加拿大住房危机走向何方：利率博弈、金融化困境与双重经济死结

Janet Jeganathan: Look, we've been talking about Canada's housing crisis for years. Governments have promised to build more homes and make housing more affordable and help people get into the market. But there still isn't nearly enough affordable housing in Ontario or across the country. According to reporting by Global News, Ontario has only achieved 58% of its 2025 housing target. So what's actually happening with the housing market right now, and are we making progress, or could things get even worse? I'm Janet Jeganathan. Welcome to The Rundown. A lot of people see a headline like this and don't know how it connects with their lives. But if you're looking to say buy or sell a house or rent an apartment, it could have a big impact. He is one of the country's leading experts on housing. The founding director of the Missing Middle Initiative. Mike, great to have you. How are you doing?

Mike: Thank you for having me. I'm glad to be here.

Janet Jeganathan: Now, before we talk about the influence of higher interest rates on buyers and builders, give us an overview right now of the market. What are we looking at?

Mike: Yeah. So I tend to look at the housing market in kind of three different buckets. The condo market is not doing well, particularly in Toronto and Vancouver. We've seen big price drops and buyers just not wanting to go in that market because they see further discounts. The rental market is we are seeing some rent drops, but we're still seeing a lot of activity, a lot of units being built. I think where we're starting to see the biggest bounce back is on single family homes. We've had a cut in HST, a full HST rebate. There's been some movement on development charges. So there you're seeing some activity. So it's a bit of a mixed bag. You have three different markets all operating at different levels.

Janet Jeganathan: All right. We'll talk a little bit about those policies a little later. Help me understand in layman terms if possible here. What's the connection between the Government of Canada bond yields and mortgage costs?

Mike: Well, bond yields and the interest rates set by the Bank of Canada basically acts as kind of an anchor around mortgage rates. So we can think of those mortgage rates being the bond yield plus a certain percentage, right. Because banks can kind of choose whether or not they buy those bonds or issue mortgages. So when we see three and five year bond yields go up, mortgage rates tend to go up along with it.

Janet Jeganathan: And what are we seeing right now with those yields.

Mike: We are seeing them. We are seeing them go up particularly on that kind of longer end. That 5 to 10 year middle band. And that's not unique to Canada. And in fact, our bonds are going up kind of less than in the United States and a lot of other OECD countries, but it's still it's still an increase. And that does make it harder for new home buyers. And as well, builders who, you know, have to take out construction loans to build new housing.

Janet Jeganathan: So who's taking the hit right now? If you're saying that these, you know, these rates are kind of not going in pace, I'm assuming banks here are taking a bit of a hit here.

Mike: Yeah. Well, we are seeing you know, there is a bit of a delay right now, but we are seeing banks start to raise those rates. And where they often take the hit is not so much in the interest rate, but just volume. You know, they are likely to make fewer loans either on the mortgage side or the construction side, just because it's more expensive. And like any, any, any other kind of price in the economy, when that price goes up, consumers and investors kind of go, well, you know what? That's a little rich for my blood.

Janet Jeganathan: Headline consumer price index inflation in August was about 3%. But Canada's economy also did well in the second quarter. Also about 3% 3.3%. Explain to us sort of the tightrope that the Bank of Canada is walking right now when it comes to interest rate decisions.

Mike: Well, it certainly means less demand, particularly for those single family homes that I mentioned earlier, because it's harder for families to to qualify for a mortgage. But even when it comes to things like purpose built rentals, it's higher construction loans. And even if the developer is getting a loan from the CMHC, the federal Canada Mortgage and Housing Corporation, that loan is usually based off of a bond yield. So if those bond yields go up, the federal government charges them more. And that point about uncertainty is so important that it's not just the kind of level now, but developers are kind of, you know, they might be making a plan to start a building a year or two from now and going, I don't know, I don't I don't know if we should do all of that effort because we might find ourselves a year or two from now. It's just not economical at these interest rates. So we are seeing a kind of pullback in, you know, even in kind of the proposal of new buildings, let alone the construction of them.

Janet Jeganathan: Is there a domino effect there for we've seen rental prices kind of come down a little bit with that. Are we going to see an uptick?

