The Agenda with Steve Paikin (Audio) - How Can Canada Make Housing Affordable?

Episode Date: March 12, 2025

Until the trade war began, one of the most pressing issues in the country was the housing crisis. Ontario alone identified the need to build upwards of 1.5 million new homes by 2031. The federal government put billions on the table in several previous budgets, as have the provinces. But, affordability and homelessness so far haven't shown much improvement. Steve Paikin sits down with Nate Erskine-Smith, the federal Minister of Housing, Infrastructure and Communities and the Liberal MP for Beaches-East York, to find out what the federal government intends to do about the housing crisis during uncertain economic and political times.See omnystudio.com/listener for privacy information.

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But affordability and homelessness so far haven't shown much improvement. With us now for more, the Federal Minister of Housing, Infrastructure and Communities, Nate Erskine-Smith, who's also the Liberal MP for Beaches East York, and we welcome you back to the studio. Yeah, thanks for having me. I wanted to start with like a very basic question about when you took this job on, which is not even three months ago. I assume you knew you were probably here for a good time, not a long time as the song goes. I said short runway I think in my opening remarks

that I was swearing in. Exactly, so I guess the obvious first question is, can you, there's gonna be an election called soon, you may not even have this portfolio a month or two from now. What made you think or have you discovered that you can or cannot actually do anything in such a narrow period of time?

I mean, I went in eyes wide open where this is such a challenge. It's decades in the making, and we're not gonna get out of it in three months with me as the minister. Now, I was able to build on the success of my predecessor where I think as of last year, we have a pretty comprehensive set of policies in place and I'm able to deliver on a lot

of those policies now and so I've been out making announcements on Housing Accelerator Fund, I've been out making announcements on public transit and there are real dollars in communities that are helping to get housing built and greater density in your transit and that's all really good. The next part of this is what comes next and really putting my own stamp on what comes next. And I've been vocal about the need to remove barriers to getting the market to build, but also been vocal about the need

to double non-market housing, and really play in that space as well. Is it a good thing, or is it a harder thing for you doing your job, the fact that the Trump trade war has taken over the political agenda of the country? I harder in the sense that the overriding focus, of course, as it rightly should be, is focused on defending our economic and national interests.

The other challenge is, as we want to drive down the cost of home building, uncertainty, and the increased risk of the economic uncertainty we face and rightly face with the threat of tariffs, that undermines confidence and undermines the ability for the market to build. And so our objectives are at odds and we need to focus on defending our interests against Donald Trump and that's the most important job. But the second most important job, you said at the top, is addressing the housing crisis.

And yes, they're at odds in some ways in terms of the challenges, but we've got to do both at the same time. Because I just wonder, if you're going to the Minister of Finance saying, you know, I'd really love a few more billion dollars to help do this A, B, and C programs I've got. And then Dominic LeBlanc says, yeah, but I need those billions to deal with the tariff for.

Well, even more challenging is, we haven't even got through a budget cycle with me as a minister, I would love to get through a budget cycle. But no, I think there's actually an appetite to get things built, right? So you want to make sure that you are defending our interests in the short term with retaliatory tariffs.

And we see that. And there's been a really strong, forceful, united response. You see premiers stepping up with their own non-tariff responses as well. And that's all really important. You also need to start to look to stimulus. And what does it look like to look to stimulus and what does it

look like to get things moving and get things built and no more is that more important than housing and so I do think when we think of stimulus it can't just be short-term jobs it's got to be how do we create economic benefits in the short term but that are also going to serve us in a sustainable way over the long term and how does that build back better once upon a time? Yeah maybe yeah I mean but in this case I look at it as how do we partner with industry to say what are your challenges and I've tried to do this when I crisscrossed the country I was in Montreal I met with Quebec builders and was

asking their challenges their big challenge was there's this huge gap in wastewater infrastructure some municipalities in Quebec have put a moratorium on home building because they don't have the actual infrastructure well we've got an infrastructure fund, not nearly enough money to cover that gap. But look, the Canada Infrastructure Bank does this work too, housing enabling infrastructure, and they finance it. So we are trying to play in that space

and help the market build market supply. And then the second part of this is we know that the market is not going to deliver the affordability that we need. So a renewed focus on community housing. And you mentioned challenges on homelessness, but I mean, in Ontario, it's especially acute. It's a challenge all across this country.

