In Canada affordability is one of three elements (adequacy, suitability) used to determine core housing needs.[1] A commonly accepted guideline for housing affordability is a housing cost that does not exceed 30% of a household's gross income. When the monthly carrying costs of a home exceed 30–35% of household income, then the housing is considered unaffordable for that household. Determining housing affordability is complex and the commonly used housing-expenditure-to-income-ratio tool has been challenged. Canada, for example, switched to a 25% rule from a 20% rule in the 1950s. In the 1980s this was replaced by a 30% rule.[2] What should be included in 'housing' costs: taxes, insurance for owners, utility costs, rent, maintenance and/or furnishings? What is meant by 'income': gross or net, one or all adults' income, children's income if any? How do sharp temporary fluctuations in income and non-cash sources of goods and services get factored in?

Housing Affordability Index

Accurate measurement of housing affordability is needed to decide if a family qualifies for assistance in housing or for a mortgage to purchase privately. While the 30% rule may be used for the latter, banks and lending agencies might require a much higher Qualifying Income before approving a mortgage. The Royal Bank of Canada Housing Affordability Measure describes a qualifying income as "the minimum annual income used by lenders to measure the ability of a borrower to make mortgage payments. Typically, no more than 32% of a borrower’s gross annual income should go to ‘mortgage expenses’ — principal, interest, property taxes and heating costs."[3]

Affordability Problem

Housing continues to be affordable to higher income families in Canada.

CMHC deemed that 20% of Canadian households (1.7 million households) were in core housing need. These households could not find adequate and suitable housing without spending 30% or more of their pre-tax income. CMHC found that a disturbing 656,000 households (7%) spent at least half of their before-tax income on shelter in 1996, up from 422,000 households, or 5%, in 1991. While accounting for only 35% of all households, almost 70% of those in core need were renters. [1]

The United Nations Committee on Economic, Social and Cultural Rights issued a "highly critical and detailed report on the Canada’s social policies in its 1998 review of Canada’s compliance with these rights (United Nations, 1998) particularly about disastrous levels of homelessness. [4][5] [6]

The mayors of Canada’s largest cities, declared the lack of affordable housing a national housing disaster in 1998. The federal government responded by announcing cost-shared conditional federal-provincial initiatives to construct affordable housing, worth $1 billion. However, during this period of tax cutting and debt reduction initiatives, the devolution of federal responsibilities to the provinces, without an accompanying transfer of funds, made it impossible for the provinces to contribute their share for affordable housing projects. Provinces were focused on reducing government size and increasing provincial tax cuts.[7]

According to Rudy Pohl writing in 2001:

Canada alone holds the dubious distinction of having received the strongest rebuke ever delivered by the United Nations for inactivity on homelessness and other poverty issues. In 1998, the United Nations Committee on Economic, Social and Cultural Rights maintained that Canada’s failure to implement policies for the poorest members of the population in the previous 5 years had "exacerbated homelessness among vulnerable groups during a time of strong economic growth and increasing affluence" (p. 15). The irony was that this rebuke was given in the midst of Canada having been named for several years in a row as the best country in the world in which to live.[8]

Armine Yalnizyan (2006) pointed out that 1.7 million Canadians of a total population of 31 million were underhoused or non-housed (Canadian Housing and Renewal Association). That’s 5.5% of the Canadian population without safe, decent and affordable housing.

Causes and Consequences of the affordability problem


Lack of National Housing Strategy

Too many low-income households in Canada

One of the major causes of the affordable housing problem is the number of low-income households in Canada who are also subject to provincial and federal claw backs and taxbacks, for example, on back to work and the federal-provincial National Child Benefit (NCB).[9]

A Toronto Dominion report (2003) recommended that government initiatives should be focused on raising market incomes at the lower end. This would be more effective than the inefficient, expensive, publicly-funded expenditure-based or tax-based incentives to increase the number of affordable rental units.[9]

Devolution of Responsibility without Corresponding Funds to Municipalities

Role of urban planners

Some blame the problems of affordability of housing on over zealous municipal land planning. Randal O'Toole of a Fraser Institute in his report entitled "Unliveable Strategies: The Greater Vancouver Regional District and the Liveable Region Strategic Plan" argued that the CVRD's land use planners "left the region with the least affordable housing and some of the worst traffic congestion in Canada". [10] He concluded that Greater Vancouver Regional District planners in 1996 "Livable Region Strategic Plan" (1996) were too narrow in their focus on "avoiding urban sprawl and minimizing automobile driving." He also argued that the protection of green spaces, farm lands from development limited growth and was the cause of the escalation of prices. [11]