Mike: Yeah. Or at least we're going to see I think those rents go down slower than they otherwise would. Now we do have it takes a long time to build an apartment building. Often you're looking five, seven, ten years. So there's a lot of apartment units under construction that should be completed soon. That's going to put downward pressure. But, you know, as we start building fewer of these, we are we're not going to have that inventory. But that's going to be more of a sort of 2031, 2033 thing. And that's the challenge with particularly high rise apartments, that it does act as such a lag. And developers aren't just targeting the market for today, but they're trying to look at what the market's going to be 7 to 10 years from now and try and predict whether or not the unit makes sense.

Janet Jeganathan: Talking about sort of the balancing act that needs to be done here, headline consumer price index inflation in August was about 3%. But if you look at Canada's economy did well in the second quarter, almost up about 3%, 3.3%. Explain to us a little bit of the tightrope that the Bank of Canada has to do, and sort of looking at interest rate decisions, because I think anyone who's on a variable rate at the moment is just looking and just watching. Tell me a little bit about that balancing act.

Mike: Yeah. So we're suffering what's called a supply shock right now. And it's when kind of input prices start to go up, like the price of diesel fuel we've seen gone up a lot. And those are very difficult for the Bank of Canada to manage that. Usually most of our shocks are on the demand side. And when you have a what's called a negative demand shock, that's consumer spending less the economy gets worse. We tend to see both the economy and inflation pull back. So they're kind of correlated that way. If the economy is doing well, they both go up. So it makes it easy for the Bank of Canada to make a decision. The economy does bad. Inflation is going low. They get stimulative. They lower interest rates. If everything's kind of overheating, they raise interest rates. But right now we have the situation where we've got inflation going up, which should suggest that we cut interest rates. But we have the economy not doing all that well. That's suggesting we should cut interest rates. So we have this tension that we don't normally see in monetary policy. It's tough to know what the Bank of Canada will do next. We saw last week the Federal Reserve raise interest rates by 25 basis points, which the president obviously wasn't a fan of going into into the midterm elections. We may see Canada follow by by the end of the year.

Janet Jeganathan: All right. Let's talk about some of the policies you had mentioned. There was both on the federal side and Ontario. One about an HST rebate that would look at probably $130,000 back in people's pockets, and also a deal to lower development fees if municipalities get on board with lowering their development fees, they would essentially get to some some money to infrastructure projects as well. What impact have those had on housing so far?

Mike: The HST one has been transformative that we have seen a lot of activity in showrooms and in part because it is it is a 100% rebate, but it for homes up to about $1 million. But it is time limited. You have to purchase a home by March of 2027. So it's not just creating new demand, but it's kind of pulling forward some demand. People are trying to get into the market now. On the development charge side, there's still these agreements are still, in many cases, being negotiated. So we haven't seen that have as much of an effect. That is a kind of a three year window. So that will certainly help when those deals go into effect. But the HST piece has been huge, and I think it's the one reason why single family seems to be doing much better because of that. You know, those families on the sidelines going, oh, well, now I can get my 130,000. I better get that now because that might not exist now.

Janet Jeganathan: All right. What systemic changes would you like to see the government increase housing stock or lower prices for people buying homes or even rentals?

Mike: Well, I think the single family side is particularly important. I think we do need to build kind of more of what's called missing middle type homes. Over the last 20 years, it seems that most of what's been built in Ontario has either been, you know, small apartment units in a high rise or McMansions and not a lot in between. So I think we need to tackle that, and we can do that through land use policy, through through zoning. I think there's some building code changes that that we need to make some changes to development charges to, particularly incentivise developers to build smaller but still family friendly three bedroom homes. It's the kind of challenge of housing policy. There's no one silver bullet that's going to fix this, that you've got to fix zoning and taxes and building code and all of these things together, and then we can kind of fill in that missing middle.

Janet Jeganathan: Given all of the challenges laid out. There is also, we've mentioned Trump. There's a lot of challenges Canada is facing. How high of a priority right now do you think housing is with everything going on?

