The Canada Mortgage and Housing Corporation’s (CMHC) chief economist told a Senate committee meeting on national finance that he doesn’t know how many rental units will result from the removal of GST on construction.
“Whatever program that lowers costs I think will be helpful, but I don’t have a specific figure to give you, to say this will result in the creation of ‘x’ number of units,” Bob Dugan told the Senate national finance committee, according to Blacklock’s Reporter.
Pressed by Senator Clément Gignac, Mr. Dugan said it is too difficult to assess.
However, Mr. Dugan conceded that, should that target be attained in seven years, it still will not be enough to make housing affordable for all Canadians.
“It doesn’t take care of that part of the market that is most in need, the lower-income folks,” he said.
“The 3.5 million would still leave us in a position where we still have affordability challenges for certain target populations that are lower income, that are not as served by the market.”
However, the population boom is exacerbating demand in the country’s chronically undersupplied housing market, including in the rental sector.
“A lot of immigrants, when they first come to Canada, tend to settle in the rental market, and that can put particular pressure on the affordability of the rental market,” Mr. Dugan said, before adding, “The solution is supply. We need to build enough homes in order to keep housing affordable with this kind of immigration.”
But the rising cost of living in Canada could also disabuse immigrants of their decisions to move to Canada, warned Mr. Dugan.
“If we don’t do something about housing affordability, Canada’s ability to attract immigrants might decline down the road if they face such high housing costs when they arrive in the country,” he said.
