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Housing Problem in Canada Research Paper


The idea of public housing in Canada can be traced as far back as 1938 when the national housing Act was passed. Public housing is a government subsidized program for the low income and the un-housed individuals and their families.

A total of 5% of the Canadian households live on the social housing program, representing the smallest social housing sector in any developed country with the exception of the United States of America (Hombs 2011 120).

The Canadian housing system is unique compared to other developed countries in the world. Unlike other developed countries, it solely relies on the market mechanism for allocation, provision and maintenance of the housing. That is why the public housing has presented a big problem to all the players. A housing system based on the market forces is not responsive to the social needs (Hulchanski 2009 98).

The federal government has defined affordable housing as any rent or housing cost that is 80% of gross market rent or less. Many have argued that the definition should be based on household income and not the market rent.

Most of the poor people live in housing that is either over crowded, substandard or unaffordable to them. The poor housing in Canada as defined on the level of affordability or the people’s ability to find affordable and quality housing is very important as far as their health is concerned and it is a measure of the country’s states of social infrastructure (Quarter, Mook and Armstrong 2009 85-102).

  1. Mary Hombs. Modern Homelessness: A Reference Handbook. (Washington, DC. ABC-CLIO). 2011) 120.
  2. David J. Hulchanski 2009. Finding Home: Policy Options for Addressing Homelessness in Canada. (New York. The homeless Hub Publishers. 2009) 98. Experts say affordable housing should not exceed 30% of the household income.
  3. Jack Quarter, Laurie Mook and Ann Armstrong. Understanding the Social Economy: A Canadian Perspective.( Toronto. University of Toronto Press. 2009) 102.
  4. Lack of access to adequate and affordable housing is a serious problem which leads to poor health for many, and contributes to the invasive but avoidable health inequalities among the citizens (Hulchanski 2009 104).

The Historical Development

The mortgage and the insurance institutions were created by the federal and provincial governments many decades ago. The Municipal governments provided the land service and the zoning regulations that give permission to construction of relatively cheap housing subdivisions.

From as early as 1970, there has been a steady rise in house purchase assistance programs which have maintained Canada’s house ownership at a rate of approximately two-thirds. In 1963, the federal government introduced the joint provincial and funding program (Hombs 2011 129).

Later in the 1970s, this program was replaced with the centralized and community based program, almost 200,000 housing units had been built, about 2% of Canada’s present housing stock. This was a modest housing program because of its objective policy which was broad in nature was to leave the housing system to the market dynamics as much as possible.

The Canada Mortgage and Housing Corporation CMHC which was founded in 1946 mainly focused on making the mortgage market to work for the house buyers and for the private investors in the rental housing.

  1. David J. Hulchanski. Finding Home: Policy Options for Addressing Homelessness in Canada. (New York. The homeless Hub Publishers. 2009) 104.
  2. Mary Hombs. 2011. Modern Homelessness: A Reference Handbook. (Washington, DC. ABC-CLIO 2011) 129.

In 1954 it saw the creation of the federal Mortgage Insurance Fund; this was to encourage banks to enter into the risky market of mortgage lending. One of the CMHC‘s major functions has been to manage this funds.

The history of the role of Government’s housing policy in Canada has been an effort aimed at the ownership of the housing. All along these policies has been seen as one sided, only aimed at assisting the homeowners and not the renters, and there was no policy of tenure neutrality (Hombs 2011 137).

To own a house is a long term investment plan that helps to maintain a certain standard of living over the life of an individual. Over half of the Canadian owners who have paid off their mortgages spend about 11% of their income on housing, implying that they have more disposable income.

Besides, a large and expensive house can also be traded in for a small house which is less expensive and some money could be freed up or even a negotiation of a reverse mortgage that will provide a regular annuity payment to the owner (Sewll 1994 107).

The present Canadian housing system has been the way it is because of the history of the government’s activity and the ongoing role of different levels of government in supporting the Canada’s market oriented approach to supplying, allocating and maintaining the stock of national housing plan. The home ownership in Canada’s housing system has also benefited the well financed and the sympathetic to politicians and the bureaucrats.

  1. John Sewll. Houses and Homes: Housing for Canadians. (Toronto. James Lorimer & Company 1994) 107.
  2. Mary Hombs. 2011. Modern Homelessness: A Reference Handbook. (Washington, DC. ABC-CLIO 2011) 137.

Canada is one of the few developed countries that does not have a proportional representation in the electoral system, this imply that a broad range of interests and groups cannot win a fair share of seats in the legislature.

Lack of tenure neutrality over time has not improved or has worsened. On average, the homeowners have almost doubled the income of renter households. This only means that the government support will flow to the richer homeowners and not the poor tenants.

