Canada’s Housing Crisis: Understanding the Economic Impact and Proposed Solutions

“A young woman who’s got a biological clock obviously will do the math. You know, you start off at, let’s say you’re 25, well, you’re gonna be in your 50s before you can afford the average house. So how are you gonna ever gonna have kids?”

These sobering words from Pierre Poilievre, leader of Canada’s Conservative Party, cut to the heart of Canada’s housing crisis during his recent appearance on The Jordan B. Peterson Podcast (Episode #511, released January 2, 2025). In a wide-ranging two-hour discussion that has already garnered significant attention, Poilievre painted a stark picture of Canada’s economic challenges, with housing affordability taking center stage.

Understanding the Context

This conversation comes at a critical juncture in Canadian politics. Poilievre, who leads Canada’s Conservative Party and based on current polling could become Canada’s next Prime Minister, sat down with Dr. Jordan Peterson for their first discussion in two and a half years. The timing is particularly significant as Canada appears headed for a federal election sometime in 2025, with housing affordability emerging as a central campaign issue.

Dr. Peterson, a prominent Canadian psychologist and public intellectual, pressed Poilievre on specific details about Canada’s housing crisis and its broader economic implications. Their conversation, part of Peterson’s regular podcast series, offered a detailed examination of how Canada arrived at this crisis point and what solutions might be possible.

For those unfamiliar with Canadian politics, this discussion represents more than just another political interview – it provides a potential preview of how the country’s next government might approach these challenges. As Poilievre revealed during the podcast, he has conducted over 600 events across Canada in the past year alone, giving him a unique perspective on how the housing crisis is affecting Canadians across the country.

In a revealing conversation with Dr. Jordan Peterson, Conservative Party leader Pierre Poilievre painted a stark picture of Canada’s housing crisis and its deep connection to broader economic challenges. The discussion highlighted how housing affordability has become not just a social issue, but a fundamental economic threat to Canada’s future.

The Numbers Tell a Devastating Story

To understand just how severe Canada’s housing crisis has become, let’s break down some key numbers:

The Down Payment Challenge

In Toronto, Canada’s largest city, it would take an average income earner 29 years just to save for a down payment – not even the full house payment. For context, a down payment in Canada typically ranges from 5% to 20% of the home’s total value. This means:

• If you’re 25 years old when you start saving, you’d be 54 before having enough for just the down payment
• This timeline extends well beyond when most people hope to start families or achieve housing stability
• By comparison, in the 1970s, a typical Canadian family could save for a down payment in 5-7 years

What is a “Social Contract”?

Poilievre refers to a “breakdown of the social contract” – but what does this mean? Traditionally, the social contract in Canada (and most developed nations) meant that if you:

• Got an education
• Worked hard
• Saved money responsibly
• Followed society’s rules

You could reasonably expect to afford a home and maintain a middle-class lifestyle. This contract is now effectively broken, as even professionals with good jobs find themselves priced out of the housing market.

The Government’s Role in Housing Costs

One of the most eye-opening parts of the interview was Poilievre’s breakdown of housing costs in Vancouver, one of Canada’s most expensive cities. Let’s understand what this means for the average person:

Breaking Down the Costs

In Vancouver, a shocking 60% of a new house price comes from government-related costs rather than actual construction expenses. To put this in perspective:

For a $1.5 million home (about average in Vancouver):

• Approximately $900,000 goes to government-related costs
• Only $600,000 goes to actual construction, land, and profit combined

The Bureaucratic Burden

In practical terms, this means:

• More money goes to bureaucrats (government workers and administrators) than to the skilled trades workers who physically build the homes
• The combined wages of carpenters, electricians, and plumbers working on a home are less than the government-related costs
• Perhaps most ironically, these skilled tradespeople, despite being essential to building homes, can’t afford to live in the communities they help build

Real-World Impact

This creates a troubling scenario where:

• Construction workers often commute hours from more affordable areas
• Young people are discouraged from entering the trades
• Housing supply is artificially limited by bureaucratic costs
• Communities lose the economic diversity that helps them thrive

The Bureaucratic Burden

Poilievre illustrated how government inefficiency directly impacts housing costs:

• Excessive development charges
• Lengthy permit delays
• Multiple layers of taxation
• Consulting fees required to navigate bureaucracy
• Land transfer taxes
• Sales taxes

In Vancouver, this creates a staggering $1.2 million gap between the actual cost of building a home (including materials, labor, land, and developer profit) and the final sale price.

“In Vancouver more money goes to bureaucrats than goes to the carpenters, electricians and plumbers who build the place. And to add insult to injury, those tradespeople who build homes can’t afford to live in them.”

