Inflation isn't the main factor driving Canada's sky-high housing costs, experts say
CBC
As Canadian housing prices continue their dizzying climb to record highs, the federal Conservatives are defining the problem as a "housing inflation crisis."
That description dovetails neatly with the ongoing debate about Canada's inflation rate, now at a 30-year high of 4.8 per cent. But some experts warn that pairing housing costs with inflation could obscure the actual causes of surging home prices.
"These issues have predated our conversations about inflation, or even concerns about inflation," said Murtaza Haider, a professor in real estate management at Ryerson University.
"To assume as such, we would make the mistake of thinking that if we solve the inflation problem, we will solve the housing problem and that would be a big mistake."
The House of Commons is examining the effects of inflation on the Canadian economy through a special parliamentary committee that launched in January. The first meeting of that committee saw a thorough discussion of housing prices, but some who took part say the committee risks conflating two issues which are distinct in some ways.
"I don't think we can call this just an inflation problem," said Sahar Raza, a manager at the National Right to Housing Network.
Raza and Haider both appeared in January as expert witnesses before the parliamentary committee on inflation.
Following his appearance, Haider said discussions about housing prices have "some but not much relevance to the ongoing discourse on inflation."
Conservatives, meanwhile, point out that housing prices in Canada surged by 33 per cent from March 2020 to November 2021 — something the party blames on what it calls the federal government's reckless spending during the pandemic.
The price of the average Canadian home hit $713,500 in December 2021, according to the Canadian Real Estate Association (CREA).
"The inflation in house prices followed the government printing about $400 billion of new cash, dumping it into the financial system, much of which was lent out in mortgages," Conservative finance critic Pierre Poilievre told CBC News.
"More dollars chasing fewer goods means inflation, and in this case, housing inflation."
Poilievre said that what he calls Canada's housing bubble is set to burst if no change is made to government policy.
In an email to CBC News, a spokesperson for Finance Minister Chrystia Freeland did not describe rising housing costs as the result of inflation. Freeland herself has consistently avoided Poilievre's attempts in the House of Commons to make her use that term.