And we've got to be seized with that as well, help those in the greatest need. We're gonna get to both those things, but I just, I mean, one of the things you said a moment ago is that you're trying to figure out how to bring the cost of building new homes down. And yet here are tariffs, which are going to ensure that the cost of doing everything goes up.

Yeah, tariffs alone are not going to have a ton of an impact on housing specifically. It really is the economic uncertainty. If the Bank of Canada acts, that will help to some degree, but it is, uncertainty is a real barrier to the market acting. And so we need to be there to say, we're gonna help drive down the costs on the tax side. We're gonna make sure we cut red tape and move things quickly through permitting. And we have to make sure we innovate

and we make sure we have economies of scale to home building that we drive down the costs as much as we can. Doug Ford has said he wants 1.5 million homes built by the year 2031. You're smiling already because you know, as every expert I've talked to knows, there is no way in, you know,

H-U double hockey sticks that that's going to happen. But presumably you see yourself as having a role to help make that happen. What is that role? So, one partnership with provinces that are willing to partner with us, partnership with municipalities, and just a recognition that we all have an important role to play. Municipalities have an incredible role to play in removing red tape and expediting permitting. Provinces with a stroke of a pen can move things even faster, because municipalities are obviously

creatures of the province. Our role is really the federal spending power and making sure that we use that fiscal firepower to drive change. And we are doing that. You take the Housing Accelerator Fund. It was a $4.4 billion fund. It was directly focused on basically rewarding municipalities

that delivered ambition in cutting red tape, any restrictive zoning, getting more gentle density everywhere, greater density in your transit. Every fund that we've got, the Canada Housing Infrastructure Fund, that's wastewater, waters, you know, housing enabling infrastructure is how you should think about it. That fund also is tied to conditions of how do we make sure we're driving down development charges,

stabilizing development charges. Our public transit fund makes sure there's density in your transit. So the spending power is really important. Is it working? That housing attillerator fund, is it working? It is, yeah. I mean, you got to be careful how you judge success, because we all want to judge success by housing starts and completions.

And that is how we're ultimately going to be judged in the end. But at the end of the day, when you see 200 municipalities across this country that have deals through the Housing Accelerator Fund that are changing zoning, that are upzoning, that are cutting through red tape, that are expediting permitting processes, speeding up timelines, all because federal dollars have been on the table, yeah, it's changed the system.

And it's changed how we build homes. So I think that is really important. And we are going to continue to see results. It's not gonna be overnight though. And I think this is just the thing I do want to leave people with. You have a federal government that in fits and starts between 2015 and 2017 got back in the game. 2017 the National Housing Strategy got us back in the game in housing after decades of bipartisan neglect. And really now it's a question not of direction but of scale.

Last year we have a comprehensive plan in place, but we need to double down on that spending in many ways. And I think Carney will say spend less and invest more. But housing truly, especially community housing, is an investment we need to make. High immigration got the blame for a lot of the housing crunch. Oh, yeah.

Yeah. Do you think that was fair? In part, yeah. I mean, you've got to look at it to say, from a broader perspective, population growth is we have to match population growth with housing starts, right? And we weren't there.

And that was partly driven by, especially post-pandemic, the increase in immigration. I'm wary of with such a complex challenge saying it's one thing and one thing only but as a basic matter of supply and demand you got to make sure that supply keeps pace with demand and we have seen action and people should know this too. We've seen serious action from the federal government to make sure we see those numbers stabilized especially when it comes to temporary immigration which you know

again people can point fingers. And you can look at international students in provinces and really encouraging some colleges and universities to really take advantage of that and balance their books on the backs of international students in an improper way. That created challenges, especially in certain communities around housing.

