Canada’s Housing Crisis
Canada is facing a housing crisis. We need to construct nearly 6 million affordable and accessible housing units by 2030 to meet rising demand. If we follow the business as usual, we will only construct one-third of what is required.
Forest Products Association of Canada (FPAC), the Canadian Wood Council (CWC), and our respective member companies stand ready to support the accelerated construction of affordable housing with harvested wood products and mass timber – products that provide essential environmental, social, and economic benefits. We present several opportunities for the federal government to leverage these benefits in support of Canadian communities in need of rapid housing solutions.
Canada is facing an unprecedented housing crisis exacerbated by the economic impacts of the COVID-19 pandemic, rising interest rates and development taxes, zoning limitations and NIMBYism, rapid immigration, along with an increasing need to make communities climate-resilient.
Today, one in five Canadians cannot access affordable housing while the average rental price has risen 10% since last year—challenges that disproportionately impact marginalized populations. Though the difficulties experienced by those seeking to live in urban areas are most salient in news media coverage, 24% of rural residents – many of whom are Indigenous – are unable to find affordable, quality rental housing, which is double the national average.
Our sector has first-hand experience of this issue and its impacts, with some forest sector companies forced to build their own residential units in rural and remote areas to ensure continuity of operations and some measure of stability for our sector’s labor force.
The National Housing Strategy notes that “affordable housing is a cornerstone of sustainable, inclusive communities and a Canadian economy where we can prosper and thrive.” Yet the Canadian Mortgage Housing Corporation (CMHC) estimates that beyond the 2.3 million housing units expected to be built between 2021-2030, Canada will need an additional 3.5 million more units to house Canadians affordably.
What’s more, the latest data shows that land acquisition and investment in residential construction has dropped significantly in 2023, which further slows down home construction. In the absence of effective solutions to this dearth of supply, along with the lack of skilled labor capacity, we cannot meet our affordable housing or climate targets by 2030.
A recent survey of 3,500 low-income renters in Canada found that 82% of participants view affordable housing as the primary concern they want the government to address. Housing affordability has emerged as a centerpiece of all mainstream political platforms. Following the Liberals’ caucus retreat in September 2023, the federal government announced it would remove the GST on the construction of new rental apartment buildings, a promise originating within the party’s 2015 election platform.
The retreat also precipitated some of the first funding dispersed through the Housing Accelerator Fund, intended to help municipalities build 100,000 new low-carbon and climate-resilient homes. The Liberals have launched the Rapid Housing Initiative, the Tax-Free First Home Savings Account, doubled for the First-Time Home Buyers’ Tax Credit, along with large injections into the Affordable Housing Innovation Fund and the Canada Mortgage Bond are geared towards rental housing projects.
There have been early signals that the government understands the inherent benefits of building with wood. On October 4, 2023, during a session of the Standing Committee on Transport, Infrastructure, and Communities, Minister of Housing Sean Fraser advocated that “It’s incumbent, I think, upon all of us to do everything we can to get creative to fight the climate crisis” and that wood construction “provides an opportunity to use cleaner building materials but also to sequester carbon in the final product.” Minister Fraser has also emphasized the importance of innovative tools and techniques to meet our housing needs, including the adoption of prefabricated or factory-built housing solutions.
Also Read: The Housing Crisis Response Act