— Pierre Poilievre on the housing cost crisis

Economic Ripple Effects: How Housing Affects Everything

The housing crisis isn’t just about real estate – it’s creating widespread economic problems that affect all Canadians, even those who already own homes. Let’s break down these effects in simple terms:

Investment Flight

Canada has lost half a trillion US dollars in investment to the United States over the last decade. To understand what this means:

• That’s roughly $40,000 per Canadian that could have been invested in Canadian businesses and jobs
• This money represents jobs, business opportunities, and economic growth that went south instead of staying in Canada
• Even Canadian pension funds are increasingly investing in the US rather than Canada, seeing better returns there

The Productivity Problem

Poilievre points out that Canadian workers produce $50 of GDP (Gross Domestic Product) per hour compared to $80 in the US. In everyday terms:

• American workers produce 60% more value per hour than Canadians
• This means Canadians must work longer hours to achieve the same standard of living
• This productivity gap directly affects wages and living standards

A Startling Comparison

Perhaps the most shocking revelation is that Ontario, traditionally Canada’s wealthiest province, has fallen behind dramatically:

• Ontarians are now poorer per capita than residents of Mississippi, America’s poorest state
• This represents a dramatic reversal from just a decade ago when Canada’s middle class was considered more affluent than America’s
• The high cost of housing makes this even worse, as Canadians pay more for housing while earning less

“We have the biggest supply of uranium, fifth biggest supply of lithium, we’ve got not one, not two, not three but four coasts to tide water… We live next to the biggest military and economic superpower the world has ever seen, we have a highly educated population… We have all these massive advantages, we just need to unleash that potential.”

— Pierre Poilievre on Canada’s untapped potential

Proposed Solutions

Poilievre outlined several immediate actions he would take if elected:

1. Municipal Reform: Tie federal infrastructure money to municipal performance in:
   • Speeding up building permits
   • Reducing development charges
   • Freeing up land for development
2. Tax Relief: Remove the federal GST on new homes under a certain limit
3. Bureaucratic Reduction: Streamline the approval process and reduce regulatory burden
4. Provincial Coordination: Work with provincial governments to align housing policies

The Broader Vision

Poilievre argues that solving the housing crisis is essential to restoring what he calls “the Canadian promise” – the idea that anyone who works hard should be able to afford a good home in a safe neighborhood. He sees housing affordability as crucial to enabling family formation, community building, and economic prosperity.

Conclusion: What This Means for Everyday Canadians

The conversation between Peterson and Poilievre brings to light issues that affect every Canadian, whether they’re trying to buy their first home or worried about their children’s future in the country. Here’s what it all means:

The Big Picture

• Canada’s housing crisis isn’t just about high prices – it represents a breakdown in the basic promise that hard work leads to prosperity
• Despite having more land per capita than almost any other nation, Canada has some of the world’s least affordable housing
• The problems are largely artificial – created by policies and regulations rather than actual scarcity

What’s at Stake

For individual Canadians, this crisis means:

• Young people delaying family formation
• Professionals leaving Canada for better opportunities
• Increased household debt as people stretch to afford homes
• Growing wealth inequality between homeowners and non-owners

Looking Forward

Poilievre’s proposed solutions suggest a fundamental rethinking of how housing works in Canada:

• Removing bureaucratic barriers to construction
• Tying federal funding to actual results in housing
• Reducing the tax burden on new homes
• Encouraging development of Canada’s abundant land

Whether these solutions can be implemented effectively remains to be seen, but the conversation makes clear that Canada’s housing crisis has become a critical economic issue that will significantly influence the country’s future prosperity and social stability.

What You Can Do

As a Canadian citizen or resident, you can:

• Stay informed about housing policies in your area
• Engage with local government on development issues
• Support initiatives that promote responsible housing development
• Consider housing affordability when voting at all levels of government

The path forward requires both government action and citizen engagement to restore the promise of affordable housing for future generations of Canadians.

Final Thoughts: The Crossroads

Throughout the two-hour conversation between Peterson and Poilievre, one theme emerged consistently: Canada stands at a crucial crossroads. On one side lies the current path – what Poilievre describes as a system of “artificial scarcity” where bureaucracy, over-regulation, and government intervention have created a housing market that increasingly serves paper-pushers rather than people. On the other side lies his vision of a return to what he calls “the Canadian promise” – where hard work, responsibility, and ambition are rewarded with genuine opportunity.

The housing crisis, as revealed in this discussion, is not merely about real estate prices. It’s a symptom of a deeper malaise affecting Canadian society. When carpenters can’t afford to live in the homes they build, when young professionals must choose between starting a family and owning a home, and when Canada’s most affluent province has fallen behind America’s poorest state in terms of per capita wealth, fundamental questions must be asked about the direction of the country.

Perhaps most striking is Poilievre’s assertion that Canada’s problems are entirely political in nature. With the world’s third-largest oil reserves, abundant natural resources, highly educated population, and more coastline than any other nation, Canada’s current economic struggles appear to be self-imposed rather than inevitable.

This brings us to a profound question that every Canadian must consider:

If our nation possesses such abundant natural wealth, strategic advantages, and human capital, why have we accepted a system that makes basic prosperity increasingly unattainable for ordinary citizens?

The answer to this question – and more importantly, how Canadians choose to act on it – may well determine whether the next generation will still believe in the Canadian dream, or whether that dream will remain locked behind a wall of bureaucratic red tape and million-dollar down payments.

Watch The Full Interview On Youtube

– Kai T.