We are stabilizing that in a serious way. That's important. There's still a bit more work to be done on that front, but at the end of the day, it's not enough to take action on immigration. We also have to get homes built. For sure, but if the immigration rates are going down, which your government has said they will do, is that to say the housing crisis is going to be a little less significant?

It will ease it, for sure. It will. Yeah, I think unquestionably. And I think if there's some criticism since I would say you know all politicians probably came a little too late to that realization and you know provincial federal and there is action now and so as those numbers stabilize and as we see demand soften to a degree on that front you know demands not softening in Toronto but as demand softens to a degree as a result of the immigration changes, we now

need to double down our efforts to get things built. I guess one of the reasons I'm raising this is that we have seen, particularly in the United States, how immigrants can be demonized as being the focus of all problems for our society. And I want to be sure the federal government is not doing that in this case. No, I don't think we have a housing crisis because we have too many immigrants here. No, I don't think one should demonize, especially demonize

certain individuals or certain communities. I mean, international students, temporary foreign workers, people who are coming here to seek a better life, they make our country a better place. There's no question about it. At the same time, from a better life, they make our country a better place. There's no question about it. At the same time, from a macro perspective, from a broader perspective, you want to say, how do we as decision makers ensure that we're sitting down, the immigration minister is sitting down with the housing minister, sitting down with housing ministers across this country and saying,

our targets have to match your targets? How do we make sure that the population growth is being matched by housing supply? And it's not to, again, point fingers and blame. It's how do we work together to make sure we're doing what's right? So bottom line here, you've had the job for almost three months. Is it easier for a young family to buy a home in this country now? After three months? Thanks to your having had this job for almost three months.

I will say a few things about what I've been able to do. I have been able to, I hope, move things more quickly through the system when it comes to transit. So in Toronto here for example we've seen a number of deals that I've been able to make with the city as it relates to finalizing a deal on you know subways and making sure that that was signed. We've got a deal soon to announce on a on a Toronto builds. And I won't go into the details of it. No, do share.

We'd love to hear it. To come, I got to stand at the podium with Olivia. But there's been a lot of work to land deals with municipalities and get more things built more quickly. But again, just in the interest of honesty, these things are going to take time to get built. You don't build homes in one, two, three months. One area that I have been able to, I think,

move the needle on in a more significant way is around addressing homelessness. People should know since the pandemic, we have increased reaching homeless or national homelessness strategy. We've increased funding by almost 400%. We maintain that funding. We deliver $4 billion through the Rapid Housing Initiative

to get homes built to transitional housing shelters and supportive housing. I have been able to, in my role, make sure that as dollars were going to lapse at the end of this fiscal, repurpose them specifically to address homelessness in our communities that weren't going to receive federal funds, that were really struggling with challenges in their communities address homelessness in their communities that weren't going to receive federal funds that were really struggling with

challenges in their communities and camps in their communities and I have been able to get dollars into those communities that would not otherwise have gotten them. How does that work because I mean you I suspect we'd agree on this I cannot remember a time and I'm a little older than you where we have seen homeless encampments in every major city and town in this province and it's shocking. So how does what you are trying to do actually reflect itself in reality? A few different ways. So and like you, I've seen it not only here in Toronto, I mean crisscrossing the province for the Ontario Liberal leadership in 2023, it

came up everywhere right? And it came up from a number of different ways. People would say, you know, from a very compassionate perspective, they would say, these are neighbors and they need our help, and there are too many people in need of help, we need to do more. And there were others that were saying, you know, our main streets and our parks and these are public spaces, and they need to be welcoming to everyone. And I think part of it is the clarity of what the goal is, and the goal is to make sure we do have welcoming public spaces and they need to be welcoming to everyone. And I think part of it is the clarity of what the goal is.

And the goal is to make sure we do have welcoming public spaces that are welcoming to everyone at the same time as we ensure we treat everyone with dignity. And to do that, we need to make sure that we are building more homes that are accessible and available. And who is the we there? All partners. So the federal government has a role to play on the spending power and we're seeing, you know, I mentioned $4 billion that's already been delivered.

