Western Standard - Will the Build Canada Homes initiative help Canada's housing crisis？

00:00:00.000 Hello, everyone. My name is Leah Mashett. I am a reporter here at the Western Standard,

00:00:14.240 and today I have a guest named Austin Thompson. He's a senior analyst at the Fraser Institute,

00:00:19.680 specializing in municipal studies. He also writes a lot about the infrastructure projects going on

00:00:26.520 in Canada. So I was going to ask him about that today. He's written quite a few articles on the

00:00:32.960 subject. So Austin, thank you again for joining us today. Good morning, Leah. Pleasure to be here.

00:00:39.480 Good morning. Thank you very much. Okay. So basically, the first thing I wanted to talk

00:00:45.640 about is the Build Canada Homes Initiative, which has been dedicated, $13 billion has been dedicated to

00:00:53.760 the initiative. And you wrote in a recent article that basically the budget had kind of diagnosed

00:01:03.360 the issue of infrastructure housing building in Canada, but did not come up with the correct

00:01:08.560 solution. So why don't you elaborate a little bit on that and tell us why they didn't come

00:01:13.200 up with the right solution and what the right solution would be? Yeah, you know, I thought it

00:01:18.480 was interesting in this latest federal budget. They have a small section that lays out the narrative

00:01:23.120 of kind of what's gone wrong in Canadian housing. And they list a number of things that I think are

00:01:27.440 really the right things. They talked about regulations and red tape at the municipal level

00:01:32.480 that make it harder for home builders to be able to build the sorts of homes that Canadians demand.

00:01:37.760 They talked about high taxes on new houses. And yet the Build Canada Homes Initiative, which is,

00:01:43.440 you know, one of the major new spending initiatives on housing by the federal government,

00:01:47.600 is not really related to those issues in particular. The federal government is taking on a role that

00:01:54.080 hasn't in a long time in order to be a developer and financer of major housing projects. And I just

00:02:01.200 don't think that's what's needed at this point. There's plenty of demand for housing. There's lots of

00:02:06.240 nonprofit and for-profit private housing developers who would be building more homes were it not for the

00:02:11.600 tax and regulatory burden. We don't need a federal agency in Ottawa to be, you know, nudging its way

00:02:17.680 into this market and competing with the private home builders for, you know, scarce investment dollars,

00:02:23.760 scarce construction labor. It's just, it's not so needed at this point.

00:02:30.080 Okay, so I want like viewers to get a really good sense of like, what the issue is here. So why don't we,

00:02:38.560 if you don't mind, why don't you outline exactly what, I guess, the Build Canada Homes

00:02:46.560 in the budget said was the issue, like the diagnosis, just to begin with. And then, yeah, we go from there.

00:02:54.880 Sure, of course. Yeah. So, you know, I think the issue in Canadian housing, which was, you know,

00:03:00.320 reflected in the budget is that, you know, it's difficult for private home builders to build the

00:03:04.640 homes that Canadians want. You know, in many cases, home builders face restrictions on how high or how

00:03:12.400 dense of housing they can build. There are plenty of taxes imposed on new housing projects by

00:03:19.920 municipalities, but also provincial and federal taxes. And these, you know, issues conspire to make

00:03:26.800 it such that, you know, new homes are expensive to build and some projects that would otherwise be

00:03:32.720 viable or not viable. And so we end up with less housing than we need. And that's just a problem

00:03:38.240 for which Build Canada Homes doesn't offer a solution. They're working on a different track

00:03:43.280 that's saying, well, what if the federal government, you know, entered into the housing market as a

00:03:48.160 housing financier and a housing builder? And it's not obvious that that's what's missing.

00:03:52.400 Hmm. Since you've read a lot on the subject, is there any examples of something like this happening

00:04:00.400 in like a different country that you would know and that it didn't work out or, yeah,

00:04:04.560 it didn't go as planned, like a government wanted it to?

00:04:07.920 Yeah. So, you know, in other places, governments get involved in housing, you know, more regularly,

00:04:14.960 even in Canada, you know, at the provincial level, there is lots of housing, but it's typically

00:04:19.520 constricted to a certain class of housing. You know, there are housing needs that people have

00:04:25.600 that are difficult to meet sometimes in the private market if they have, say, a history of homelessness,

00:04:32.480 of mental illnesses, of addiction, you know, people who need special services. And that's a little bit

00:04:39.520 of what Build Canada Homes claims to be targeting, you know, that they say that they're going to enter

00:04:44.000 into the affordable housing space and try and accelerate projects there. But as always, you

00:04:50.240 know, Ottawa has a hard time keeping it scope limited. And so, you know, they've gone on to say,

00:04:54.720 well, we're also going to build affordable homes for the middle class. And that's somewhat atypical,

00:05:01.120 at least in the Canadian context, it's not typical for the government to be building homes for a class

