tion” of housing through low interest rates, spurring spending which has resulted in cheaper mortgages. This increased household borrowing and subsequently created a housing boom that divided the working class and continues to contribute to inequality today. While the devolution of housing policy to the provincial governments has attempted to create a flexible collaborative approach between the federal government and provinces/territories to increase regional control over affordable housing programs, these programs have been subpar and have created unsustainable gaps in housing programs. These gaps are largely due to the lack of revenue from provinces already heavily burdened by spending on other expensive programs, such as healthcare and education. This lack of spending means limited resources are provided to municipal governments despite their increased responsibilities in delivering housing programs, making it challenging to secure stable partnerships or funding. As a result, municipalities are forced to juggle protecting existing rental housing, building new rental housing, and supporting development of higher-value housing, which cities rely on for revenue. These limited financial resources may continue even with the implementation of the federal National Housing Strategy (NHS). Because there is a cost-sharing component to the NHS with the provinces and territories, and due to the nature of federalism, provincial and territorial governments have the power to block housing initiatives that they consider too expensive. Current levels of provincial spending have already met the cost-matching requirements for their programs, making additional funding for housing unlikely. To make up for these gaps in funding, the private sector is expected to provide affordable housing, but lack of incentive for these private developers has made the types of units they build unaffordable for either potential owners or renters. Finally, the affordable housing issue cannot be addressed without considering the housing crisis that northern Canadian communities are currently facing. Much of the current supply in these areas is in extreme disrepair and poses a real risk to the communities living in these regions. Currently, housing is provided through territorial housing providers in these regions; however, gaps in the housing continuum continue to exist, particularly due to the high costs associated with building or maintaining housing stock, which directly affects Indigenous communities. Despite these challenges, the interdependencies of different levels of government have become more apparent in recent years with a push to create more affordable housing, particularly rental housing, since single18 / Canadian Government Executive // January/February 2022 HOUSING family home ownership has become out of reach for many Canadians. This requires the input from all three levels of government in addition to a more effective, collaborative approach to intergovernmental relations. Intergovernmental Approaches to Housing Affordability While this paper outlines the many reasons why housing has become unaffordable in Canada in recent years, the main problem lies in the lack of supply and creation of affordable housing units. The main challenges associated with the creation of affordable housing programs are the high development costs, the low profit associated with programs, and the difficulty in funding these programs. This means that sharing financial resources between all levels of government, particularly from the federal level, is one of the key success factors required for the implementation of a robust housing policy. Although housing policy execution has become the responsibility of provincial and municipal jurisdictions, one should not underestimate the implications the federal sphere has on the housing system. Access to housing is necessary for civilian health, social welfare, and economic prosperity, resulting in particular importance at the federal level. Additionally, tools at the federal government’s disposal, including monetary and fiscal policy, mortgage insurance and regulation and taxation among others, influence housing policy. A successful approach to affordable housing therefore requires the active participation of the federal government. The launch of the National Housing Strategy has been a good starting point and has provided Canada with its first national housing policy, providing clear policy guidance on how housing should be managed in the country. It is clear, however, that provinces, territories and municipalities are financially limited by what they can realistically implement. Therefore, the federal government should continue to play a role in financially supporting provincial and territorial governments, thereby enabling them to develop and execute robust housing programs. This financial support must go beyond the existing funding provided under the National Housing Strategy, since only $16B of the announced $40B in federal investment can be qualified as new spending, likely making it insufficient to fund groundbreaking housing programs. Similarly, on the demand side of the equation, the federal government should continue to play a role in the creation of programs to support first-time homebuyThese limited financial resources may continue even with the implementation of the federal National Housing Strategy (NHS). Because there is a cost-sharing component to the NHS with the provinces and territories, and due to the nature of federalism, provincial and territorial governments have the power to block housing initiatives that they consider too expensive.
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