Mike: It's not enough of of one. It used to be that everything seemed to be housing, housing, housing, particularly from the federal government. And now most of their focus is on international issues, which kind of makes sense. Housing is this kind of slow moving kind of glacial crisis. It's going to be there a month from now, two months from now, two years from now, where, you know, there seems to be something new every day on the trade file. So that's where government's attention is, and I think rightfully so, but I certainly hope that they don't ignore the housing issue that we have to, as a country, I think, tackle many of these issues at the same time. But but I think we can I think part of what we could do with the EU deal, for instance, is they have a lot of housing components that could be used in our homes that could lower costs, and it would also open up markets for our material suppliers to sell to the EU. So I'm hoping that we don't kind of silo off these issues and we can actually use these trade discussions to accelerate building.

Janet Jeganathan: Okay. So that's how the market's looking right now. But how did we get here and what would it look like for government to treat the housing crisis as an urgent priority? Leilani Farha, It is great to meet you and great to have you in our studios. How are you doing?

Leilani Farha: It's great to be here. Thanks for inviting me.

Janet Jeganathan: You have dedicated your life to fixing the global housing crisis, and you have written in your new book, Housing Inc. that today's housing crisis wasn't inevitable but engineered. Help me understand what led you to this conclusion.

Leilani Farha: Yeah, it was engineered. And you only need to go a little bit ways back in history. About 40 years ago to see what was going on and how we ended up where we are today. And I will say where we are today is really a result of a series of economic and policy decisions from 40 years forward.

Janet Jeganathan: Let's crawl back. Let's let's crawl back. What did.

Leilani Farha: We do? So there was an economist named Milton Friedman who had the idea that, well, it's called neoliberal ideology. And the idea was that corporations could really do everything and, and should really be given more power to do things, everything. And they were the idea was that corporations should be supported by government, and that they could, let's say, build housing. They could engage in business activities, and that eventually things would flow down to people in need. So government should take a big step back and corporations should be allowed to do what corporations do. Milton Friedman was considered a little bit crazy, and one of his ideas was that corporations only have a responsibility to shareholders. No social responsibility. And in fact, if they were to engage in some social responsibility, they would be cheating their shareholders.

Janet Jeganathan: Okay, okay.

Leilani Farha: So there's this ideology that's considered kind of crazy, but it ends up getting embraced by a bunch of world leaders. Margaret Thatcher, Ronald Reagan, Brian Mulroney.

Janet Jeganathan: Okay.

Leilani Farha: So what does it mean in practice and what does it mean for housing? So it means that government takes a big step back. Brian Mulroney was the prime minister who decided to stop funding social housing. But it also means some other economic moves making it possible for corporations to move into the area of housing, creating financial instruments that enable corporations to engage in housing, creating new economic systems to allow for global capital flows between countries. So a foreign investor could invest in domestic housing in another country, right. So a series of decisions and what ends up happening. And alongside that, we end up with low interest rates, which makes money really cheap for big actors, easy to borrow. Exactly. And so if you look at 2026, we have what I call a coven of actors. We have governments, we have businesses, financial firms and banks all working together, investing in the housing system. The sector. And we end up with Housing Inc. and they are all about profit to the exclusion of social welfare. All of them are working together and we end up with things like unaffordable rents, rent evictions, as they're called, demo evictions, as they're called, and increasing homelessness. So what I really want people to understand is that all of us are actually part of the housing crisis. So most people think, oh, housing crisis, homelessness, oh, people who are on social housing, waiting lists, but no, the the homeowner wannabe, the young family that wants to own a home that can't afford to. They are victims of the housing crisis. Older people trying to downsize, right? Living in these monster homes no longer needed trying to downsize, can't afford to downsize. Part of the housing crisis.

Janet Jeganathan: All right. I want to bring the conversation closer to home here, here in Canada. Yeah. You were also the UN special rapporteur for housing six years. You have been to all corners of the world. How would you rate Canada in terms of how we do housing, in comparison to what you've seen around the world?

Leilani Farha: Yeah. Well, the way you rate a country is not based on how it fares compared to other countries. Actually, you rate a country based on how it's doing in light of its own economic position. Canada is a top ten performing economy, right? We have the ninth or 10th largest GDP in the world. So you tell me, when you're walking along the streets of Toronto or actually any city in Ontario, and you're seeing people living in complete poverty, homelessness in really horrible conditions, when you see people being evicted into homelessness, and we're learning that a lot of people are losing their affordable housing and falling into homelessness, does that match with a top ten performing economy? I don't think so. And so Canada is not faring well. We we have a housing industry that is not delivering for people in need. And let's remember, because of that neoliberalism that I was talking about, those values have resulted in us having 97% of our housing stock is owned privately. Only 3% is social or non-profit housing, 97% is owned privately. And it is not performing for the needs of people.

