Canada is struggling with an unprecedented housing crisis. The most recent estimate by the Canada Mortgage and Housing Corporation informs us that, “Canada needs about 3.5 million additional housing units by 2030 to restore affordability.” In other words, three times the current rate of housing construction is needed to meet Canada’s affordability target by 2030. At the current rate of progress, the crisis is not about to end soon.
What role should the federal government play in this crisis? Putting more money into taxpayers’ pockets is not a panacea. In fact, that approach could fuel inflation in the housing sector. Neither grant programs, tax incentives, micro steps, nor postwar-era project revivals are enough. We need to stimulate innovation in the housing sector and address labour shortages, a major challenge in the construction sector. The innovation in question must be economic, technological, and administrative, but also social, given the many stakeholders involved.
Canada’s response to the housing crisis requires a contribution by multiple stakeholders accountable to different jurisdictions, as well as a multi-faceted strategy. A roadmap cannot be developed in a vacuum, in ministerial back rooms. A standing roundtable made up of stakeholder groups and provincial representatives is the only answer. The federal government must take the lead in establishing this kind of consensus-building forum. So far, it seems that no minister or agency has been assigned such a mandate.
The construction sector’s labour shortage is an undeniable problem. It may also be the best place to start since it takes a workforce to build housing. Money is not the only issue. Recruiting workers and developing their skills takes time. Attracting and retaining a new workforce in trades confronting a labour shortage has become a colossal challenge because the problem is not limited to the trades alone. Training centres are also struggling to recruit instructors. It is also becoming increasingly difficult to find and to spare the journeymen needed to support apprentices.
What can the Government of Canada do? First of all, the sector needs a permanent consultative institution involving the provinces and other economic stakeholders. Institutions like this exist in a number of other countries. Why not create one in Canada?
The Employment Insurance program—which the contributions of workers and companies fund to the tune of more than $27-billion—remains a pivotal force in Canada’s human resource management, especially in seasonal employment sectors like construction. Employment Insurance also plays a key role in funding workforce training and apprentice income support. Why then, in Canada, does Employment Insurance fall entirely under the political control of government? When it was introduced through a constitutional amendment in 1940, there was a clear understanding that the program’s effectiveness depended on the involvement of employee and business representatives.
Large business and labour associations unanimously support the idea of creating an advisory council within the Canada Employment Insurance Commission precisely to ensure that the program better serves the needs of today’s workforce and adapts to current and future imperatives.
Collaboration between governments and stakeholders is an important collective tool that the federal government needs to establish and support. Collaboration leads to the identification and implementation of best practices, and serves as an effective instrument for non-inflationary economic growth. If the federal government’s intervention is strictly limited to financially supporting basic needs, such as housing, its policy could become an exercise in futility.
Diane Bellemare is a Quebec Senator, a member of the Progressive Senate Group, and an economist.
This article was originally published in The Hill Times