Poilievre plans ignore housing realities

Opinion

Hey there, time traveller!
This article was published 21/12/2024 (271 days ago), so information in it may no longer be current.

Two weeks ago, I wrote about some of the things that Conservative Leader Pierre Poilievre has been saying lately. As part of that discussion, I referred to his false claim that municipal governments “are bursting with cash, and they’re wasting it all,” and his description of local leaders as “greedy, money-hungry municipal politicians.”

Poilievre was at it again this week. In comments to a Thunder Bay media outlet, he re-confirmed his plan to get rid of the federal government’s Housing Accelerator Fund if he’s elected prime minister in the next federal election.

The $4-billion fund, introduced in 2022, was created by the Trudeau government to help communities speed up housing and apartment construction. An additional $400 million was added to the program in April of this year. All of that money has helped to fund the construction of thousands of single- and multi-family housing projects across the country.

When challenged with the fact that communities such as Thunder Bay have been hitting their new-housing targets thanks to the Accelerator Fund, Poilievre gave a lengthy response that included this passage: “What we’ve seen is the more money you give to municipal governments, the worse the housing crisis becomes. What do they do with it? They hire more bureaucrats. And what do those bureaucrats do? They block home building.”

That’s not happening in Thunder Bay, and it’s not happening here in Brandon, either.

In the past year, Brandon City Council has signed on to the Housing Accelerator Fund program, and millions of federal dollars have been earmarked for new housing in the city. In order to satisfy the conditions of that funding, the city has also loosened zoning rules, creating the opportunity for the construction of multi-unit homes (up to four-plexes) in most areas of the city. That step will increase density and make housing more affordable.

The city has also borrowed millions of dollars to pay for two new wastewater lift stations, opening up the southwest corner of the city to a massive housing development, along with the construction of several large commercial properties.

Beyond that, the city is also in the process of revising its development cost charge program. By doing so, it will avoid incurring many of the large infrastructure costs associated with new developments. Doing that will also make home ownership more affordable, by helping to avoid unnecessary property tax increases.

Despite the progress that is being made in new home construction across the country, Poilievre told the Thunder Bay reporter that “The reason we have the fewest homes per capita in the G7, even though we have by far the most land to build on, is because government bureaucrats tax and block new home building.”

That’s also not true. Cities like Brandon are loosening their zoning rules to allow for more construction, not less.

The Tory leader claims that “delays and zoning” drive up the cost of new housing, but do we really want a situation where anybody can build whatever they want in any area of the city? Do we really want people building low-quality, multi-storey buildings in predominantly single-family neighbourhoods, without any oversight or approval by the city planning department?

Do we really want to get rid of building safety and design standards that protect Brandonites and the investment they have made in their homes?

Poilievre says his government will provide “powerful” incentives for municipalities to speed up the permit process, free up land and cut development cost charges to clear the way for developers to build more housing units. In past interviews, however, he has said that those “incentives” will take the form of threats to cut off federal funding for items such as public transportation.

As an alternative to the Housing Accelerator Fund, Poilievre promises to remove the GST on the purchase of new homes under $1 million. He says, “I will take the money away from the bureaucrats and the politicians that caused the problem — and they’re all going to squeal — they’re going to call and complain. But I’m going to use that money to cut the GST by fifty-grand a home.”

That may be his plan, but it won’t make new houses cheaper. He assumes the savings from the GST exemption will be passed on to purchasers, but that’s not what will happen.

It’s simple economics. Home builders will always sell their homes for the highest amount the market is able to pay. For example, if the market is willing to pay $1 million for a certain home in a certain neighbourhood, cutting the GST won’t lower the “all-in” price to $950,000. The price will still be $1 million, with the GST “savings” ending up in the home-builders’ pocket as extra profit.

That may incentivize home builders to build more homes, but it won’t reduce consumers’ housing and borrowing costs.

None of this information will change the reality that Poilievre is likely Canada’s next prime minister. What it might do, however, is give potential Conservative Party voters a clearer sense of what they are considering voting for.