Consequences of the affordability problem

Health Issues Related to Lack of Affordability of Housing

A Conference Board of Canada 2010 report entitled "Building From the Ground Up: Enhancing Affordable Housing in Canada" argued that the shortage of affordable housing was "having a detrimental effect on Canadians’ health, which, in turn, reduces their productivity, limits our national competitiveness, and indirectly drives up the cost of health care and welfare." Stress, asthma, and diabetes are connected to inadequate housing.[12]

Public Policy and Tools

National Housing Strategy

Canada is only major country in the world [13] (and the only G-8) nation that lacks a National Housing Strategy) [5] There is no coordinated strategy on affordable housing either. Housing initiatives have been introduced and funded by the federal, provincial, territorial and municipal governments, along with civil society organizations (including the charitable sector).[5]

A detailed plan to create a long-overdue national housing plan for Canada was introduced In February 2012 MPs Marie-Claude Morin, Andrew Cash and Michael Shapcott introduced the draft legislation of Bill C-400, An Act to Secure Adequate, Accessible and Affordable Housing For Canadians in the House of Commons. [13]

Affordable Housing Initiative (AHI)

Affordable Housing Initiative (AHI) (2001-2011), an intergovernmental multilateral housing initiative on affordable housing was created. The federal government, working through Canada Mortgage and Housing Corporation provided funding for the supply of new affordable rental housing under the Affordable Housing Program was c. CAD$1 billion from 2001-2008 (to be matched by provinces and territories). There were promises to invest $1.9 billion from 2008 to 2013 for housing and homelessness programs for low-income Canadians. [14]

Affordable Housing Framework 2011 – 2014

Affordable Housing Framework 2011 – 2014 announced by the federal government in July 2011 in order to improve "access to affordable, sound, suitable and sustainable housing."[15] The Affordable Housing Framework acknowledges that a wide range of solutions are required to respond to the diversity of affordable housing program needs and priorities specific to each jurisdiction. Provinces and territories are reminded that it is their responsibility to design and deliver affordable housing programs but they will have flexibility in how to invest federal funds (matched by provinces and territories) through programs and initiatives as long as the overall intended outcome is reached: "to reduce the number of Canadians in housing need by improving access to affordable housing that is sound, suitable and sustainable. . . [] Initiatives under the Framework can include new construction, renovation, homeownership assistance, rent supplements, shelter allowances, and accommodations for victims of family violence." [16]

Historical Context of Affordability of Housing in Canada

By 1996 the federal government revoked the Canada Assistance Plan, 1966, which had made it mandatory that people, whose income was inadequate to meet basic needs (including the working poor), have access to established appeals procedures in the provinces and territories regarding social assistance. [17] In the same year the federal government transferred responsibility for most existing federal housing programes to the provinces."[18][5] During the 1990s there was a devolution of new responsibilities, including affordable housing, from provincial governments to municipal governments without adequate revenue tools. [19] The TD report concluded that municipalities need a more sustainable funding arrangement, and provinces need to play a more active role in affordable housing, becoming leaders within the Affordable Housing Framework agreement.[9]

The 2006 Canadian federal budget "provided $300 million for affordable housing in the territories." [20]

The 2009 Canadian federal budget allocated funds for the period covering (2009-2011): renovation and energy retrofits to social housing ($1 billion); to build housing for low-income seniors ($400 million); to build social housing for persons with disabilities ($75 million); to support social housing in the North ($200 million); low-cost loans to municipalities to improve housing-related infrastructure ($2 billion) as part of Canada’s Economic Action Plan.

There was a modest improvement in housing affordibility across Canada in the third quarter of 2011 after two consecutive quarters of deterioration. Part of this was due to decreased costs in home ownership resulting from lower mortgage rates.[3]

Affordability by Province


The Housing Services Corporation (HSC) was created in January 2012 to replace the Social Housing Services Corporation (SHSC) as affordable housing needs evolved under the Housing Services Act. Housing Services Corporation "is a non-profit organization that delivers province-wide programs that benefit Ontario’s affordable housing sector. Our value-added services help affordable housing providers and Service Managers develop safe, affordable, people-centred homes and communities." [21]The Social Housing Services Corporation (SHSC) was created by Province of Ontario in 2002 following the devolution of responsibility for over 270,000 social housing units from the province to the municipalities.[22] Its mandate was to "provide Ontario housing providers and service managers with bulk purchasing, insurance, investment and information services that add significant value to their operations." [23]

