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Speaking Notes for Romy Bowers, President and Chief Executive Officer, Canada Mortgage and Housing Corporation
Cambridge, Ontario
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It’s been an interesting and challenging year for the housing sector since the last Northwind forum.
I think you’ll all appreciate that that’s a bit of an understatement.
Indeed, the state of housing in Canada has emerged as one of the defining issues of our present moment — as we emerge from the pandemic and start to rebuild our lives and economy.
Our research has found that to reach affordability by 2030, Canada will need to build an extra 3.5 million homes, beyond what we’re already on track to produce.
That is to say, supply is failing to meet demand, and has been for some time.
That might sound simplistic, especially to an expert audience like this, but it really isn’t.
For example, there are others who call for a focus on demand-side measures instead of supply-side. And if you do focus on supply, there’s the question of what type of supply.
We’re often pulled in a lot of directions in terms of the type of supply — whether we need more single-family, detached houses; more rental houses; more community or social housing; or more shelter spaces.
Our researchers have found, again, that the answer is all of the above. We need more housing across the board.
We need it across the board because housing exists on a continuum. If there’s upward price pressure on any one part of the continuum — say, in market-supplied rental housing — that brings prices up everywhere else. It either pushes people to pursue entry-level ownership when it’s a stretch for their finances, or else it forces folks in subsidized rental housing to stay there instead of moving to the market.
The result is the same: higher prices in any one spot on the continuum are contagious.
Ultimately, the key to restoring affordability is creating more homes to buy and rent, across all price points.
So we need to incentivize new construction. But while we’re doing that, we also need to find ways to improve how we do it.
There’s going to be a session later today about barriers to new housing supply and how we can overcome them with innovation. I think that’s going to be a fascinating discussion, partly because it’s going to be — it has to be — a big focus for the housing sector if we’re going to make housing affordable again.
We also need to focus on partnership. We simply can’t achieve any of our goals alone.
Building a better, fairer housing system in Canada will require an all-hands-on-deck approach. We all need to put on our Team Canada hats and find new ways to work together across the housing system — across all orders of government, Indigenous communities, the non-profit and private sectors.
And we need to leverage our strengths.
As a federal government agency, CMHC’s strength lies in guiding, facilitating and supporting other actors.
With our industry-leading research we can identify gaps, trends and opportunities.
And we can incentivize people to act, either through policy and procedure changes or through direct financial support.
We recently announced an example of this in action. The Housing Accelerator Fund is a $4-billion-dollar program that encourages municipal governments to improve processes and cut red tape to get more homes built faster. It is targeting the creation of 100,000 new homes across the country, but the procedural improvements it supports are expected to continue paying dividends long after the program is finished.
This is an example of governments working together to get shovels in the ground.
The Fund is part of the federal National Housing Strategy, which has grown to a more than $82-billion-dollar plan, thanks in part to major commitments in last year’s budget. Budget 2023 builds on this momentum.
But we also recognize that the government — all governments — can’t program their way out of this situation. We need to harness the energy of the non-profit and private sectors as well.
The financial sector has already taken major steps to help. In the past two years, the Bank of Montreal, Scotiabank and Vancity Community Investment Bank have collectively committed more than $22 billion dollars in sustainable finance funding to support affordable housing over the next decade.
There is a real value proposition here.
Supporting affordable housing in Canada aligns with ESG and Corporate Social Responsibility goals. It’s a chance for a company to show itself as a good corporate citizen.
But you know as well as I do that it’s not just show. Investing in housing is investing in a better, more stable and more prosperous country. It’s investing in the future. It’s investing in people.
So I thank Northwind for organizing this forum. And I thank you all for joining us. This is an important conversation for Canada to have, and I’m glad we’re all here for it.
