Closing door to newcomers won't fix housing crunch, says new federal housing minister

Canada's new housing and infrastructure minister says closing the door to newcomers is not the solution to the country's housing woes, and has instead endorsed building more homes to accommodate higher immigration flows.

Sean Fraser, who previously served as immigration minister, was sworn in Wednesday morning as part of a Liberal government cabinet shuffle aimed at showcasing a fresh team ahead of the next federal election.

He comes into the role at a time when strong population growth through immigration is adding pressure to housing demand at a time when the country is struggling with an affordability crisis.

"The answer is, at least in part, to continue to build more stock," Fraser told reporters after being sworn in.

"But I would urge caution to anyone who believes the answer to our housing challenges is to close the door on newcomers."

Instead, the minister said immigration would be part of the solution to the housing challenge.

"When I talked to developers, in my capacity as a minister of immigration before today, one of the chief obstacles to completing the projects that they want to get done is having access to the labour force to build the houses that they need," he said.

Prime Minister Justin Trudeau's decision to hand over the federal housing file to the Nova Scotia MP has been praised by experts who say that the Liberals need a strong communicator in charge as Canadians deal with an affordability crunch.

As part of the shakeup, the housing file has been merged with infrastructure and communities. Fraser said the goal is to look at housing and infrastructure projects together, rather than in isolation.

"If we encourage cities and communities to build more housing where infrastructure already exists or where it's planned to be, we're going to be able to leverage more progress for every public dollar that's invested," he said.

Ahmed Hussen, who became housing minister in 2021, has faced criticism for his handling of the file as the housing crisis worsened across the country.

Hussen is staying in cabinet as minister of international development.

"The selection of Sean, I think, is a recognition that the job requires fundamentally an energy and urgency and a passion in order to be able to effectively compete with the message that (Conservative Leader) Pierre Poilievre has put forward," said Tyler Meredith, a former head of economic strategy and planning for Trudeau’s government.

Meredith said the choice to shift Fraser from immigration to housing also signals the federal government knows the two files are linked.

"If they lose the argument on housing, they will lose the argument on immigration, and they will then lose what is frankly, some of the some of the most effective pieces of their economic strategy," Meredith said.

Canada's population grew by more than one million people in 2022, a pace that experts say is adding pressure to housing demand. That, in turn, pushes up prices even further.

A recent analysis by BMO found that for every one per cent of population growth, housing prices typically increase by three per cent.

The Liberals have been taking a lot of heat from Poilievre for the state of the housing market. He's blamed Trudeau's government for the crisis, as well as municipal "gatekeepers" for standing in the way of new developments.

Poilievre has focused on the need to build more housing and has not weighed in on whether Canada needs to change the number of people it lets into the country.

The Conservative leader has also been particularly focused on speaking to young people struggling with affordability, commonly referring to the "35-year-olds still living in their parents' basements" in the House of Commons.

Fraser, 39, acknowledged during the news conference that housing affordability is a major challenge facing younger Canadians in particular.

"It's a real challenge for people my age and younger who are trying to get into the market, but it's also a challenge for low-income families," Fraser said.

"There's no simple solutions, but if we continue to advance measures that help build more stock, that help make sure it's easier for people to get into the market and make sure we're offering protections for low-income families, particularly in vulnerable renting situations, we're going to be able to make a meaningful difference."

The housing crisis that once was associated with Vancouver and Toronto is now affecting all corners of the country, and experts say a shortage of homes is at its root.

The Canada Mortgage Housing Corporation has warned the country needs to build 3.5 million additional homes — on top of the current pace of building — to restore affordability by 2030.

Carolyn Whitzman, a housing policy expert and adjunct professor at the University of Ottawa, said the decision to combine housing and infrastructure is a good move.

"Housing is infrastructure. It's essential, as essential as water and sewers and hospitals and schools, for the functioning of a society," she said.

Whitzman also called Fraser a "fairly effective communicator" and noted his experience as immigration minister may also help inform his role in the housing file.

This report by The Canadian Press was first published July 26, 2023.