There's another billion dollars at CMHC that has been allocated for transitional housing, emergency shelters, and supportive housing. You also need, you know, the continuum of housing. So when I was on PEI, the Boys and Girls Club had an emergency shelter that they support. And then there's transitional housing that they built. And what comes next is affordable housing that is not up to market, but it's also not a shelter, and it's also not transitional housing.

So we do need to lean into, and this is the community housing, non-market housing conversation, we do really need to lean into that. Because if you want to make sure there's that continuum because if you want to make sure there's that continuum, if you want to make sure there's affordability across the spectrum there, there is a much more forceful role for the government to play, all governments, the provincial government too. Ontario used to have, in the 60s, an Ontario Housing Authority

under a progressive conservative government here that got social housing built. We have a huge social housing stock. I just met the housing minister in New Brunswick, but it's dated. We haven't built a ton of it in recent years and so we got to do more of that. We got to update the existing stock we've got and retrofit it, but we've got to build more because otherwise you're gonna see it on our streets, you're gonna see it in our parks, and that's not acceptable for all sorts of reasons. I know this is tough, but I

also know that it shouldn't be as intractable a problem as it has appeared to be over the last decade or so. And to that end, I mean, I saw an example in Hamilton the other day where they are building these, they're homes, but they look actually like very tiny shelters. Tiny homes, yeah. Yeah, tiny homes.

And they get people out of the cold, and they give them a place to sleep and to be. They give them a place to be. I guess, why can't that happen nationally quickly? What's preventing it from happening? It can, it is, but again it's not a question of direction, it's one of scale. So this is the Rapid Housing Initiative that I was speaking to. So, and I'll speak, I'll use an example in my own backyard in East York. The city put up a parking lot, we put in capital dollars

through the Affordable Housing Innovation Fund, which was a precursor to the Rapid Housing Initiative. And 60 modular housing units were built in under two years. And there are 60 people who have exited the shelter system and now are living in bachelor units. And there is support there from social service agencies. But here's the challenge. When I speak to the progressive conservative

housing minister on PEI he talks about wraparound supports and the provincial role there and it's health care and that's their role. We can bring in capital dollars to build municipalities, provinces, feds, we can all put up public land and then provinces have to step up with wraparound supports. Not every province is at the table in the same way on wraparound supports and they need to be. Is it Ontario? No and And here's my challenge to Ontario. Ontario has increased homelessness housing spending, but they've not increased housing spending overall.

And so we've seen social housing spending decline significantly. And as we have increased our social housing spending, as we've gotten back in the game federally since 2017 and 2018. As our dollars have gone up, the provincial dollars on social housing have gone down. So it's a wash. That's right, and it's unacceptable.

I'm glad to see Premier Ford step up and really give President Trump a good go. And that's what he's got to do right now. But when all is said and done on health care, on housing, there's a lot more he and his team's got to do right now. But when all is said and done, on health care, on housing, there's a lot more he and his team have got to do. Can we solve this problem? I know we're not going to solve this problem in three months. No, but we can lay track to do it, for sure.

Well, that's what I'm worried. How much of a dent can you actually make in this problem for the amount of time, for the period of time, in which you're going to have this job? Yeah, so one, it's been getting dollars out the door. Two, it's been, how do we make the most of those dollars? So I'll use the housing infrastructure fund as an example.

We have a $6 billion fund across the country for all provinces on housing enabling infrastructure. I mentioned meeting the Quebec builders. They said in Quebec alone, the gap is $45 billion. And here we got a $6 billion fund. Now, again, CIB, the infrastructure bank, has a role to play in this too on the financing side and just changing how we do business.

But when we want to drive down development charges, Ontario and BC are the worst actors on this in driving down the cost of home building. So I'm trying to make the most of this housing infrastructure fund. I'm trying to do deals with municipalities directly, where I'm saying, give it your best shot.

