Canada’s “work hard, buy a home, get ahead” formula doesn’t work anymore
Canada doesn’t work the way it used to.
A generation ago, Canada was a country in which you could get an affordable post-secondary education or graduate high school and start a stable job in the trades industry or elsewhere. Then, with some hard work and discipline around saving and a bit of patience, you could buy a home, build generational wealth, and put your children on a path to do even better than you did.
But this “work hard, buy a home, get ahead” formula doesn’t work the way it used to for anyone born after the mid-1980s or arriving in this country within the last decade or so. Moreover, as Canadians, we have been coming to understand that our country never worked the same way for everyone, with Indigenous and racialized Canadians often facing barriers unseen by those of us of European descent.
If we want a more equitable, prosperous future for this country we love, we need political leaders who can think beyond the old formula. We need politicians who will act boldly and purposefully to put new rules in place that reverse the ever-widening wealth and inequality gaps that have been accelerated and laid bare during this painful eighteen months of the COVID-19 pandemic.
Housing plays a central role in the equation for a more equitable and prosperous Canada. A good home can provide an environment from which individuals can dream and prosper — or one that suffocates hope and human potential. According to the 2016 census, one in ten Canadian households lives in a home that needs major repairs, is overcrowded, unaffordable or all the above. One in three young adults aged 20 to 34 is still living with their parents. Add to this the 38% increase in Canadian home prices since the start of the pandemic and there is no question that the “work hard, buy a home, get ahead” formula is lying in a heap by the side of the road.
So what’s to be done? What should voters be looking for in the housing platforms of our political parties?
A commitment to address housing supply. The number of housing units per thousand Canadians has been falling in recent years leaving Canada with the lowest per capita housing supply of any G8 country. How can this be given our richness in both land and resources like wood, aggregate, fossil fuels and energy? Moreover, it doesn’t help when so much of the new supply that has been built in recent years has been multi-rise condos too small for family living — or on the other end of the spectrum, new mega homes and vacation homes that only a fraction of the population can ever afford.
The old rules around housing density, build form, and approval processes are not working. This must change. And fast.
Don’t abandon homeownership. Unquestionably, a federal housing strategy must accelerate the production of affordable rental housing. In parallel, it must not abandon homeownership. For decades, federal policy successfully leveraged the power of homeownership to expand the middle class and enable households to build generational wealth. Multiple complex dynamics have led to an aberration of this proven formula.
Today, Canada is increasingly a country of those with great surpluses of personal wealth (much of it tied up in principal residences, cottages and ski chalets) and those who have neither adequate housing nor the opportunity to use that housing as a pathway to building wealth and financial independence. A full 68% of Canadians own their homes, but increasing numbers of Canadians have been left behind. In Toronto, the homeownership rate for Black households is only 25%. A 2020 KPMG study found that close to half of millennials have given up on ever owning a home — with the other half reporting that they were able to realize their dream of homeownership only as a result of help from parents. We must challenge our federal leaders to put in place targeted policies that won’t overheat the market and create more wealth for those who already have it while providing the next generation with reasonable avenues to get in the door on homeownership. First-time homebuyer tax breaks and cash incentives may sound great in a campaign pitch but run the risk of further inflating the housing market. This challenge requires new and innovative policies that address the structural inequities of the housing formula to create a fair and equitable playing field for all Canadians.
A capacity to collaborate between levels of government. Every level of government influences the shape of our housing landscape. This can give rise to unproductive finger-pointing and posturing around the source of the housing crisis that is undermining our nation. We will only succeed in changing course if we have political leaders who understand and are committed to the hard work of cross-government collaboration. A tall order, especially when this may also require crossing party lines, but vital to putting a new formula in place for housing and prosperity in this country.
This may be an election that no one wanted — but the stakes are high. The pandemic has accelerated a trajectory of wealth and housing inequality that is the opposite of the values we hold as Canadians. It’s on all of us to ask tough questions of the candidates vying for our votes and ensure our federal leadership has the courage to implement the difficult solutions and create a formula that enables all Canadians to thrive.