Besides, the figures that support this imbalance are rarely reported by the government, the politicians or the public servants. For instance the Canadian Mortgage and Housing Corporation show that more individual homeowners were helped through the mortgage insurance in a single year than all the social housing units funded in a period of over 30 years.

In 2005 the CMHC reported to have subsidized about 7,000 new housing units compared to 633,300 homeowners who were under the public mortgage insurance system, and the trend has been the same all along.

In 2008, the federal government reported to have spent $ 76 million on Affordable Housing Initiative for the new subsidized housing and it didn’t mention almost $6 billion in tax revenue not collected from the sale of houses by the homeowners, because of the move taken many years ago not to tax any capital gains on the residence of homeowners. There is absolutely no tax subsidy for the Canadian who rent (Hombs 2011 139).

The Growing Gap

In the Canadian households there has been a growing gap between the poor and the rich and it has manifested itself in the housing system.

  1. Mary Hombs. 2011. Modern Homelessness: A Reference Handbook. (Washington, DC. ABC-CLIO 2011) 139.

The social need for housing mainly exists among the poor tenants who cannot generate an effective market demand. The public policy since the 1980s have always benefited the ownership sector and on the other hand worsened the situation in the rental housing sector, resulting in widespread homelessness among the poor.

It has been found that homelessness is a result of a socially sanctioned activity and practices that are intended to achieve certain government policies. Therefore, homelessness is not a natural phenomenon but actually a by product of housing system policies in place (Sewll 1994 126).

It is estimated that 8% of Canadians live in houses that require major repairs and about 5% live in overcrowded dwellings. This implies that about 20% of those who rent their premises, compared to 10% of those who own their houses, live in housings that either needs serious repairs or is overcrowded.

It even becomes worse when it’s realized that homeowners spend only 18% of their total income on housing compared to 28% of those who rent their houses. This indicates how the housing tenure has divided the Canadians into two groups of the advantaged and the disadvantaged.

It is estimated that the homeowners have approximately twice the income of those who rent their premises. The homeowners have almost a quarter a million dollars in assets and the renters on average have approximately a thousand dollars in savings. This shows the disparity between the renters and the homeowners, despite the two groups being in the same housing market and the gap has worsened over recent years.

  1. John Sewll. Houses and Homes: Housing for Canadians. (Toronto. James Lorimer & Company 1994) 126.

Studies show that in the late 1960s, the income gap between the homeowners and those who rent their premises was about 20% and by 1999 the gap had increased to 208%. Besides, the wealth of the homeowners in 1999 had increased 70 times since 1984 compared to renters whose wealth had increased 29 times.

Housing tenure and poverty have been found to be closely connected (Hombs 2011, 180).The possibility of building more rental houses in Canada has reduced because of the changes in the municipal zoning for the public rental housing. Before the introduction of condominium ownership all areas zoned for medium and high residential density were the rental districts.

The low density zone was associated with homeowner housing, but since the passage of provincial legislation which created the condominium system of ownership, the rental housing providers have entered into competition with the condominium providers for the zoned building sites.

This has been another case of the problem presented to the housing system in Canada. This means that the rental only zone has been lost and this makes it difficult for the investors to build houses for the renters, the Condominium developer can easily outbid a potential developer for rental housing because of the high income of homeowners (Hulchanski 2009 130).

The market forces of demand and supply always works in favor of the homeowners and the renters are perpetually disadvantaged, the sector has become extremely exclusive in that some households are unfairly excluded from accessing the housing in the country (Hulchanski 2009 140).

  1. Mary Hombs. 2011. Modern Homelessness: A Reference Handbook. (Washington, DC. ABC-CLIO 2011) 180.
  2. David J. Hulchanski. Finding Home: Policy Options for Addressing Homelessness in Canada. (New York. The homeless Hub Publishers. 2009) 130 & 140 Bureaucracy

The government bureaucracies has been another problem in the Canadian housing system, the government at all the three levels are continually making decisions that affect the housing. An example in the past concerns the efforts to create an inclusive system and the jurisdictional issue have always come to the forefront, concerning which level of government ought to be responsible for what role in the housing system.

Recently when the federal government proposed some constitutional changes touching on the housing, the urban affairs and the municipal were two among other six sectors given as exclusive provincial domains, simply because they were seen as properly responsible in the affairs of the provinces.

In 1996 the government announced the transfer of the federal social housing programs to the provinces and territories, which ended several decades of direct involvement of the federal government in administration of the program.

This decision handed down the responsibility to the provinces and some of the provinces handed the responsibility further down to the municipalities. The federal transfer of cash to the provinces has been falling since early 1980’s.

Large sums of monies that were transferred to the provinces and the territories were withdrawn and used for education, health and other welfare programs. The reduction of transfer payments has made it very difficult for the provinces and the territories to replace the cut in social housing spending by the federal government (Hombs 2011 104).

