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New report highlights housing affordability challenges across Canada

Published

12 months ago

6 minute read

From the Frontier Centre for Public Policy

By Wendell Cox

The year 2022 marked a concerning increase in “severely unaffordable” housing markets, extending beyond the scope of the six major markets.

The Frontier Centre for Public Policy’s Demographia Housing Affordability in Canada report, released today, cast a spotlight on the pressing issue of housing affordability in Canada. This comprehensive report offers a detailed analysis of middle-income housing affordability during the third quarter of 2022, focusing on 46 housing markets referred to as census metropolitan areas.

The report goes beyond the conventional analysis of property prices, delving into the intricate interplay between house prices and income. Price-to-income ratios, a crucial metric for assessing housing affordability, have gained global recognition. Esteemed institutions, including the World Bank, United Nations, OECD, and IMF, have endorsed this measurement. The Frontier Centre for Public Policy’s housing affordability index adopts a similar approach, utilizing the “median multiple” calculation. This calculation involves dividing the median house price by pre-tax median household income.

The report sheds light on the historical context of housing affordability within Canada’s six major markets – Vancouver, Calgary, Edmonton, Toronto, Montreal, and Ottawa – each with populations surpassing one million. The period from 1970 to the mid-2000s witnessed relative stability in the housing affordability landscape. However, by 2005, Vancouver’s market initiated a significant shift towards unaffordability, a trend that has only intensified since the mid-2000s.

The year 2022 marked a concerning increase in “severely unaffordable” housing markets, extending beyond the scope of the six major markets. The number of severely unaffordable markets surged from 18 in 2019 to 24 among the surveyed 46 markets. In contrast, the count of “affordable” markets dwindled from eight in 2019 to a mere three.

The advent of remote work, or “telecommuting” during the pandemic led to a surge in households seeking more spacious living spaces. This surge in demand outpaced supply, resulting in a “demand shock” that further exacerbated the challenges of housing affordability.

The epicentre of unaffordable housing primarily lies in British Columbia and Ontario. Notably, Vancouver and Toronto emerged as the most severely unaffordable major markets, ranking third and 10th least affordable among 94 markets in Demographia’s International Housing Affordability Report 2022. This phenomenon extended beyond Vancouver, impacting other markets in British Columbia. Similarly, the trend reached markets beyond Toronto, prompting a net interprovincial migration as households pursued more affordable housing options.

Amidst these challenges, four markets – Moose Jaw (SK), Fort McMurray (AB), Saguenay (QC), and Fredericton (NB) – have managed to uphold their affordability. The Canadian housing market faces intensified scrutiny, with analyses highlighting the formidable task of addressing the nation’s housing crisis. This includes restoring affordability and enabling home ownership amidst obstacles such as the scale of the issue and the capacity of the home-building sector.

At the heart of the crisis lies urban containment regulation, which has driven land prices to unsustainable levels, constraining housing supply for middle income households. This scenario arises from the deliberate intent of urban containment policies to inflate land prices. Disparities in land costs across markets play a pivotal role in housing affordability disparities. Government policies, like urban containment, unintentionally contribute to government-induced inequality by inflating land prices. Practical alternatives exist to revitalize housing affordability.

Migration to more affordable housing markets has become a priority for many, as evidenced by an unprecedented population shift away from major metropolitan areas towards regions with more affordable housing options. Ensuring affordability remains in these markets is pivotal. Neglecting this could lead to replicating the ongoing affordability crisis in regions that are currently more affordable, which could limit opportunities for future generations and impact Canada’s attractiveness as an international migration destination.

About the Frontier Centre for Public Policy The Frontier Centre for Public Policy is an independent, non-partisan think tank that conducts research and analysis on a wide range of public policy issues. Committed to promoting economic freedom, individual liberty, and responsible governance, the Centre aims to contribute to informed public debates and shape effective policies that benefit Canadians.

Wendell Cox is a Senior Fellow at the Frontier Centre for Public Policy. He is principal of Demographia.com, author of Demographia World Urban Areas and an author of Demographia International Housing Affordability (19 annual editions) and Demographia World Urban Areas. He earned a BA in Government from California State University, Los Angeles and an MBA from Pepperdine University. He served as a visiting professor at the Conservatoire des Arts et Metiers in Paris, a national university.

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Alberta fiscal update: second quarter is outstanding, challenges ahead

Published on November 21, 2024

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Alberta maintains a balanced budget while ensuring pressures from population growth are being addressed.

