“Homelessness & Affordability Crisis”

Guy-Émile Beauparlant was born in Montreal but the family moved early and often throughout Quebec to wherever his father found construction work.

Beauparlant left school when he was of working age, embarking on a lifetime of menial jobs. Some he enjoyed, such as climbing trees to hand pick unblemished apples, or working outdoors on a dairy farm. Others he liked less, like roofing the expansive airplane hangars at the St-Hubert airport, or making insulation derived from shredded newspapers — hot, dusty work that clogged his respiratory passages and burnt his eyes.

Everyone in Canada will soon be able to afford a home. We just need investors to build more and rates to be cut, right? Anyone that can do basic math has probably been skeptical of that narrative and with good reason—even the people making those statements don’t believe it. Internal messages from the CMHC make very brief but important notes that challenge the exact narrative its leadership has been publicly spinning. More supply won’t bring down home prices, and lower rates won’t make them more affordable. Higher prices will make more supply feasible and lower rates will help boost prices.

In 2020, in the face of soaring house prices and increasing household debt, Canada’s largest mortgage insurer, Canada Mortgage and Housing Corp. (CMHC), changed its criteria to make it harder for people to qualify. CMHC did so by reducing the maximum allowable household debt-servicing levels and tightening the personal credit rating criteria.

In Canada, homebuyers with less than 20-per-cent down payment are required to get mortgage insurance to protect the lender in the event of a default. By making it harder for such homebuyers to get insurance, CMHC made it harder for them to qualify for mortgages.

At the edge of a east-end Hamilton park, Lisa Bartlett carefully wipes dirt off her belongings after heavy rainfall partially collapsed and flooded her tent.

Living in an encampment is hard, said Bartlett, 50.

It’s often uncomfortable and unsafe, she added.

She wears a whistle she around her neck and carries a can of hairspray to ward off anyone who seems dangerous.

“… The latest Nanos federal ballot tracking has the Conservatives now at 41.0 per cent, 15 points ahead of the Liberals at 25.7 per cent. The NDP, meanwhile, are sitting at 17.3 per cent, the Bloc at 8.9 per cent, the Green Party at 4.2 per cent and the Peoples Party at 2.6 per cent.

Nanos says it’s young people, who he called a swing-voting block, appear to be deserting the Liberal government.

“In 2015, Justin Trudeau built his majority around many enthusiastic and positively minded young people who were progressive,” he said. “Fast forward now, and those same young people have deserted the Liberals and are looking at the Conservatives probably because of the anxiety and frustration they are having with the rising cost of living and housing.”

Canadian real estate didn’t get a boost from a recent rate cut. That’s good news, according to BMO’s latest research note. The bank broke down CREA’s June update on existing home sales, and believes this is what the Bank of Canada (BoC) would like to see. Cheaper credit didn’t suddenly spark exuberant demand, potentially clearing the way for more rate cuts. However, BMO warns the data is driven by just one major factor—people fleeing the country’s largest markets, Toronto and Vancouver. This same trend is also helping to boost prices in traditionally affordable regions, creating a split market driven by the same issue.