Government housing policies are killing the Canadian dream

Canada’s housing crisis wasn’t inevitable. It was built one government decision at a time

It is tempting to view Canada’s housing crisis as the inevitable result of population growth, immigration, global investment and higher interest rates. Those factors matter but do not explain why some Canadian cities remain comparatively affordable while others have become among the least affordable in the world.

The latest Demographia International Housing Affordability Index, authored by Frontier Senior Fellow Wendell Cox, compares 96 markets across eight nations using the relationship between median household income and median house prices. It finds Vancouver and Toronto severely unaffordable, less affordable than comparable American and British markets. Yet Edmonton, despite strong population growth and a healthy economy, remains considerably more affordable than Canada’s largest metropolitan areas.

These cities operate under the same national economy, the same monetary policy and many of the same financial pressures. What differs most is public policy. If policy choices helped create today’s affordability gap, different policy choices can begin to close it. The root cause is not mysterious: too little land is released for housing, and until that changes, affordability will keep worsening.

For generations, home ownership stood at the centre of the Canadian dream: the belief that ordinary people, through hard work and personal responsibility, could build a better life than the one they inherited. It meant putting down roots, building financial security and raising children in stable communities. Yet across much of Canada, young adults who pursued an education, built careers and saved responsibly are now asking a question that would have seemed unthinkable a generation ago: Will I ever own a home?

That should concern every Canadian, not simply because housing has become expensive, but because home ownership has long been one of the principal ways Canadians turn hard work into opportunity. When that pathway disappears, Canadians begin to ask whether the promise that built this country is disappearing with it.

Over several decades, governments at every level have steadily restricted the supply of developable land while adding planning requirements, environmental reviews, development charges, permitting delays and complex regulations. Individually, many of these measures were introduced for understandable reasons. Collectively, they have made it slower and more expensive to build new homes.

The economics are straightforward. Restrict the supply of land and its value rises. Extend development approvals from months into years and costs rise again. Add tens of thousands of dollars in regulatory costs to every new home and those costs inevitably reach the buyer.

Canada is the second-largest country on Earth. We are not running out of land. We are running short of land made available for housing. This is not an argument against environmental stewardship or thoughtful planning. Good planning protects the environment while ensuring families can still build a future of their own.

Edmonton demonstrates that better policy can produce better outcomes. The city has worked to shorten approval times, increase housing supply and remove barriers that unnecessarily delay construction. No city has solved every housing challenge, but Edmonton shows that shorter approval timelines and greater housing supply can improve affordability.

Housing affordability reflects thousands of policy decisions, and those decisions can be revisited. Regulations can be modernized, approval processes streamlined and more land brought into development. Governments cannot control every market force, but they can remove many of the obstacles they have created.

When a young family loses the opportunity to buy its first home, Canada loses more than just another prospective homeowner. It loses confidence in the future. Home ownership has been the ladder into the middle class; as it slips away, that middle class is being hollowed out. The consequences are already visible: young adults postpone marriage and children, skilled workers look elsewhere, and employers struggle to attract talent. No country can flourish if an entire generation concludes that hard work no longer leads to opportunity. Trust in institutions erodes, and the optimism that has defined Canada for generations gradually gives way to resignation.

Canada has faced difficult policy challenges before, and history suggests we solve them best when we confront them honestly rather than accepting them as inevitable. Housing should be no different.

The Canadian dream has never been about guaranteeing success. It has always been about preserving the opportunity to succeed. That opportunity depends on strong families, good education, rewarding work and responsible government. But it also depends on something tangible: the ability of ordinary Canadians to own a home.

Restoring home ownership must once again become a national priority. Housing policy is not simply about building more homes. It is about preserving one of the foundations on which Canadians have built their lives for generations.

What is required now is the political courage to remove unnecessary barriers to new housing, challenge assumptions that no longer serve the public interest and restore affordability as a central objective of housing policy.

David Leis is the President and CEO of the Frontier Centre for Public Policy and host of the Leaders on the Frontier podcast. A seasoned commentator on Canadian public policy, he focuses on restoring accountability, economic common sense, and civic health to the country’s national, provincial and municipal institutions.