This is a problem…. ahhh no its a crisis. Click here to learn more or read an excerpt below.
Once upon a time, Canada’s most powerful national institution for putting a roof over people’s heads, the Canada Mortgage and Housing Corporation (CMHC), applied itself to housing all Canadians, not just homeowners.
During the 1970s and 1980s, CMHC remade Canada’s housing market — for better and sometimes for worse. It financed unprecedented social housing construction, while tinkering with incentives to make single family homes more attractive to middle class buyers.
CMHC “used to fund a wide range of programs that explored and transferred innovation about housing across the country,” said Michael Geller, the Crown corporation’s social housing program manager between 1972 and 1981.
But the fairy-tale beginning to this story was in a different Canada. The evolution to the country — and CMHC — we know today began a quarter-century ago.
Progressive Conservative prime minister Brian Mulroney held the reins. Over his six years in office, CMHC had slashed support for co-ops and cut its yearly investment in social housing by almost half a billion dollars. Even so, as late as 1989 CMHC was still building 20,000 to 30,000 new social housing units annually.
Under every party since, Canada’s government has staged a steady and sometimes stealthy retreat from the housing crisis that now faces not only the marginal and disadvantaged, but a growing portion of urban dwellers earning anything less than above-average incomes.
National leaders have left social housing as much as they could to the provinces, while catering increasingly to better-off Canadians who already own or buy a home, and the banks that profit from loaning them money.
Not that things were perfect 25 years ago. In 1990, two Liberal MPs, Paul Martin and Joe Fontana, reported that shelter was costing 1.3 million Canadians — or 4.6 per cent of the population over 30 per cent of their income, the benchmark for what CMHC considers to be “core housing need,” or affordable.
“The federal government has abandoned its responsibilities with regards to the housing problem,” Martin and Fontana thundered in a press release.
Owning, not housing
CMHC has little role left in meeting its former mandate to help all Canadians find suitable housing.
Until last year, it continued to spend almost $2 billion a year subsidizing nearly 600,000 social housing units it helped create three and four decades ago. But the first of those commitments expired in 2014, and the Conservative government is not renewing any of them.
With their expiry, some social housing providers have kept going by selling off units, charging market rents, or creating social enterprises to fund their activity. Others have closed their doors. CMHC’s social housing budget is anticipated to zero-out entirely by 2040.
Its focus today is mortgage insurance — backstopping banks against homeowners who default (although home buyers cover the premiums).
The business is hugely profitable for Ottawa. “In good times it makes a lot of money,” Hulchanski said. “Hundreds of millions of dollars annually that transfer to general revenues.”
Of course if times turn bad, the federal government pays out, but it’s banks that get the bailout. People who default still lose their homes.
“The federal government has had, for many years, an obsession with the ownership market,” lamented Michael Shapcott, co-author of a book on homelessness. That obsession has come at the cost of its former ability to help all Canadians.
The last legacy agreement from the fairy-tale years of CMHC’s housing activism still has 18 years to run. But the agency is already out of the social housing business, and into the business of backing banks.