workers, but it is one of the companies at the heart of the allegations; the company recently put a hold on hiring temporary foreign workers. Tim Horton’s and the Royal Bank of Canada have also been implicated.

Canada’s TFW program was created in 1973. The program was designed to allow companies to find only employees in key occupations, industries, or regions with proven labour shortages: in this case skilled workers, seasonal agricultural workers and live-in caregivers. Foreign workers, because they do not have permanent residency in Canada, were intended to fill short-term labour shortages while employers found local candidates. In 2002, the program was changed to cover all types of low-skilled workers through a pilot project for occupations requiring lower levels of formal training. Employers must have an approved Labour Market Opinion from Employment and Social Development Canada that shows:

  • the job offer is genuine
  • the wages and benefits are comparable to what would be offered to a Canadian worker
  • the employers has conducted reasonable efforts to hire and train Canadians for the job
  • the foreign worker is filling a labour shortage
  • the employment of the foreign worker will directly create new job opportunities or help retain jobs for Canadians
  • the foreign worker will transfer new skills and knowledge to Canadians, and
  • the hiring of the foreign worker will not affect a labour dispute or the employment of any Canadian involved in such a dispute

Since 2002, additional conditions were imposed for low-skilled workers, including the payment of return airfare by the employer, proof of medical insurance coverage for the duration of the job contract, support from employers to find suitable accommodation, and registration under the relevant provincial workers’ compensation regime. Before 2002, companies were required to pay TFWs the median wage for an occupation in a specific region; changes that year resulted in employers being able to pay high-skilled TFWs 15% and low-skilled TFWs 5% less than the median wage, as long as the wage remained above the minimum wage. Companies that hire workers through intra-firm transfers or from a country with an international agreement (e.g. the North American Free Trade Agreement) do not require an LMO and do not need to search for domestic workers first. Also, some provincial programs do not require LMO applications. In 2007, the length per permit for temporary foreign workers was extended from one to two years. Between 2007 and 2010, the Expedited Labour Market Opinion (E-LMO) pilot project allowed BC and Alberta employers faster and cheaper access to temporary foreign workers, initially for 12 occupations, but in 2008 this was extended to 33 occupations. In 2011, the length of time that temporary foreign workers could live in Canada was extended to four years.

A report from Canadian think-tank C.D. Howe asked the question, “Are temporary foreign workers really filling labour market shortages?” Dominique M. Gross, author of the report, says that the program grew from 101,000 workers in 2002 to 338,000 by 2012. In Alberta and British Columbia, the report says that the program potentially raised the unemployment rate by about 3.9% from 2007-2010. In 2008, employers in the two western provinces hired more than five times the number of confirmed low-skilled TFWs through LMOs than employers in the rest of Canada.

Between 2002 and 2013, Canada eased the hiring conditions of TFWs several times, supposedly because of a reported labour shortage in some occupations, especially in western Canada. By 2012, the number of employed TFWs was 338,000, up from 101,000 in 2002, yet the unemployment rate remained the same at 7.2 percent. Furthermore, these policy changes occurred even though there was little empirical evidence of shortages in many occupations. When controlling for differences across provinces, I find that changes to the TFWP that eased hiring conditions accelerated the rise in unemployment rates in Alberta and British Columbia. –Dominique M. Gross, Temporary Foreign Workers in Canada: Are they Really Filling Labour Shortages?

In short, the report says, there was no shortage of labour in either province from 2007-2010, particularly of low-skilled workers. Other provinces experiences similar unemployment trends even without the E-LMO pilot.

Employment and Social Development Minister Jason Kenney has already announced changes to the program, allowing on-site inspections of employers to ensure compliance to the rules, requiring that employers have a plan to transition to a Canadian workforce over time, and ensuring foreign workers are paid salaries comparable to Canadian workers. The flexibility of wage setting around median values has been eliminated, employers now must advertise all positions for four weeks, and English and French are the only possible required languages unless another is shown to be essential. A $275 fee per application and $150 visa fee have also been introduced for employers. This week, Kenney announced that the fast food industry would be banned from using the TFW program. This makes sense because these jobs do not require skills, and the jobless rate among Canadian youth, who would normally fill these jobs, has been high for years–in 2012, 13% of those aged 15-29 were not in education, employment or training. On April 8, a Victoria high school student was called in for an interview at a McDonald’s location; he had previously been rejected for the job when the manager said he would be hiring 11 temporary foreign workers.

