Madam Speaker, I am very pleased to rise to speak to the motion moved today by my colleague from Mission—Matsqui—Fraser Canyon.
Housing is of fundamental importance to Canadians across the country. Most Canadians dream of having a house, a residence, a home, a place of their very own. Housing is also an essential need for many others who unfortunately do not have access to housing or the ability to buy a home. In other words, as the motion says, the cost of housing has increased so much that buying a house is quite simply not an option for many Canadian families right now, and especially young families. The cost of housing continues to rise as we speak. To sum up the situation we are currently facing, Canada's housing market is out of control.
Over the past two years, total housing sales in Canada increased by 75%, compared to the United States, where home prices increased by just 13%. In the past year, the average house price increased by 32%. That increase is nearly twice as high as the increase in the United States.
Available data from Canadian Real Estate Association statistics indicate that, in Quebec, housing prices have increased significantly since the start of the pandemic. In April 2020, the average cost of a house in Quebec was just under $340,000. By April 2021, the average cost of a house had climbed to nearly $450,000. That is a 32.6% increase.
Here is a brief overview of what has been happening in Quebec's regions. According to the Quebec Professional Association of Real Estate Brokers, in the first quarter of 2020, single-family home prices rose by 32% in Gatineau and 29% in Montreal. In Quebec City, prices went up by 15%; in Saguenay, 24%; in Sherbrooke, 32%; and in Trois-Rivières, 21%. The market is absolutely crazy. That is not my opinion. That is what Michel Girard said in his analysis of the real estate market, an article entitled “Un marché immobilier fou raide”, published on April 3.
Over the last year, residential construction has increased by 22%, despite the rising cost of materials, and has brought the share of housing in Canada's GDP to 9.3%. That is a record.
What are the Liberals doing about this unacceptable situation? Do they even realize the extent of the crisis?
The ministers, of course, have their canned answers and their talking points that they can repeat ad nauseam today, but they are once again unable to present a credible plan to fix the problem.
In May, the Bank of Canada reported that household debt and market instability had increased over the last year, as we have just seen. On the subject, the Bank of Canada said, “The vulnerability associated with elevated household indebtedness is significant and has increased over the past year.” It also said, “If house prices and household incomes were to fall in the future because of a shock to the economy, some households could need to cut back on spending. This would slow the economy and possibly put stress on the financial system.”
The Governor of the Bank of Canada pointed out six vulnerabilities that could lead to the collapse of Canada's financial networks if they were affected by a severe external shock, such as a recession. Two of the six vulnerabilities identified were related to housing. The first is the high level of debt that Canadians have been forced to take on in order to buy a house and the second is the ever-increasing cost of housing and accommodations.
Bank of Canada researchers believe that households whose mortgages represent over 450% of their income are particularly vulnerable to bankruptcy. There are already very telling figures with regard to bankruptcy and financial hardship. According to Government of Quebec real estate statistics, the number of acts of financial difficulty increased by 49% from April 2020 to April 2021, going from 357 to 533 acts, even though interest rates are still very low right now.
Generally speaking, when Canadians are continually forced to increase their already high levels of debt because of an imbalance between supply and demand, Canada's future growth is at risk.
Unfortunately, the government is not really doing anything when it comes to giving Canadians access to affordable, or even adequate, housing. The current policy has failed to create a sufficient supply of housing to meet the demand in Canada. As a result of this failure, young Canadian families are having more and more difficulty obtaining affordable housing. That is a reality that far too many young couples and families are facing as first-time homebuyers. Housing options are limited and out of reach. The pandemic boom, as we could call it, has resulted in a 30% increase in housing prices in many cities and towns in Canada.
One of the Liberal government's solutions in budget 2021 was to impose a 1% tax on foreign owners of vacant housing. Unfortunately, this policy is nothing but a farce. What is 1% to ultra-rich foreign business people who see their investment grow by between 20% and 40% in a single year? This is merely a minor inconvenience for wealthy foreigners. Meanwhile, the situation is a disaster for many Canadians who continue to put their dreams of owning a home on hold. The fact is that speculative foreign buyers in the Canadian real estate market distort the market and ultimately put home ownership out of reach for Canadian families and workers.
Rather than simply inconveniencing foreign buyers, the government should seriously consider a temporary freeze on home purchases by non-resident foreigners. If the government really was concerned about foreign speculation, it would have taken concrete action by now.
Why does the government refuse to do something about the fact that the Canadian housing market is secure for foreign investment but unaffordable for Canadians? Why is the government turning its back on young families while continually allowing foreigners to buy up properties on the market in order to make a quick buck and, in many cases perhaps, pursue illicit activities?
Steps should also be taken to get rid of the Liberal government's failed first-time home buyer incentive. This program, designed to provide eligible buyers with an interest-free government loan, is a huge failure. A year and a half into this three-year program and only 9,100 homebuyers have used it. That is a far cry from the 100,000 buyers the Liberals anticipated would use the program when they introduced it. Not only did Canadians reject the idea of the government having a financial stake in their home, but this program does nothing to resolve the accessibility problem currently plaguing Canada's housing market.
Housing experts note that the program's eligibility rules simply do not reflect the reality of the skyrocketing prices of homes in Canada's largest cities and, as we are now seeing, in the majority of the towns and municipalities in every province across Canada. The $1.25-billion amount that was given to the Canada Mortgage and Housing Corporation to operate this program could certainly be better used to legitimately help first-time homebuyers in Canada.
The housing supply is insufficient, so the government needs to focus on building more housing. As a result of policies introduced by Pierre Elliott Trudeau in the 1970s, Canada has not managed to build enough housing to meet the needs of our growing population, which led to the crisis we are now seeing. While low interest rates and other economic factors did contribute to this situation, the policies unfortunately did nothing to address the housing shortage plaguing our market.
In conclusion, Canadians cannot ignore this issue any longer. We need to ensure that Canadians no longer have to shoulder the cost of the Liberals' mismanagement. We need real measures to even out the housing market and provide housing for the young families and Canadians who really need it.