Janet Jeganathan: Well, let's talk a little bit about solutions. As you mentioned, we're all in this together. So one of the first things you advocate for housing first approach, break that down for us. What would that entail?

Leilani Farha: Yeah. And I just, I want to just take one little step back from, from diving into housing first to say, if you know anything about housing first, you would know that it is based in a set of values. And one of those values is that everyone has the right to adequate housing.

Janet Jeganathan: Housing. Can you define adequate housing for people?

Leilani Farha: Yeah, it's actually a really simple definition. It's the right to live in peace, security and dignity. And there are some adequacy standards. Housing should be affordable. You should have secure tenure. You shouldn't be fearful of being evicted or being priced out. It should be, you know, cool in the summer and warm in the winter, things like that. One of the things that I was thinking about recently was a conversation I had with the ambassador from Finland to the United Nations, and she was saying to me that their Housing First program, and they have the most effective one in the world, although it's not perfect. She was saying to me that it is based in the idea that it would be a national embarrassment if a single homeless person died in a Helsinki winter on the streets. They truly believe everyone has the right to adequate housing. So that's the starting point for Housing First for for viewers who may not know what Housing First is, it really is Housing first. It's it's that you don't try to treat any sort of drug dependency, for example, first, or you don't try to reunite family first or etc. what you try to do is get the person housed. Once they're housed, then whatever social supports they need, it could be even something like childcare, it could be something else. Whatever social supports they need are provided to them for as long as they need them. Now, the reason that it's not completely successful in Finland is that, one, it's not legislated. So with the vagaries of politics, right? Depending on who's in power, they can tweak it or fund it a little less, which is what's happening right now. So they're seeing an escalation in homelessness, and they also haven't focussed on regulating the private market. So people are still finding things unaffordable and then falling into homelessness.

Janet Jeganathan: Okay. One of the things I think a lot of viewers and our listeners will take away from this conversation is what's one thing that they can do? Yeah. To, to move the needle here.

Leilani Farha: I really love that question. I've been thinking a lot about that. And I know people are going to be asking me what, because people in this country care. My Organization, The Shift, has come up with a handbook for action. So if you go to make the shift.org, you can see a bunch of things people can do. There's small things, really small things. And the idea is to get people to think differently. So I ask people, do you will you receive a pension at the end of your work life? Are you part of a pension scheme, pension plan? A lot of workers across this province certainly are. Call your pension fund and ask them, are you invested in residential real estate and in your investments? Are you contributing somehow to the housing crisis? Are you helping to price people out through your investments? If pension funds start hearing this from pensioners, they might start to feel a little uncomfortable. They might start to look at where their pension dollars are being invested, and a lot of pension dollars are invested in residential real estate. That's one example. There are people out throughout the province who have money that they want to invest well. Where should you invest? Don't invest in index funds that include residential real estate, like real estate investment trusts. Or how about this invest in a community land trust. There are community bonds that you can invest in that support community land trust, which is a totally different tenure system and kind of disrupts the market in some senses. So there are small things like that. We have a petition to the federal government sign the petition. It's asking the government to review its tax policies, its economic policies that really benefit these actors, asking for something in return for our public dollars, rather than just allowing these actors to do whatever they will.

Janet Jeganathan: I am curious, you know, the last time you were in this studio, you were here on the agenda, talking about housing as a human right. It was a different government at the time. We have, I don't know if new is the right word, but, you know, Mark Carney is in. He's a bit busy these days with a president down south. And I am curious, is, is housing a priority? Do you see it being a priority with this government compared to previous governments?

Leilani Farha: I think, you know, he's created Bill Canada Homes. It's a new entity. There's some money being floating there. Do I think it's the priority? It should be in light of how much people are suffering, how unaffordable things are, how much homelessness. I mean, walk down the city street anywhere in Ontario, right? So, no, I don't think there's the urgency. And I understand he's got a lot on his plate, and it must be very difficult to be dealing with what he's dealing with. With respect to President Trump. ET cetera. And tariffs, however, housing is the biggest single expense for most households. And so I would think that if he's worried about the economy in Canada and how people are going to fare, then he would be looking to stabilise people in their existing homes, especially people living in affordable rentals.

