Racism and xenophobia won't fix the Canadian housing crisis

Racism and xenophobia won't fix the Canadian housing crisis
City of Toronto workers clear a homeless encampment. (R.J. Johnston/Toronto Star via Getty Images)

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by Matthew McCreadie

The day that the Canadian Federal Budget was announced last April, a man was crushed to death in the back of a recycling truck. The 52-year old was seeking shelter in the city of Penticton, BC. That same day, the Victory Church shelter downtown closed following a lawsuit from the municipality citing infractions. The new shelter that opened to replace it, further away from Penticton’s precious downtown businesses, didn’t have enough rooms to go around.

“Deaths of this kind are not uncommon,” the CBC noted. “Others have died while seeking shelter in recycling bins or clothes donation bins.”

Later that day, Chrystia Freeland, the Federal Finance Minister, said that housing is the "most pressing economic and social issue in Canada today.” She went on to present a budget that included a $500 one time payment for people struggling with housing affordability. A generous offer of one quarter of the average one month’s rent in Canada. It also included a $560 million two year commitment to “Reaching Home,” the Canadian Homelessness Strategy. For comparison $560 million is the highway roadworks budget for Canada’s second smallest province. $560 million is how much we pay in salaries for uniformed cops in a single year for the City of Toronto alone.

To be fair to the federal government, they had a more pressing issue on their minds than the unhoused: namely, foreigners driving up real estate prices. The big, sweeping announcement made in the budget was a complete ban on the purchase of residential property by non-Canadians, a move supported by all three major Canadian political parties. Andrea Horvath, who leads the Ontario branch of the furthest “left” of these parties, was “optimistic” it would help the housing crisis she said.

On December 24 of last year, a person seeking shelter on the streets of Toronto froze to death. Advocates speculated that they were turned away from one of Toronto’s shelters due to lack of space. On average, 168 people are turned away from Toronto’s shelters every day.

That same day the Federal Government announced the form the new ban would take, claiming once again that it would help reduce soaring house prices. Immediately realtors and real estate lawyers began to voice their protest. The act placed the responsibility of enforcing this ludicrous new ban directly on the shoulders of the realtors and lawyers enacting the transfer, requiring them not only to determine the nationality but also the legal residential status of every potential home purchaser. Worse, there was no guidance whatsoever offered on how they were supposed to go about enforcing the vaguely defined new rules, and if they screwed up they faced a $10,000 fine for each transaction that was found to be in violation. Administratively, the bill was set to be a nightmare before it even began.

In January of 2023, a man burnt to death in Liberty Village, Toronto. He lit a fire to try to stay warm enough to survive the night. The city only has three warming centers to serve an unhoused population that is over 10,000 on any given night, where temperatures regularly drop to below -20 celsius in the winter.

Every news report that I could find on the man’s death reported that the cell tower itself did not suffer serious damage.

The  "Prohibition on the Purchase of Residential Property by Non-Canadians Act" came into effect on January 1 of this year. Thirty-four percent of all residences in Canada are part of apartment buildings, but the ban does not cover them, only the purchase of buildings with three or fewer residential units.

Twenty percent of all apartments in Canada are owned by Canadian-registered real estate investment corporations, but the ban does not cover them either, only foreign individuals and non-Canadian Corporations.

Rents across Canada rose faster in 2022 than any period in the past twenty years, but the ban is only concerned with new purchases. The percentage of real estate that is currently owned by individuals that would be covered under the bill is less than 2%.

It is now February 2023, and the impact of the act has been, predictably, negligible. House prices have been unaffected by its introduction, and rent has only continued to increase. Of course, the politicians who proposed and debated and wrote and enacted the law likely knew this would happen. Not only did they have access to all the statistics above, they’d also tried the same exact thing before. Ontario introduced a “Non-resident Speculation Tax” in 2017, charging an additional 15% on homes bought by people who didn’t live in Canada. In the years following this move, house prices in Ontario reached record highs, completely unaffected by the tax. British Columbia tried the same tax in 2016 with the exact same results.

Logically and historically, this thing just does not work. It does, however, play into a very popular narrative in Canadian culture: anti-Asian racism.

The narrative that “foreign money” (read: Chinese people) is what drives up Canadian house prices has always been a lie. It was a lie in 2016 when Vancouver introduced its tax, it was false in 2017 when Ontario did the same thing, and it’s still false today. But blaming the largest and fastest growing visible minority in the country has always been a popular tactic, especially in recent years, when anti-Asian hate crime in some areas of Canada has grown by over 700%. The narrative of rich Chinese parents buying their kids homes in Toronto or Vancouver, or Indian businessmen purchasing multiple houses for their families to live in is as popular in mainstream Canadian media as it is in my local Tim Hortons, and the government are happy to play into it rather than address the real issues facing Canadians today.

The insanely frustrating part about all of this is that actually helping the people affected by the housing crisis would be much simpler and cheaper than enacting a political boondoggle like the Non-Canadians Act. Every single province has an automatically applied Land Transfer Tax, which is digitally calculated and applied to single real estate transfers. A small legislative amendment could make this tax progressive; increasing with the amount of real estate holdings the transferor owned. Overnight, this could significantly change the way homes are treated as commodities to be traded, allowing actual people to actually live in them.

Alternatively, almost every province in Canada had, at one stage, actual helpful protections for tenants. For Ontario, this took the form of effective rent control, preventing landlords from raising rents beyond a certain percentage every year. For a brief but glorious period between April 2017 and November 2018, this applied to all privately owned residential units. In almost every case, simply rolling tenants protections back to their pre-2015 status would literally save lives.

But enacting these measures would require the government starting to look at housing in a radically different way. Because while there have been many other housing initiatives, acts and bills passed between that tragic death in Penticton in April and now, all of them share the rationale of the ineffective, ridiculous Non-Canadian Act. The Federal “Rapid Housing Initiative”, Ontario’s “More Homes Built Faster Act” and BC’s “Housing Supply Act” don’t deal with people, or shelter, or homes, they deal with The Housing Market, an intractable, unknowable force that can only be bargained with. They can placate it with tax incentives or bureaucratic streamlining, they can play into well-placed narratives of Low Supply or Foreign Buyers or Too Much Immigration, but they can’t risk upending it entirely. The idea of tearing the whole thing down, of forcing corporations and landlords to allow housing to be thought of as a shelter, as a home first and not an investment is too dangerous. Instead we’ll keep feeding people to the market, hoping that this time we’ll satisfy its hunger.

Matthew McCreadie is a freelance writer and dad based in Ontario.