00:05:06.880 of people who should in theory be able to afford their own home and would in fact have more housing

00:05:12.000 options available at a price they could afford if it weren't for the restrictions and taxes

00:05:16.880 already imposed on private housing. And so we end up with this kind of bad trade where, you know,

00:05:21.760 Ottawa is going to insert itself into this space. It's going to spend a lot of money on the projects

00:05:27.840 that it thinks are worthwhile. And that will take away investment dollars and scarce construction

00:05:34.720 resources from private projects that are otherwise driven by what Canadians want and what private

00:05:40.320 developers can build at the most affordable price point. And so, you know, the real challenge here

00:05:46.480 is that, you know, the federal government may in fact build a number of homes, you know, affordable

00:05:51.760 housing projects. And I'm sure we'll get many news releases to say, you know, we supported X number

00:05:55.920 of homes in this city and Y number of homes in that city. But what Canadians won't be seeing is that

00:06:01.600 those projects took away construction workers and materials that could have otherwise been,

00:06:06.080 you know, used in private secure housing developments. And so we get this trade-off where we get more

00:06:11.040 of the housing that Ottawa wants, but less of the housing that regular Canadians want.

00:06:14.240 Mm-hmm. And okay, this kind of related. In your most recent article, you were talking about how civil

00:06:22.080 servants running the Build Canada Homes project are basically, yeah, not listening to like what private,

00:06:30.160 private, sorry, private, oh, like home builders and stuff would be like wanting to do and how they

00:06:37.120 want to develop. So why do you think they, well, at least from my understanding, it doesn't seem like

00:06:42.800 they got the expertise of these types of people. So why don't you think they're listening to the

00:06:48.320 average Canadian and maybe like experts who would know more about the housing market?

00:06:52.720 Yeah. So it's a really fundamental issue, right? One pillar we haven't discussed really of Build

00:06:59.120 Canada Homes, that's a somewhat separate stream that they're working on is, for example, that they

00:07:04.400 want to make a big investment in factory built modular homes. And that's, you know, that sounds

00:07:10.720 interesting. Maybe there are some advantages to building homes offsite and taking them there. But the

00:07:16.480 reality is that there are many large, sophisticated private home builders in Canada who already use

00:07:22.800 these techniques. The difference is that when the private sector uses these techniques, they only do

00:07:27.440 so when it's the most affordable way to produce the housing that Canadians actually want to build.

00:07:32.720 When the government steps in and says, well, actually, you know, we think for reasons that we

00:07:38.480 haven't communicated well to Canadians that we're not building enough factory modular homes. They're saying,

00:07:44.400 in essence, you know, I know better than the private housing developers, which housing

00:07:48.080 technology will be the better one. And this is just the latest in a, you know, a stream of examples

00:07:53.280 where Ottawa makes these big bets in the private market. We've seen them in electric vehicles. We've

00:07:59.200 seen them with battery plants where they say, you know, people in Ottawa have discovered what the next

00:08:03.840 big thing is, and we are going to take Canadians tax dollars and invest it in this new program.

00:08:10.400 And it's just, you know, a strange credulity to think that those people in Ottawa know better than

00:08:15.840 the people who actually work in these industries every day, who are doing, you know, the difficult

00:08:20.320 work of, you know, private housing developers constantly in a relationship with its customers.

00:08:26.640 It needs to know for its very survival, what do Canadians want and how is the most effective and,

00:08:32.080 you know, cheap way to produce what Canadians want. And that's just not the set of incentives that

00:08:38.080 people in Ottawa have. You know, the bureaucrats who will run Build Canada Homes are not in the

00:08:44.160 position of a private housing developer. You know, if they make the wrong projects,

00:08:49.040 their company doesn't fail, they don't lose their jobs. And their priorities are not to

00:08:54.320 serve the ultimate customers, the Canadians who will be buying and living in those homes. They have a 0.57

00:08:59.600 whole complicated set of other incentives to make the Kearney government look good, to spend in

00:09:05.840 particular areas that sound good to Liberal government supporters. And that's just not the

00:09:11.040 sort of incentives we want, you know, getting into the housing market at a time when we're very

00:09:16.240 housing constrained. We don't have the construction labor or the resources to indulge the Kearney

00:09:23.280 government, you know, pursuing its own priorities in housing at a time when we need those resources to

00:09:28.880 be fully engaged in providing the market housing that Canadians really need.

00:09:32.240 So from my understanding, I feel like you're saying as well, that probably if we want to solve this

00:09:40.160 crisis, politicians or bureaucrats should be listening to these experts more.

00:09:45.760 Yeah, well, it's not even just listening to them more. You know, this is an area of housing policy that

00:09:55.040 the federal government does not need to involve itself in in the first place. You know, there are

00:10:00.000 things that Ottawa can do that affect housing markets, you know, the general fiscal and economic

00:10:06.800 conditions of the country make it, you know, easier or harder to invest in homes, the amount of take

00:10:13.120 home pay that Canadians can keep after they pay their federal taxes. It's directly related to how much

00:10:18.640 housing they can afford. These are the sorts of issues that that Ottawa ought to be focused on.

