Finance Minister Chrystia Freeland is set to present the fall fiscal update, which is expected to address pressing issues related to housing and affordability. The Liberal government aims to regain public support as Canadians grapple with the escalating cost of living, making housing and affordability central to their policy agenda.
Despite budget constraints, Freeland has emphasized the need for responsible fiscal management while ensuring Canadians receive the necessary support. She acknowledges the limitations on government spending, stating, “We won’t be able to do everything.”
While the details of the fall economic statement have been kept under wraps, Freeland has consistently emphasized the government’s commitment to addressing housing and affordability concerns. Prime Minister Justin Trudeau reinforced this focus after the Liberal caucus retreat in London, Ontario, following a challenging summer marked by surging Conservative support in polls.
To address the housing crisis, the government has already introduced several measures to boost housing supply, such as eliminating GST charges on rental developments, providing additional low-cost financing for projects, and making federal real estate more accessible for housing purposes. Freeland has also indicated the government’s interest in making public land available and addressing the strain imposed by short-term rentals on housing supply.
Tim Richter, co-chair of the National Housing Council and head of the Canadian Alliance to End Homelessness, expects the government to unveil significant housing policies in the upcoming spring budget. He believes that Tuesday’s fiscal update may offer a preview of the government’s housing and homelessness strategies.
The Canadian Housing and Mortgage Corp. has estimated that Canada needs to construct 5.8 million homes by 2030 to restore affordability, a daunting task given current challenges.
Opposition parties have already outlined their expectations for the fall economic statement. Conservative Leader Pierre Poilievre has called for ending the carbon price, balancing the budget to reduce interest rates and inflation, and changing the approach to federal funding for municipal housing results.
NDP Leader Jagmeet Singh has advocated for more action on affordable housing and grocery prices, reflecting the public’s growing concerns about the rising cost of living. Inflation has surged, accompanied by historic interest rate hikes by the Bank of Canada, leading to increased mortgage and rent expenses.
Richter has urged the government to implement a rent supplement for individuals at risk of homelessness, emphasizing that the cost of homelessness on governments surpasses the expense of offering such assistance.
Ray Sullivan, executive director of the Canadian Housing and Renewal Association, hopes for increased spending to expand social housing options for low-income Canadians. However, he expects Tuesday’s update to focus more on political problem-solving rather than comprehensive housing solutions.
The Canadian economy has shown signs of slowing down, with two consecutive quarters of contraction. Rising interest rates are expected to squeeze more Canadians when their mortgages come up for renewal.
The federal government faces pressure to restrain spending to combat inflation and facilitate faster interest rate reductions by the Bank of Canada. Economists suggest that controlling inflation should be the government’s top priority, as it directly affects Canadians.
As part of its commitment to fiscal responsibility, the federal government has already reduced spending in the public service and redirected $500 million in travel and professional services funding across 68 departments.
Bank of Canada Governor Tiff Macklem has cautioned against government spending that could exacerbate inflation and has urged fiscal policy to align with monetary policy.
Tyler Meredith, a former head of economic strategy and planning for Freeland, believes that signaling fiscal restraint will be crucial for the government. However, he also suggests potential actions to alleviate the immediate affordability challenges, such as promoting competition in the grocery sector and revising mortgage regulations to assist Canadians facing higher interest rates upon renewal.
Meredith also raises the possibility of exploring ways to address energy costs and emphasizes the importance of making decisions that align with the best interests of Canadian households.
The fall fiscal update is expected to strike a balance between fiscal responsibility and addressing pressing affordability concerns, reflecting the government’s commitment to Canadians facing economic challenges.