  1. Mary Hombs. 2011. Modern Homelessness: A Reference Handbook. (Washington, DC. ABC-CLIO 2011) 104.

The federal government did not only cut the transfer payment to the provinces, but it also reduced the direct spending on the housing. Currently the federal government is spending approximately $2 billion annually on housing; this represents 1% of total federal spending.

This amount pays for the subsidies on social housing. Dismantling the supply of social housing program by the federal government, means that a huge responsibility lies with the provinces and the municipalities to bear both the direct and the indirect costs associated with homelessness and the inadequate housing.

These costs manifest themselves in the form of mental health care, emergency shelters and policing (Hulchanski 2009 148). The efforts by the municipalities to put in place the proper housing plans for its residents vary widely.

It has been observed that the voter turn out in the municipalities’ elections is always very poor with the majority voters being the homeowners who always demand for the attention of the city council concerning the zoning issues.

It has also been observed that the city council rarely votes consistently in favor of initiatives or programs that will benefit the poor in the long run within the community. The Municipalities can only do what their provinces allow them to do.

The federal government has showed no interest or seemingly failed in formulating a strategy for national urban housing, providing resources in a coordinated manner or understanding the impact of federal policies within the cities and the trends in the urban setting (Quarter, Mook and Armstrong 2009 112).

  1. David J. Hulchanski. Finding Home: Policy Options for Addressing Homelessness in Canada. (New York. The homeless Hub Publishers. 2009) 148. 5. The Municipalities
  2. Jack Quarter, Laurie Mook and Ann Armstrong. Understanding the Social Economy: A Canadian Perspective.( Toronto. University of Toronto Press. 2009) 112.

Dualism Policies

The differential treatment of homeowners and the renters has raised many questions and there has been no evidence that the government has made any clear progress towards ensuring an all inclusive and equitable housing system.

There have been arguments from some people that the Canadian housing system is a dualist system, where there are two separate and unequal housing system policies. One part which consist of about 80% of the households, which comprises of the homeowners and the tenants who live on the higher side of the private rentals in the market and the households who live in the cooperative housing.

These are the groups who enjoy a secure tenure and in good quality housing that meet their needs and the pricing is affordable to them. The second part comprises of the tenants who are poor and live in poor quality and poorly managed and subsidized housing.

The three levels of government appear to favor the ownership sector where it provides quality social housing to those who can afford and ignores those in low income rented houses. It is this type of dualism that shapes the Canadian housing programs and policies.

The first group of the housing system always receives enormous benefits in form of entitlements, which include government managed mortgage lending, special tax on capital gains, the government mortgage insurance program and other programs to assist in initial down payment in acquiring a new house.

All these benefits are coupled with superior amenities and community services. The low income earners on the other hand, if they ever receive any benefits, it is always selective and are at the bare minimum, these are the groups with no political clout.

John Sewll. Houses and Homes: Housing for Canadians. (Toronto. James Lorimer & Company 1994) 125.


Failing to maintain the rental properties leads to decay and finally loss of the once affordable housing in several communities, and lack of this affordable housing will push the citizens to social housing waiting list. This is what is being experienced all over Canada especially in the largest cities, where the rental stocks built in the 1960’s have been neglected to decay over the years.

The elevators are no longer working and rodents are allover. The living conditions in these buildings are so bad that tenants wish they could escape from the social housing (Hulchanski 2009 183).

Reference List

Hombs, Mary. Modern Homelessness: A Reference Handbook. Washington, DC. ABC-CLIO 2011.

Hulchanski, J. David. Finding Home: Policy Options for Addressing Homelessness in Canada. New York. The homeless Hub Publishers. 2009.

Quarter, Jack., Mook, Laurie and Armstrong, Ann. Understanding the Social Economy: A Canadian Perspective. Toronto. University of Toronto Press. 2009.

Sewll, John. Houses and Homes: Housing for Canadians. Toronto. James Lorimer & Company 1994.

This Research Paper on Housing Problem in Canada was written and submitted by user Alexandra Ayers to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly.

Alexandra Ayers studied at Auburn University, USA, with average GPA 3.51 out of 4.0.

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Ayers, Alexandra. "Housing Problem in Canada." IvyPanda, 28 Mar. 2019,

1. Alexandra Ayers. "Housing Problem in Canada." IvyPanda (blog), March 28, 2019.


Ayers, Alexandra. "Housing Problem in Canada." IvyPanda (blog), March 28, 2019.


Ayers, Alexandra. 2019. "Housing Problem in Canada." IvyPanda (blog), March 28, 2019.


Ayers, A. (2019) 'Housing Problem in Canada'. IvyPanda, 28 March.

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