Since the mid-1980s, Canada has adopted housing policies that take a hands off approach. During this time and progressing into the mid-1990s the federal government cut funding and eliminated many programs that were intended to help low-income individuals and families afford adequate housing.

As we continue into the 21st century, it does not appear that the federal, or now provincial governments, are going to be seriously addressing issues related to housing. In fact, if we continue with the status quo, it is expected that by 2040 the federal governments contribution to social housing—the type of housing most needed to assist families stuck in a cycle of poverty—will amount to zero.

While the federal government today is still spending an estimated $1.6 billion on social and affordable housing programs that were largely established in the 1970s and 80s, this level of funding is inadequate to address housing need. Our first indicator is to compare this number to the amount of money spent in the housing market in 2013: $322 billion. The $1.6 billion in federal spending, then, represents only 0.5 percent (one half of one percent) of total spending in the housing market.

This amount of funding might be enough if the percent of Canadians needing assistance was equally as small. However, this is tragically not the case.

Affordability crisis

In 2011—the last time census information was collected—1.6 million (12.5 percent) of the 10.9 million households in Canada were in, what the Canada Mortgage and Housing Corporation calls, core housing need. For a household to be considered living in core housing need they need to be living in a house that needs major repairs (inadequate), is overcrowded (unsuitable), or is unaffordable (spending 30% or more of before-tax income on household costs).

Of the households that are in core housing need almost three-quarters (73%) are in financial stress. It may be, then, more appropriate to discuss the housing crisis as a type of ‘affordability crisis’.

The pattern of housing prices in Toronto, Ontario and Vancouver, British Columbia provide shocking evidence that housing may be becoming too expensive for even middle-income families and individuals.

In 2004, for example, both Toronto and Vancouver had average housing prices hovering around $320,000. In only nine years, that average for Toronto rose to over $500,000, an increase of more than 60 percent. In Vancouver an even more incredible rise in housing price was seen, with the average unit fetching for over $750,000 by 2013, an increase of over 200 percent! (see Canadian Housing Observer 2014, Table 6)

It is not surprising then that both Toronto (16.9 percent) and Vancouver (17.7 percent) had the highest incidences of core housing need in the country.

Because of issues with housing affordability, core housing need is of course closely connected with household income. In 2011, it was estimated that 50 percent of people in the lowest-income quintile (those who make up the bottom 20 percent) are in core housing need,  accounting for over 80 percent of all incidences. Meanwhile, about 10 percent of moderate-income households (those between the bottom 20 and bottom 40) are in core housing need, making up roughly 17 percent of all incidences. The remaining 60 percent of the population that are middle-income or higher account for less than 2 percent of households in core housing need. The affordability crisis clearly, then, affects the poor more than any other income level. (see Canadian Housing Observer 2014, Figure 1-19 &  1-20)

What is the government doing about this serious issue?

So far the response has been a series of affordability initiatives. For example, in 2001 the federal government announced the creation of the Affordable Housing Initiative (AHI) which had a total price tag of roughly $1.2 billion spread over 10 years ($120 million per year). The primary purpose of which was to increase the supply of affordable housing in Canada.

After the conclusion of the AHI in 2011, the federal government announced in the same year another housing initiative, this time called Investment in Affordable Housing (IAH), worth $1.4 billion spread over 3 years. The objective of which was to similarly:  ‘improve the living conditions of households in need by improving access to Affordable Housing…’

While the cost of these programs may seem impressive, several reports provide some evidence that these types of initiatives have done little to create more affordable housing in Canada.

Newfoundland and Labrador

In a publication that looked at the results of the first year of funding in Newfoundland and Labrador under the IAH, it was reported that 2,600 households were assisted in improving their housing situation.  Of that number, 2,474 received funding for home repairs and 126 new affordable rental units were created.

While the funding certainly did some good, the overall effects were marginal at best. In comparison to the roughly 27,000 households living in core housing need, the 2,600 household assisted represents less than 10 percent of the total households in need. Furthermore, the targeting of the funding seems to be severely skewed as those households needing repairs (approx. 7250) only make up a small portion of the total core housing need population. Meanwhile, those households living below affordability standards (approx. 20,000) make up the vast majority of the total core housing need population but received very little intervention.

Northwest Territories

Similarly, the Northwest Territories has received funding under the IAH. With their first year of funding they were able to repair 80 households in need of ‘major repairs’ and to provide ‘technical upgrades’ to a 32 unit emergency shelter in Yellowknife.

Despite the fact that zero affordable housing units were created with this round of funding, the scale of the program even after three years of consistent funding will not be sufficient to address the more than 2,300 households living in core housing need. (Note: The Canada Mortgage and Housing Corporation does not include in their core housing need count those people living in bands or on-reserves. As a result housing need is undoubtedly much higher than indicated here).


The most recent count of core housing need in Ontario pegs the number of households at 630,000. At the conclusion of the three years of funding under the IAH, about 14,500 households (roughly 2 percent) were assisted so that they are ‘no longer in housing need’.  Of the number, the majority were aided through housing allowances, rent supplements, and funding for renovations/repairs.

In total, slightly less than 1,700 new affordable rental units were created through the IAH. If we compare this to the almost 206,000 housing units created in Ontario between the same period (2011-13), these new affordable units represent 0.8 percent (4/5 of 1 percent) of all housing created. (see Canadian Housing Observer 2014, Table 4)

Based on what little the IAH has been able to accomplish in the past 3 years, how much longer might it take to ‘end’ the housing crisis in—only—Ontario?

If core housing need remained static for the foreseeable future, and if current funding levels were continued indefinitely until all households were raised out of need, it would take more than 130 years to fix this problem (at 4,800 households assisted per year).

This is, of course, a very crude calculation and should not be taken literally, but it helps to highlight how the level of funding and design of housing programs, such as the IAH, are completely insufficient and ineffective in redressing core housing need.

What to make of this?

we should be loudly calling out to all levels of government for a renewed effort to end the housing crisis that is affecting more than 1.6 million Canadian households. The failure of Canada to help those in housing need is ultimately twofold. First—as we have seen—it is a public policy failure. All levels of government, but more specifically the federal government, have failed to develop housing programs that can adequately meet the needs of Canadian households who are experiencing housing insecurity. Second, because housing in Canada has been designed around the private market, typically only those that have enough income can find adequate housing from the marketplace. The upshot of this is that lower-income households typically do not have an income that is high enough to rent or purchase housing from the market that is affordable. This portion of the Canadian population therefore, in the words of David Hulchanski, generate a ‘social need’ rather than a ‘market demand’, and “… a housing system based on the market mechanism cannot respond to social need” (emphasis added).

The blame can be, then, shared between both the private market and the government. However, the government, not the private market, is ultimately accountable for the welfare of its citizens. Hence, the solution must come through public policy.

If we can all agree that adequate (and affordable) housing should be a right, and that the current response from the government has not been strong enough, we should be loudly calling out to all levels of government for a renewed effort to end the housing crisis that is affecting more than 1.6 million Canadian households.

For more information on affordable housing, see The State of Homelessness in Canada: 2014 report.