Housing crisis to take centre stage at Liberal cabinet retreat in Charlottetown

OTTAWA -

Prime Minister Justin Trudeau is set to deliver a new mission for his cabinet at a three-day retreat in Charlottetown this week, in a bid to restore Canadians' sense of economic security and their confidence in his government.

It is a very different cabinet from the one that last sat in the House of Commons, following a major shuffle in July. Seven of the 38 ministers were replaced entirely and 19 were given new files.

The housing affordability crisis will take on new levels of importance for the government, with a specific focus on younger Canadians whose early adult years have been dominated by the disruptions of COVID-19 and whose dream of even being able to afford to rent their own home is marred by rising costs.

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No big policy announcements are expected following the retreat, but ministers will be briefed by national experts on housing and youth with a view to guiding federal decision-making this fall.

Those decisions could include negotiating a national housing accord. Such a pact would bring all levels of government to the table, along with both not-for-profit and for-profit housing agencies, to build the estimated 5.8 million new homes Canada needs to restore affordability to the housing market by 2030.

The retreat comes as the Liberals' poll numbers continue to sink.

A cranky electorate left exhausted by the COVID-19 pandemic and its high-inflation aftermath is finding more appeal in the message from Conservative Leader Pierre Poilievre that under the Liberals, everything in Canada has been broken.

"They've enabled the space for the Poilievre narrative, and I think it is has taken hold in a few pockets. And I think they need to punch back," said Susan Smith, a Liberal strategist and co-founder of Bluesky Strategy Group.

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She said the government has to address the fact that the dynamic around Canada's economic situation has changed since the Liberals first came to office.

"The economic reality has shifted dramatically," she said.

Recent polls are showing the Conservatives have enough support that they are flirting on the edge of majority government territory, though an election is not imminent.

The Liberals have an agreement with the NDP to try to keep the minority Parliament working until 2025. While it may not last that long, there is no suggestion it will collapse in the next few months.

Particularly worrisome for the Liberals is their slip in support among younger Canadians.

That cohort voted in almost record numbers when Trudeau and the Liberals romped to a majority government victory in 2015, but it has been drifting further and further away from them in recent years.

An online survey by Leger at the end of July had the Liberals trailing the Conservatives by six percentage points overall, but by more than 10 points among 18- to 34-year-olds.

"The people who were the 18-year-old voters for the Liberals in 2015 right now may have young families or may be now entering the workforce, so definitely housing is an issue," said Smith, although she noted that housing is an issue affecting many different age groups.

While housing is an issue that crosses municipal, provincial and federal jurisdiction, Poilievre has been laying the blame for Canada's housing inequality at Trudeau's feet.

In a video posted online last week, Poilievre said wage growth has not kept pace with housing prices since Trudeau took office.

"The math does not add up," he said.

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Statistics Canada data show average weekly earnings across the country rose about 26 per cent since 2015, while the average purchase price of a home rose by more than 70 per cent.

Paul Kershaw, founder and lead researcher at the Generation Squeeze think tank at the University of British Columbia, has been asked to address the Liberal cabinet about ways to solve the economic despair many young people are feeling.

Tim Richter, president of the Canadian Alliance to End Homelessness, and Mike Moffatt, an economist and housing expert and founding director of the PLACE Centre at the Smart Prosperity Institute, are set to brief the cabinet on the housing issue specifically.

The two were among the three co-authors of a recent national report on housing. A senior Liberal source who spoke on the condition of anonymity to discuss matters not yet made public says the report is going to be a bit of a "task list" for the government on housing.

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Among the report's recommendations is a call for a national housing industrial strategy in concert with other levels of government and the private and non-profit sectors. It would set targets for housing and push for better data and research on population growth and housing needs.

The report also calls for housing production needs, like construction expertise, to be included in immigration and workforce planning, as well as for the elimination of federal sales taxes on the construction of new, purpose-built rental housing.

Moffatt said in an interview that his message to cabinet will mimic the recommendations in the report, and he sees the invitation to speak at the retreat as a "positive sign" they plan to follow through this time.

"I would think that if they didn't care what we said, they wouldn't want us out there talking to cabinet," he said.

The Liberal official said housing will be a critical part of the government's immediate policy planning, but that the overall messaging goes beyond housing.

He said the prime minister will repeat the message he gave ministers following the shuffle in July: At the end of every day, they should be able to explain what they did that day that made someone's life better.

This report by The Canadian Press was first published Aug. 20, 2023.

-- With files from Nojoud Al Mallees.