HOUSING

Housing affordability became a campaign topic against the backdrop of a real estate frenzy, but the problem has been building for years. The key issue is supply: Not enough homes are being built to keep pace with population growth, especially in major cities such as Toronto and Vancouver. Jean-François Perrault, the chief economist with Bank of Nova Scotia, estimates Canada has the lowest number of housing units for every 1,000 residents of any Group of Seven country.

The federal government has few direct levers to deal with the supply problem, as most land-use and development decisions rest with municipalities and provinces. It can, however, encourage lower levels of government to speed up construction by tying federal funds to housing densification and pro-construction land-use policies.

Demand-side interventions are more controversial. Various parties proposed putting more money in the hands of first-time homebuyers and reducing their monthly mortgage and insurance costs. Housing market experts say these plans are counterproductive: Measures that make it easier to take on debt will fuel the run-up in prices and counteract regulatory interventions, such as stricter mortgage stress tests. As Evan Siddall, the former head of Canada Mortgage and Housing Corp., remarked on Twitter: “It may be good politics but it’s irresponsible policy.” – MARK RENDELL