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Costly construction isn’t the culprit behind unaffordable housing

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From the Frontier Centre for Public Policy

By Wendell Cox

Land restriction creates what amount to land cartels. A now smaller number of landowners gain windfall profits, which, of course, encourages speculation

The latest Demographia report on housing affordability in Canada, which I produce for the Frontier Centre for Public Policy, reveals that over half of the 46 Canadian housing markets we assess are severely unaffordable. In fact, Vancouver and Toronto rank as third and 10th least affordable, respectively, among the 94 major global markets included in our latest international housing affordability study.

To evaluate housing costs, we utilize the “median multiple,” which divides the median house price within a given market (census metropolitan area) by its median household income. A multiple equal to or less than 3.0 is categorized as “affordable,” while anything exceeding 5.0 is labelled “severely unaffordable.”

Among the major Canadian housing markets, Vancouver (with a median multiple of 12), Toronto (9.5), Montreal (5.4), and Ottawa-Gatineau (5.2) fall into the severely unaffordable category. Vancouver has maintained a high median multiple for several decades, while Toronto has been in this range for approximately two decades. The increased prevalence of telecommuting has recently contributed to Montreal and Ottawa-Gatineau’s affordability challenges, leading to a surge in demand for larger homes and properties in more distant suburbs. In contrast, housing in Edmonton (4.0) and Calgary (4.3) remains comparatively affordable.

In Toronto and Vancouver, the implementation of international urban planning principles, particularly those promoting anti-sprawl measures like greenbelts and agricultural preserves, has led to unprecedented price hikes. This “urban containment” approach has consistently driven up land values where it has been adopted. And high land values rather than increased construction costs are what explain the substantial disparity between severely unaffordable and more budget-friendly markets.

Land restriction creates what amount to land cartels. A now smaller number of landowners gain windfall profits, which, of course, encourages speculation. Maintaining or restoring affordability requires eliminating windfall profits by ensuring a competitive market for land.

Another issue arises from urban planners’ preference for higher-density housing, such as high-rise condos. Some households may prefer high-rise living, but families with children typically seek housing with more land, whether detached or semi-detached. When they’re priced out of good housing markets, their quality of life suffers and they may even fall into poverty.

The troubling paradox is that unaffordable housing is far more common in markets like Vancouver and Toronto, which have embraced the planning orthodoxy — which is supposed to produce affordable housing. The same applies to international markets like Sydney, Auckland, London and San Francisco, where urban containment and unaffordable housing have gone hand in hand.

What’s the solution? Give up on urban containment and make more land available for housing. But wouldn’t that threaten the natural environment, as critics of Ontario’s recent attempt to allow development of a sliver of its greenbelt argued?

Not at all. It’s true that land under cultivation in Canada has been declining steadily over the years. But the culprit is improved agricultural productivity, not urban expansion. According to Statistics Canada, between 2001 and 2021, agricultural land shrank 53,000 square kilometres. That’s about equal to the land area of Nova Scotia. And it’s about triple all the area urbanized since European settlement began. Even in Ontario and B.C. where most of the severely unaffordable markets are concentrated, urban expansion from 2016 to 2021 took up less than one-quarter of the agricultural loss over that period. Urban expansion is not squeezing out agricultural land.

Given all this, what should we do about affordability? In my view, three things:

First, it’s essential to acknowledge that Canadians are already addressing the issue by relocating from pricier to more affordable regions. Housing is more affordable in the Atlantic and Prairie provinces and areas in Quebec east of Montreal. So it’s not surprising there is now a net influx of people to smaller, typically more affordable, locations. In the past five years, markets with populations exceeding 100,000 have collectively witnessed over 250,000 people moving to smaller markets.

Second, make more land available for development in increasingly unaffordable markets like B.C., southern Ontario, and the Montreal-Ottawa corridor. One way is with “housing opportunity enclaves” (HOEs), in which traditional, i.e., not high-density, housing regulations would apply, but essential environmental and safety regulations would. The aim would be to provide middle-income housing at the price-to-income ratios that were typical before urban containment came along and housing across the country was largely affordable.

Market-driven development would be ensured by relying on the private sector to provide housing, land, and infrastructure, a model that has been successful in Colorado and Texas. Current residents would maintain their property rights but could sell to private parties and First Nations for development.