Alberta faces rising risks, including ongoing resource volatility, geopolitical instability and rising pressures at home. With more than 450,000 people moving to Alberta in the last three years, the province has allocated hundreds of millions of dollars to address these pressures and ensure Albertans continue to be supported. Alberta’s government is determined to make every dollar go further with targeted and responsible spending on the priorities of Albertans.

The province is forecasting a $4.6 billion surplus at the end of 2024-25, up from the $2.9 billion first quarter forecast and $355 million from budget, due mainly to higher revenue from personal income taxes and non-renewable resources.

Given the current significant uncertainty in global geopolitics and energy markets, Alberta’s government must continue to make prudent choices to meet its responsibilities, including ongoing bargaining for thousands of public sector workers, fast-tracking school construction, cutting personal income taxes and ensuring Alberta’s surging population has access to high-quality health care, education and other public services.

“These are challenging times, but I believe Alberta is up to the challenge. By being intentional with every dollar, we can boost our prosperity and quality of life now and in the future.”

Nate Horner, President of Treasury Board and Minister of Finance

Midway through 2024-25, the province has stepped up to boost support to Albertans this fiscal year through key investments, including:

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After a 4.4 per cent surge in the 2024 census year, Alberta’s population growth is expected to slow to 2.5 per cent in 2025, lower than the first quarter forecast of 3.2 per cent growth because of reduced immigration and non-permanent residents targets by the federal government.

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Revenue for 2024-25 is forecast at $77.9 billion, an increase of $4.4 billion from Budget 2024, including:

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Expense for 2024-25 is forecast at $73.3 billion, an increase of $143 million from Budget 2024.

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After calculations and adjustments, $2.9 billion in surplus cash is forecast.

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Contingency

Of the $2 billion contingency included in Budget 2024, a preliminary allocation of $1.7 billion is forecast.

Alberta Heritage Savings Trust Fund

The Alberta Heritage Savings Trust Fund grew in the second quarter to a market value of $24.3 billion as of Sept. 30, 2024, up from $23.4 billion at the end of the first quarter.

  • The fund earned a 3.7 per cent return from July to September with a net investment income of $616 million, up from the 2.1 per cent return during the first quarter.

Debt

Taxpayer-supported debt is forecast at $84 billion as of March 31, 2025, $3.8 billion less than estimated in the budget because the higher surplus has lowered borrowing requirements.

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Trump’s government efficiency department plans to cut $500 Billion in unauthorized expenditures, including funding for Planned Parenthood

Published on November 21, 2024

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By Emily Mangiaracina

Elon Musk and Vivek Ramaswamy shared their plans to ‘take aim’ at ‘500 billion plus’ in federal expenses, including ‘nearly $300 million’ to ‘progressive groups like Planned Parenthood.’

Elon Musk and Vivek Ramaswamy are planning to ax taxpayer funding for Planned Parenthood as part of their forthcoming work for the next Trump administration, they revealed in a Wednesday op-ed in The Wall Street Journal. 

The businessmen have been appointed by President Donald Trump to lead a new Department of Government Efficiency (DOGE), which will work from outside the official government structure to cut wasteful government spending and excess regulations, as well as “restructure federal agencies,” as Trump announced last week on Truth Social.

Musk and Ramaswamy shared Wednesday that as part of their work at DOGE to downsize government spending, they will be “taking aim at the $500 billion plus in annual federal expenditures that are unauthorized by Congress or being used in ways that Congress never intended,” thereby “delivering cost savings for taxpayers.”

They specifically called out Planned Parenthood as one institution that will lose taxpayer funding once DOGE kicks into gear. In their op-ed, the duo said the federal expenditures they plan on cutting includes the “nearly $300 million” dedicated “to progressive groups like Planned Parenthood.”

Musk and Ramaswamy also reportedly will take aim at the “$535 million a year to the Corporation for Public Broadcasting and $1.5 billion for grants to international organizations,” according to Catholic Vote, although they have not shared all of the federal spending they plan to cut or reduce.

“With a decisive electoral mandate and a 6-3 conservative majority on the Supreme Court, DOGE has a historic opportunity for structural reductions in the federal government,” the business duo wrote. “We are prepared for the onslaught from entrenched interests in Washington. We expect to prevail.”

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“This is not sustainable. That’s why we need the Department of Government Efficiency,” Musk said.

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