We want to help you with housing-enabling infrastructure, but I also want you to take action on DCs, development charges. So starting to have conversations with municipalities that are saying, can you defer the collection until occupancy and waive interest? Can you waive development charges entirely on the first four units of a multi-unit residential build? And we're starting to establish best practices with municipal actors to drive down the cost of home building.

So that's on my watch just in the last few weeks. The last piece, and this is the what comes next. Because Carney has rightly said it's time to build. It is time to build, especially when it comes to housing. And there are additional steps municipalities and provinces have to take to get out of the way of home building. And on the tax side, on the regulation side, and the red tape side.

I think we can play a more forceful role on innovation on the prefab offsite construction side, drive economies of scale. There's a role to play for the feds on the spending power. The other place we, and I've said it already, but of the entire housing stock, do you know how much is social community housing? Nope.

Under 4%. It's less than half the OECD average. In the UK, it's 16%. So my goal, however long I occupy this role, I'm just going to keep repeating until we get to this place. I want to see us double in the next seven to 10 years, double non-market community housing. That will be an important contribution if we can make it.

Got a couple of minutes left here, so let's talk a little politics. I know that at some point, I presume, either Mark Carney or his team are going to come to you and they're going to say, minister, when do you think we should call the election? What are you going to tell them? I think that we've got to get as much done as we possibly

can in a short runway. And there are a few things that I'm trying to tie up over the next couple weeks. I do think when you look at you know my conversations with Canadians when I see questions asked that pollsters are asking an overwhelming majority of Canadians are saying need a mandate. All opposition parties who said they're gonna bring us down, Jagmeet Singh is you know on and off again on that I'm not really sure, but you know overwhelmingly the opposition parties are saying they're going to bring us down when we go back to parlance. So my advice would be you don't have a seat in the house.

We're going to have an election this year one way or another. You need a mandate to defend our national interests vis-a-vis Trump. So let's go to an election in the next two weeks. Should he call it this week or next week? I would say around March 20, March 22, whatever it is, before we go back to Parliament. If he had a seat in Parliament, I might feel differently about it.

If we weren't facing a threat of tariffs, I might feel differently about it. If we had a partner in Parliament, I might feel differently about it. But none of that is true. So let's go seek a mandate. Let's have Canadians have to make a call. And let's get back to work.

Is it a problem to have a national election in the middle of this terra-four with the United States? No. And I'll say it for a couple of reasons. One is, I think we, in Prime Minister Trudeau, he has really met the moment. And we have established an incredibly strong response. Provinces have been part of that and what needs to be in place is in place.

And the second thing to say is when it comes to the damage to our economy, this isn't like the pandemic where everything shuts down. This is going to hurt us, but it's going to hurt us over a longer period of time. And there's an opportunity, especially when it comes to stimulus, when we think about it being time to build, what are we going to build, how are we going to build in the short term that's going to benefit us in the long term? Those are decisions that don't have to be made overnight in a rush. They should be made thoughtfully in partnership with industry and non-market actors. In our last 20 seconds here, once upon a time you said you weren't going to run again. Now

you are running again. What's changed? I mean, I said this when I was sworn in as the minister, but I signed up to this job to make the biggest difference that I could. And when I asked my, when I talked to my wife about it in December, she said, it's terrible and you should do it. You make a big difference. And when I asked my eight year old, he said, no.

And I said, well, why not? He goes, well, I want you to coach my baseball and so my commitment is I'll be housing minister and also an East York baseball coach. You're gonna do both? I'll do both yeah. Okay that I gotta see. Because you're gonna be working 80 hour weeks I don't know how much time you're gonna have to coach baseball. The thing is you gotta carve out space for what's most important, and what's more important than my eight-year-old playing baseball.

Nothing. That's the answer. That's Nate Erskine-Smith. He's the Minister of Housing, Infrastructure, and Communities and the Liberal MP, for a little while longer anyway, in Beaches, East York, seeking re-election there. Thanks for coming in tonight. Thanks, Stephen.