HOEs would be situated far enough outside major centres to take advantage of low-priced land, prioritizing areas with the largest recent agricultural land reductions. Communities likely would resemble Waverly West in Winnipeg or The Woodlands in Houston, with ample housing space and yards for families with children.

These new communities would attract people working at least partly from home. Jobs would naturally follow, creating self-contained communities where most commutes occurred within the HOE. To ensure a competitive market and prevent land cost escalation, HOEs must have ample land available.

Third, public authorities should allocate an ample amount of suburban land to safeguard reasonable land values in the Prairie and Atlantic provinces, as well as in Quebec east of Montreal. This would allow currently more affordable markets such as Quebec City, Calgary, Edmonton, Winnipeg, Moncton and Halifax to accommodate interprovincial migrants without jeopardizing their affordability.

Provincial and local governments would need to monitor housing affordability multiples on at least a five-year cycle, and legislatures, land use authorities and city councils would have to allow enough low-cost land development to maintain price-to-income stability.

It’s not enough just to provide enough building lots to meet projected demand. The goal should be to enable builders to provide housing at prices middle-income households can afford. The key to that is affordable land.

Wendell Cox is a Senior Fellow at the Frontier Centre for Public Policy. He is the author of 2023 Edition Of Demographia Housing Affordability In Canada and has been featured on Leaders on the Frontier – Cost of Living Under Crisis With Charles Blain.

2025 Federal Election

The “Hardhat Vote” Has Embraced Pierre Poilievre

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David Krayden's avatar David Krayden

Blue collar and unionized workers are supporting Pierre Poilievre and the CPC

When President Richard Nixon won a landslide in his 1972 reelection, he did so by broadening his own personal popularity and the appeal of the Republican Party to blue collar and unionized workers. It was called the hardhat vote and many working people embraced Nixon because he seemed to be talking the same language as they were. Nixon talked about law and order and getting tough on crime; safer streets and harsher penalties for serious crime. Although unionized workers had traditionally voted for the Democratic Party and seen the Republicans as the party of the wealthy, by 1972 the Democrats had moved far to the left on social issues and were completely out of touch with average Americans who saw Democratic presidential nominee Sen. George McGovern as being soft on crime and approving of the anarchy on the streets.

It’s precisely the language that Conservative Party of Canada leader Pierre Poilievere is speaking in the 2025 federal election. As support for the New Democratic Party has collapsed throughout the election campaign, don’t think most of it is going to the Liberal Party. Poilievre has been targeting blue collar workers for years with his emphasis on the trades and talking about middle class tax cuts and safe streets. A factory or construction worker is middle class and just want an affordable lifestyle for their families. They don’t have a lot of time for the woke underbelly of the Liberals or the NDP and are increasingly reluctant to support either party because both have appealed to elites.

Listen to Karl Lovett, the president of the Local 773 of the International Brotherhood of Electrical Workers, talk about Carney corruption and why he is supporting Poilievre and the CPC in 2025.

“Mark Carney also failed to pay $5 billion in Canadian taxes by hiding his company’s assets in Bermuda above a bike shop. Hard to believe that information comes from Canada’s NDP, or at least who is left of them, because the irony is, Mark Carney has eaten all those people alive. Even the mayor of Lima has warned Canadians not to vote for Mark Carney, and why for ripping him off the poorest of the poor people in Peru. That’s who he ripped off,” Lovett said.

“Listen, there are countless other outrageous examples proving that Mark Carney doesn’t give a damn about the Canadian working man. And now, as prime minister, which he’s not, Carney is promising to put carbon tax and tariff on the auto industry. It’s another rip-off screen that’s right. We’re getting punched by Trump on one side of the border, and Carney plans to punch us on this side of the border, also pretending it’s all about climate change, and now he’s made millions off the workers’ backs. He wants more than money. He wants more power. He wants all of the power to do whatever he wants to do. Mark Carney cannot be trusted with this power. Mark Carney cannot be trusted to protect workers,” Lovett continued.

The union leader told a cheering crowd that “Mark Carney is in it for himself, and when he loses this election, you can bet Mark Carney is going to leave Canada in a New York minute. But there’s hope, there’s hope, there’s our last hope. His name is Pierre Poilievere – the .only hope for Canadian workers. You see Mark Carney fooled Justin Trudeau. We can’t let him keep fooling us.”

