The crisis in housing not only affects low-income and vulnerable Canadians, but also the middle-class, who are increasingly turning to the rental market for affordable housing amid high house prices, inflation, and climbing interest rates, Romy Bowers, President and Chief Executive Officer of Canada Mortgage and Housing Corporation (CMHC) says.

Furthermore, with many economists forecasting a modest recession in mid-2023, and the ambitious immigration targets set by the federal government, there is an “urgency” to collaborate to look at housing affordability and the supply challenge, Bowers said at Scotiabank’s annual Affordable Housing Summit in a virtual discussion with Jake Lawrence, CEO and Group Head, Global Banking and Markets at Scotiabank.

“We need a truly all-hands-on-deck approach, and we need to stop pointing fingers and think about how we can all work together to solve a problem that is in the best interest of our country.”

CMHC, known for its mortgage insurance and securitization programs, is leading the delivery of the National Housing Strategy — a more than $82-billion investment over 10 years to increase the supply of affordable rental housing across the country. Aligning with CMHC, Scotiabank in 2021 committed to mobilizing $10 billion over 10 years to develop innovative lending, investing and underwriting solutions for retail, commercial and corporate clients who support the achievement of this important housing objective in Canada. 

In the recent conversation with Lawrence, who was chair of the Ontario Housing Affordability Task Force in 2021-22, Bowers shared what progress CMHC had made since she took the reins in April 2021, what’s holding back progress and what needs to be done to get the country on track to providing the housing we need now and in the future.

Romy Bowers headshot

Photo: Romy Bowers, CEO of CMHC 

JL: Housing is a long game and we’re not going to solve the challenges overnight. What are some of the key accomplishments in the past year plus made by CMHC that you’d like to highlight?

RB: I’m proud of the team that rolled out the third round of the Rapid Housing initiative. This is a supply side program that launched during the pandemic to meet the needs of the most vulnerable in our society that were adversely impacted by COVID. The initiative will support the creation of more than 14,000 permanent, affordable homes for those that are experiencing or are at risk of homelessness.

In addition, we’re working on the Housing Accelerator Fund that was announced in the last budget. It’s a $4-billion investment by the federal government to unblock barriers that prevent robust supply responses at the local level. 

On the commercial side, we launched MLI Select, a mortgage insurance product that offers incentives to developers to create more affordable, accessible and climate-compatible rental housing. In 2022 alone, since the launch of the product, we’ve supported the financing of 86,000 new and existing rental units. 

JL: In 2022, Canada welcomed a record number of immigrants, and the federal government has made a significant commitment to continue to increase immigration. How should we be adjusting housing policy strategies to meet the demand of new immigrants coming to Canada?

RB: Increased immigration shows that our economy is vibrant and that people from all over the world want to live here, which is a great story. Newcomers provide businesses with labour and expertise to drive economic growth. In the construction industry, in particular, there is a serious lack of people in the trades, and immigration could address some of these shortages. 

Canada’s very ambitious immigration targets underscore the importance of looking at housing affordability and the housing supply challenge with absolute urgency. We’re inviting immigrants into our country, and we need to be able to welcome them. We can’t do that unless we have sufficient supply of housing. It’s incumbent on all of us to ensure that we’re working together to create the right supply. This is particularly true in Ontario and B.C., where the bulk of immigrants choose to live.

JL: How are you tracking progress, measuring success in reporting on the implementation of the national strategy? What are some of the key milestones?

RB: I’m a public servant and I’m very aware that the resources are from taxpayers, that they are scarce and that we need to be accountable for how we use them. We track and report on our progress on a quarterly, annual and triennial basis on our website. There’s also a website devoted to the National Housing Strategy called Place to Call Home, where we can see our progress across all NHS initiatives, including the number of units created and their locations. We update the website every quarter. Our objective is to create transparency to ensure that Canadians understand where their tax money is going to and who is benefiting from the government investments.

We’re about halfway through the National Housing Strategy and we’ve committed half of the funding and are on track to fully commit it over the remaining years of the program. We’ve financed approximately 115,000 new units of housing and we’re on track to repair about 270,000 existing units, but we know much more needs to be done.

JL: Housing affordability challenges have spread to the middle class, impacting nurses, teachers, firefighters, office workers, people that are key to the fabric of the communities. This was a theme we identified in the Housing Affordability Task Force — how the change in housing affordability drives certain capabilities, certain types of people out of communities. Now, we’ve got higher interest rates, and that’s impacting all parts of the housing complex, whether it’s purchases or rental. How are you seeing things evolve with respect to that issue?

RB: Things are at a crisis point for the middle class, but also particularly for vulnerable Canadians. Inflation is still not under control, the Bank of Canada is increasing interest rates and many economists are forecasting a modest recession for the first half of 2023.

Many households, especially first-time buyers, are taking on debt that is excessive. That’s a real concern, especially during an economic downturn because when people are highly leveraged, it creates a lot of instability in the economy, but also pain for households. When you think about house prices in Toronto and Vancouver, 20 years ago, the average price was four times the average income. Today it’s eight, nine, 10 times that.

On a more positive note, mortgage arrears are still really low, employment growth is still strong, but we are monitoring that closely. We have seen an uptick in credit card and auto loan arrears — usually the early signs of more stress in the mortgage market — but we’re hoping that that’s not going to become more serious.

The bottom line is we need more supply. We need choice across all price points, across the housing continuum. That’s the only way we’re going to have a well-functioning housing system. As a society, we need to think about how to make housing affordable for all Canadians. And it will require different solutions.


We need choice across all price points, across the housing continuum. That’s the only way we’re going to have a well-functioning housing system. 

Romy Bowers, Chief Executive Officer of CMHC

JL: Talking about that continuum, affordable housing and housing affordability are often confused, and sometimes used interchangeably. I think we both appreciate they’re not the same thing, but they do have a lot of interplay. How important is the relationship between them?

RB: When people talk to us about a housing crisis, we always try to think about the housing crisis from two perspectives. The first is that there is a huge crisis for the most vulnerable in our society. People who are struggling to have even the basic housing needs met because of lack of affordable social or community housing.

In a recent report about the affordability crisis in Canada, Rebekah Young, VP & Head of Inclusion and Resilience Economics at Scotiabank, said that the moral case to urgently build out Canada’s anemic stock of social housing has never been stronger. The economic case is equally compelling. I think we have underinvested as a country in social housing to meet the needs of the vulnerable in our society.

Canada has one of the lowest levels of social housing stock in the G7. This is a result of policy decisions made decades ago. In Canada, the private sector provides over 95% of the rental housing in Canada, but there’s very little incentive to provide housing for those in the bottom quintile of income distribution who can only afford rents of $700, $750 a month. There needs to be much more collaboration between the private sector and government to ensure that rental units at this price are available to those most in need.

The second crisis is that middle-income people are finding it increasingly difficult to find market housing, especially in large cities. And you’re right, the two are connected. The middle class are effectively competing for housing units with the people who are most vulnerable in society, and you can see the outcome in the rise of homelessness in many of our communities.

This conversation was edited for length and clarity.

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