00:10:23.440 They do not need to be involved really in any sense in financing or developing or building homes.

00:10:32.240 You know, many other times in Canadian history, most of Canadian history, housing has been broadly

00:10:38.480 affordable and that affordable housing was provided almost entirely by the private sector.

00:10:43.520 And that happens when home builders are able to build homes without undue restrictions on the

00:10:50.720 types of homes and where they can be built. And when they're not hosed with, you know,

00:10:54.160 extraordinary taxes by all three levels of government.

00:10:58.560 Well, also, I kind of wanted to touch on one extra thing that was interesting that you did a bit of a

00:11:04.960 while ago, I think it was with another policy analyst, Jake Foss. And it was about, yes,

00:11:13.840 and it was about the real estate of the federal government. Because you because it was just when

00:11:21.200 the 3 billion was announced for the build Canada homes thing. And basically, you're saying they can't

00:11:28.800 manage their real estate. Why don't you tell us more on that?

00:11:31.920 So I thought this was a really interesting story, and very relevant as the Carnegie government tries

00:11:37.600 to pitch to Canadians that that it should be involved in the housing market. And, you know,

00:11:42.640 Ottawa should have a lot of say in the types of home that get built. You know, so the federal

00:11:48.320 government has its own office buildings for its workers. And a 2017 study by the federal government

00:11:54.560 itself discovered that 50% of that office space was being misused, unused, what was kind of just

00:12:01.760 sitting there. And so of course, that's a not very good finding. I think any private company that

00:12:07.760 discovered half of its real estate portfolio was being unused would would urgently try and solve the

00:12:12.480 problem. But it really demonstrates in the years that have followed since 2017, the difficulties that

00:12:19.280 Ottawa has accomplishing, you know, major complex projects in this space. So in 2017, they discover half the federal

00:12:25.840 office space is underused. It takes them two years to make a plan. How are we going to, you know, dispose

00:12:32.480 of, sell, lease, get rid of this unused office space? And then four or five years on, by budget 2024,

00:12:39.440 they have accomplished almost zero reductions in the unused office space. And budget 2024, they say,

00:12:45.200 okay, we have to get serious about this, we're going to set aside a billion dollars in order to sell off the

00:12:51.280 land we have to pay for the administrative costs, get things up to snuff, sell it off. And they say,

00:12:56.800 within 10 years, we'll have gotten rid of half of the federal office space, we'll have gotten rid of

00:13:02.720 all of that space that was reduced. And a year later, the department that was put in charge of the project

00:13:08.240 said, well, actually, we won't be able to get rid of all of that office space in 10 years, we'll only be

00:13:12.720 able to get rid of 33% instead of 50%. And the Auditor General did an interesting report on this failing,

00:13:20.800 and discovered just a lot of really essential issues. You know, the federal government didn't

00:13:24.480 have basic information about its own office space, it regularly missed its own targets for office

00:13:30.240 space reductions. And it was unable to get buy in from its own departments to say, you know,

00:13:37.120 hey, departments X, we know you have office space you're not using, could you please reduce it?

00:13:42.320 And the departments, in some cases, just did not reduce the office space, even though it was being

00:13:47.600 wasted. And so I think this is just emblematic of the way in which government runs differently than

00:13:52.800 a private business. There are competing interests within government, there are instances where even

00:14:00.480 when there is a clear goal, not everyone can align to achieve it. And this is the sorts of conditions

00:14:08.720 that Build Canada Homes will operate under as well. Build Canada Homes has a really ambitious,

00:14:15.680 lofty sounding goal of working across all government departments, with provincial governments,

00:14:20.880 with municipalities, with indigenous governments, in order to develop these homes. And I think Canadians

00:14:26.240 should look at the experience that Ottawa has had with its own real estate portfolio, and just ask,

00:14:31.360 you know, a fairly simple question of what is the evidence that, you know, this system can deliver

00:14:37.280 on such a complex project involving so many different players?

00:14:41.520 Hmm. I think that's a great question for them to ask. And I think this is a great place to stop,

00:14:47.840 because now they can reflect. So thank you very much, Austin. I appreciate it a lot for you coming on.

00:14:53.360 Perfect. Thank you so much, Leah. Thank you. Okay, well, if you guys are enjoyed this video,

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00:15:14.000 $10 a month and $100 a year. So that's $10 off. So might as well. Yeah, so thank you, everyone. And goodbye.

00:15:23.360 I'll see you next time.

00:15:28.160 I'll see you next time.

00:15:30.160 I'll see you next time.

00:15:32.160 Bye.

Western Standard - November 24, 2025

Will the Build Canada Homes initiative help Canada's housing crisis？

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