Canada’s housing market is in a state of crisis, according to a new report from economists at Desjardins, who outlined actions that each level of government and industry players could take to help increase supply. 

The report, released Tuesday, highlighted that while there is no “silver bullet” to solve the nation’s housing crisis, a combination of policies will be needed to ensure the pace of home building accelerates. While it is generally understood that outsized increases to housing supply are needed, the report said there is less of a consensus regarding the path forward. 

At the federal level, the report said it is crucial to provide incentives to construct homes and that a “Housing Accelerator Fund” would be a “good start,” but not sufficient as a stand-alone solution. 

“The government of Canada must also ensure population growth advances at a pace that is sustainable and doesn’t further erode housing affordability. Prioritizing immigrants with skilled trades training would help offset the aging workforce in construction,” the report said. 

The authors noted that other actions the federal government could take to ease Canada’s housing crunch might include eliminating GST and HST taxes for “purpose-built rental construction.”

“At the provincial level, giving municipalities the freedom to introduce measures that will support an acceleration of residential investment in their communities would help considerably,” the report said. 

Additionally lowering development charges on certain categories of housing could have a positive impact, but the authors highlighted that municipalities should not have to offset those costs. 

Short-term rentals should also be addressed, the report said, and Quebec’s provincial licensing system could act as an example for other regions in Canada to follow. 

“And given municipalities are creatures of the provinces, a carrot-and-stick approach should be used to persuade all level of government to get shovels in the ground,” the team of economists said. 

While some individual communities have made progress in addressing the supply of housing, the authors said more action is needed to “reduce barriers to home building, such as scrapping exclusionary zoning.” 

Additionally, the team of economists highlighted that best practices from across the country and the world should be shared. 

As higher interest rates and input costs weigh on the construction sector, the team of economists said that the government could invoke policy to offset those costs with things like lower taxes or subsidies.

Additionally, the construction industry could also be doing more to address the nation’s housing supply issue like utilizing preapproved plans available through municipalities, the report said.

According to the Department of Finance Canada, the government has introduced a number of measures to improve housing affordability in Canada over the past few years.

Some of these measures include the Tax-Free First Home Savings Account (FHSA), doubling the First-Time Home Buyers’ Tax Credit to up to $1,500 and launching a $4 billion Housing Accelerator Fund with a goal of 100,000 net new units. 

On Tuesday, The Canadian Press reported that Canada’s federal cabinet is believed to be discussing the national housing strategy at a cabinet retreat in Charlottetown. Discussions are expected to include potentially holding a national housing summit with various levels of government as well as the private sector to alleviate the nation’s housing crunch.