Janet Jeganathan: We have municipal elections coming up this fall. When it comes to housing, what is one thing you would like to see the candidates prioritise?

Leilani Farha: That's a good question. I want to say that this municipal election, at least I've been watching the one in Toronto. It's super fascinating to me. There are several candidates who are really running on human rights and housing platforms almost. I would call them, who deeply care what. I really hope that they, those candidates and other candidates can do is link what they're hearing from their constituents who are really suffering the housing crisis, link that with their obligations, should they be elected to implement the right to housing. So it's it's a kind of it requires a creativity, I think, to be able to translate what they're hearing from the ground into something that the city can do to address it. So that's what I'm hoping candidates will do. Listen to the people, especially those most in need, Recognize that if they get elected, they become responsible for implementing human rights and changing systems to make sure human rights can be realised.

Janet Jeganathan: Leilani, thank you so much. I really appreciate you taking the time to talk.

Leilani Farha: It was a pleasure to talk with you.

Janet Jeganathan: Making housing more accessible and affordable may seem like a no brainer for politicians, but the situation is actually complicated for millions of Canadians. A home isn't just somewhere to live. It's also one of their biggest financial assets. And a lot of people are counting on that equity to fund their retirement. So is it possible to make housing more affordable without affecting the financial security of people who already own homes? Rundown segment host Charlie Buckley digs into the numbers.

Charlie Buckley: Here's a magic trick for you. How do you make something more affordable without losing its value? That may sound impossible, but if you're talking about housing, some people think we can pull it off. Do you remember this clip from last spring, just after the federal election? Canada's new housing minister got this question. But affordability. Do you think delivery need to go down? No, I think we need to deliver more supply, make sure the market is stable. It's a huge part of our economy, but we need to be delivering more affordable housing. Critics said it didn't make sense. How could more cheaper housing not make housing cheaper? Well, we'll get to that. But first, what's so bad about prices going down? It would mean that more people could afford to buy. But the trouble is that around two thirds of Canadian homes are already owner occupied, and a lot of those owners are relying on the asset holding its value. Surveys have shown that close to half of homeowners are relying on property value to fund their retirement. So if home prices suddenly drop, that's a lot of people in a lot of trouble. It wouldn't be the first time. Plus, price crashes can impact other things, too. Mortgages could become harder to come by, fewer homes might get built, and for some that actually get less likely to buy a house, not more. How come? Well, no one wants to be the sucker who bought too early. Consider this if a house cost $1 million yesterday and half a million today, would you really buy now? Or would you wait to see if you could snag it for a cool 20 bucks? Same here. So is there really a way to make everyone happy? Can we make housing affordable without bankrupting Canada? One idea is to try and keep housing prices around the same and let incomes catch up over time. If you have more to spend on the same price, then there you go. Now it's affordable. The problem is that could take decades, a lot of decades. Instead, the typical pitch is for the government to help build lots of new, cheaper housing, to give options to people who wouldn't be on the market otherwise. In theory, this won't hurt the existing market as much, since the new supply could get eaten up by new demand. But in practice, maybe during and after the Second World War, Canada built thousands and thousands of homes using a strategy just like this. Pre-Approved blueprints and a lot of government help. Did home values drop? Well, according to the data in these historical reports, actually, no. Returning veterans, immigration and the baby boom kept demand high for decades after the war. And so home prices slowly grew, all while Canada's population rapidly increased. Whether we can make that magic happen again is another question, and so is whether we want to. That post-war housing boom meant that Ottawa was landlord, developer and eventually seller to thousands of homes at a time. Places like Vienna and Singapore have made major strides in housing, too. But it's meant a lot of government control over the market. And not everyone is so jazzed about that sort of thing. The housing market is one of the most pressing issues of our time, and you're going to hear all kinds of hot takes. But what needs to happen to it? But remember, like any magic trick, there's usually more going on under the surface. That's your reality check. Now you're in the know.

Janet Jeganathan: If you own a home, is the equity part of your retirement plan? And if you don't, does buying one seem out of reach? Let us know in the comments or send us an email to rundown@TVO.org. Until then, I will see you next week.