However, these changes may not be enough: the C.D. Howe Report notes that in the US, part of the high $2325 fee used to hire a single foreign worker is used to train domestic workers; the fees in Canada are much lower than the cost of relocating a domestic worker from another province. Other countries also place a cap on the number of TFWs that may enter each year; in France, Italy, the UK, Spain and the US, TFWs are limited to very specific industries and occupations with very low unemployment rates. This makes it easier to monitor the availability of domestic workers in those in those sectors. Better labour market information is also needed to ensure that labour market shortages actually exist.

The Conservative and Liberal governments strongly backed the Temporary Worker program in order to satisfy industry claims of labour shortages, but now Kenney says that employers should respond to general skills shortages by increasing salaries, wages, benefits, and training. Canada has allowed companies to hire abroad for highly skilled engineers, millwrights, nurses, and others for decades; we have other immigration streams that allow these workers to enter the country and obtain permanent resident status at the same time. The problem is that these streams are overflowing with talented, university-educated employees, making waiting lists up to a decade long. Over fifteen years of research shows that poor links between immigration and labour markets prevail: once these highly-skilled, well-educated permanent residents enter Canada, they are unable to find work in the very industries that need them. Long application times and poor links between work experience and actual employment are but two of the reasons that applicants and employers alike turn to other streams that offer them quicker results–like the Live-in Caregiver and Temporary Foreign Worker Programs.

During Kenney’s tenure as Citizenship and Immigration Minister, he was charged with fixing this broken system. And he did–by forcing everyone who had a current application in the system to withdraw their applications and try again, by raising the minimum amount required for investor immigrants to $800,000, by adjusting the points system for skilled workers to emphasize language skills and by introducing new requirements for refugees and asylum seekers. Every move he made was controversial. The federal government announced on April 22 that they will be creating an Express Entry system to allow skilled immigrants to fill open jobs for which there are no Canadian candidates. Under this new system, applicants would submit an Expression of Interest indicating their skills, education, and work experience, and these would be matched by provinces, territories, and employers. Where there’s a match, applicants under the Federal Skilled Workers, Federal Skilled Trades, Canadian Experience Class, and Canadian Business Class Programs would be offered Express Entry. A valid job offer would guarantee that the applicant qualifies for permanent resident status.

There are no quick fixes to these problems, but clearly both TFWs and Canadians are suffering because of the loosening of program restrictions in the past decade. Employers are the only winners in this game: they get cheaper labour, more vulnerable workers who are willing to work under less favourable conditions, and do not have to be concerned about the long-term consequences of their hiring practices.

“Canada’s housing challenges are too big and too complex for any single order of government to solve on its own. We believe the government’s commitment in Budget 2013 to evidence-based solutions such as the Housing First approach for homelessness is a promising start, but they need to back it up with real results and expand that action to other areas of our affordable housing problem.” –Gregor Robertson, Vancouver mayor

Along with other big city mayors in Canada, Gregor Robertson announced a new national campaign to create more affordable housing and involving all levels of government to create a long-term housing plan. The Big City Mayor’s Caucus is part of the Federation of Canadian Municipalities, which often advocates a larger role for municipalities in federal issues such as housing.

Although housing affordability remains a major problem in Vancouver, the city has done a considerable amount to address it in recent years, including enabling new affordable rental housing on City-owned land, developing an arms-length Affordable Housing Advisory, establishing a Rent Bank to help renters in crisis through short-term loans, and creating the Rental 100 program which provides incentives for new, 100% rental housing. But of course, there’s only so much municipalities can do–housing experts agree that the federal, provincial and municipal governments need to cooperate to develop a long-term, sustainable funding model for affordable housing.