“Local 773, which I represent, knows Pierre Poilievre very well. We can proudly tell you that Pierre has our back. Pierre has been putting Canadian people to work and Canadian workers. First, local 773 began working with Pierre Poilievre, the Conservative Member of Parliament Chris Lewis, some years ago, when it became all too clear that the Liberal Party had zero interest in helping out workers. Upon winning the leadership of the party, Pierre made Local 773 his very first priority, he came to my union hall. Pier made the Local 773 Visitor Training Center, and he met all our workers, and he made a pledge to me; he’s not going to turn his back on us, and I believe him,” Lovett said.

Toronto Sun columnist Joe Warmington agreed with me and you can hear that entire interview, below. “Labor wants to work, and they want to, you know, build things, and they want those good, paying jobs, and that’s what Poilievre has always been about, you know.”

“He wants more power. He wants all of the power to do whatever he wants to do. Mark Carney cannot be trusted with this power. Mark Carney cannot be trusted to protect workers,”

“Again, it’s hard to know, but I always felt … and I still think that Poilievre is going to pull this off because of these reasons that you’ve raised today, I never really bought into and again, I’m just one person’s opinion, and I go on the ground. In the air, the polls are saying, I know there’s this main street poll today, maybe it’ll swing differently. But in the air, it says one thing, and on the ground, it says another thing. And that clip you just showed, that’s the ground, that’s where the workers are, that’s where the families are.”

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2025 Federal Election

Poilievre will cancel Mark Carney’s new Liberal packaging law and scrap the Liberal plastic ban!

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From Conservative Party Communications

Conservative Leader Pierre Poilievre promised today that a new Conservative government will stop Mark Carney’s proposed Liberal food tax and scrap the existing Liberal plastic ban. Poilievre will:

  • Stop proposed new labelling and packaging requirements that will raise the cost of fresh produce by as much as 34% and cost the average Canadian household an additional $400 each year.
  • Scrap the Liberal plastics ban, including the ban on straws, grocery bags, food containers and cutlery, and other single-use plastics, letting consumers and businesses choose what works for them.
  • Protect restaurants, grocers, and low-income Canadians from one-size-fits-all packaging rules that disproportionately affect those who can least afford it.

“After the Lost Liberal Decade, many Canadians can barely afford to put food on the table. And now Mark Carney and the Liberals want to make it even harder with a new food packaging law that will raise the price of food–again,” said Poilievre. “A new Conservative government will keep food prices down by scrapping the Liberal plastic ban and stopping Carney’s new Liberal food tax.”

After a decade of out-of-control spending and massive tax increases, families are spending $800 more on food this year than they did in 2024, and food banks had to handle a record two million visits in a single month. In Montreal, 44 percent of CEGEP students are experiencing some form of food insecurity, while places like HawkesburyKingstonToronto and Mississauga have all declared food insecurity emergencies.

And food prices are still rocketing upwards, surging by 3.2% over the last year, with no end in sight. In the last month alone, food inflation increased by 1.9 percentage points—the largest monthly jump in food prices in decades.

As if this wasn’t bad enough, Liberals have made life even more expensive and inconvenient for Canadians by banning plastics – including everything from straws to bags to food packaging. The current Liberal ban on single-use plastics will cost Canadians $1.3 billion dollars over the next decade.

Now Mark Carney wants to make it worse by adding complicated and costly new food packaging rules that will drive up the price of food even more–in effect, a new Liberal food tax. Plastic food packaging makes up 1/3 of all plastic packaging in Canada. The proposed Liberal food tax will cost the average Canadian household an additional $400 each year, waste half a million tonnes of food, decrease access to imported fruit and produce, and increase food inflation. The Chemistry Industry Association of Canada has also warned that this tax will put up to 60,000 Canadians out of work.

“The Liberals’ ideological crusade against convenience has already driven up food prices and the last thing Canadians need is Mark Carney’s new food tax added directly to your grocery bill,” said Poilievre. “The choice for Canadians is clear, a fourth Liberal term that will make food even more expensive or a new Conservative government that will axe the food tax and bring back straws, grocery bags and other items, to make life more affordable and convenient for Canadians – For a Change.”

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