Over $300 billion more must be invested to achieve Ottawa’s housing affordability goals, according to a report published by Canadian public policy research and educational organization the Fraser Institute.
The report estimated that additional funds of $331-$364 billion are needed annually from 2025 to 2030 for the federal government to hit its housing construction goal. The Canadian Mortgage and Housing Corporation, a Crown corporation under the federal government, estimated that about 3.5 million more housing units must be built by 2030 to achieve housing affordability.
The estimate was calculated at anticipated construction rates.
“To increase home building and restore business investment in key areas like technology to previous levels, Canada needs to become much more attractive to investors, both from within Canada and around the world,” said Steven Globerman, Fraser Institute senior fellow, in a statement.
Moreover, an additional ~$13 billion is needed to restore business investment in critical areas like communications and IT to previous levels. The report indicated that overall, the country requires $343 to $377 billion more in annual funds over the next five years.
The Fraser Institute explained that this was tantamount to a 50 percent increase in the current Canadian savings rate. To mitigate the need for such a boost to the domestic savings rate, Canada must attract more foreign investors, which would in turn require significant policy amendments to increase the country’s appeal to investors.
“It is very likely that the ambitious targets that have been set for homebuilding and business investment won't be met, but even so, encouraging increased investment and higher domestic savings is a worthy policy pursuit,” Globerman said.
The Fraser Institute has offices in Vancouver, Calgary, Toronto, Montreal, and Halifax. As an independent organization, it does not take government grants or research contracts.
Earlier this month, the Fraser Institute also estimated that Canada must construct 840 solar-power generation stations of a certain size to hit Ottawa’s 2050 emission-reduction target.