A 2010 survey by the Ontario Non-Profit Housing Association revealed that the number of households on affordable housing waiting lists was at an "all-time high of 141,635" in 2010. [24]

British Columbia

Vancouver had the least affordable housing market in Canada by 1980; the average home cost 5.7 times the average family income (Statistics Canada, 1983a, table 7; Statistics Canada, 1983b, table 19 cited in (O'Toole 2007). [11] O' Toole calculated that given the high interest rates in 1980, "an average family would have to devote more than 70 percent of its income to pay off a mortgage on an average home in 30 years." [25]

There has been a move toward the integration of affordable social housing with market housing and other uses, such as the 2006-2010 redevelopment of the Woodward's building site in Vancouver. [26] Woodward, a heritage site, was re-invented and has reinvigorated Gastown in Downtown Eastside, one of Vancouver's oldest and "most challenged" yet "resilient" communities. [27]

O'Toole argued that the GVRD urban planners focused too much on housing affordability as a lack of affordable housing for low-income families who would need some form of housing subsidy. He noted that GVRD reports failed to mention the there was also a lack of affordable housing for people with middle incomes.[11]


  1. 1.0 1.1 Canada Mortgage and Housing Corporation (2011-09-28). Affordable Housing: What is the common definition of affordability?. Government of Canada. Retrieved on 2011-12-08.
  2. Hulchanski, J. David (October 1995). "The Concept of Housing Affordability: Six Contemporary Uses of the Expenditure to Income Ratio" (PDF). Housing Studies 10 (4). Retrieved 2011-12-08. 
  3. 3.0 3.1 RBC (November 2011). Housing Trends and Affordability (Report). Retrieved 2011-12-13. </noinclude>
  4. Hulchanski, David J. (2005). Rethinking Canada’s Housing Affordability Challenge.
  5. 5.0 5.1 5.2 5.3 UN (February 17, 2009). Report of the Special Rapporteur on adequate housing as a component of the right to an adequate standard of living, and on the right to non-discrimination in this context, : Mission to Canada (Report). United Nations. Retrieved 2011-12-07. </noinclude>
  6. Human rights treaty implementation: the Consensus on Canada (Report). the Poverty and Human Rights Centre. 2007. </noinclude>
  7. Yalnizyan, Armine (2004). "Affordable Housing: Squandering Canada’s Surplus: Opting for debt reduction and "scarcity by design"" (PDF). Canadian Centre for Policy Alternatives (Toronto, Ontario). Retrieved 2011-12-08. </noinclude>
  8. Pohl, Rudy (November 2001). Homelessness in Canada.
  9. 9.0 9.1 9.2 TD Economics (June 17, 2003). Affordable Housing in Canada: In Search of a New Paradigm (Report). Toronto Dominion Bank. Retrieved 2012-06-04. </noinclude>
  10. Randal O'Toole (2007). 'Liveable Region' remains a myth as GVRD planning results in high housing prices and traffic gridlock. Fraser Institute. Retrieved on June 4, 2012.
  11. 11.0 11.1 11.2 Randal O'Toole (2007). Unlivable Strategies: The Greater Vancouver Regional District and the Livable Region Strategic Plan (Report). Vancouver, BC: Fraser Institute. </noinclude>
  12. (PDF) Building From the Ground Up: Enhancing Affordable Housing in Canada (Report). The Conference Board of Canada. March 2010. p. 1. Retrieved June 5, 2012. </noinclude>
  13. 13.0 13.1 Michael Shapcott (February 17, 2012). "MP Marie-Claude Morin introduces Bill C-400, National Housing Act". Toronto, Ontario: Wellesley Institute. 
  14. CMHC. Affordable Housing Initiative. Retrieved on June 4, 2012.
  15. Canada's Economic Action Plan (July 25, 2011). Backgrounder: Investment in Affordable Housing 2011-2014 Framework Agreement. Retrieved on June 5, 2012.
  16. CMHC (July 4, 2011). Federal/Provincial/Territorial Ministers Responsible for Housing Announce a New Framework for Affordable Housing. Retrieved on June 5, 2012.
  17. [1]
  18. J. David Hulchanski (February 18, 2009). "Homelessness in Canada: Past, Present and Future". Growing Home: Housing and Homelessness in Canada. Calgary, Alberta: University of Calgary. </noinclude>
  19. Standing Committee on Municipal Finance and Intergovernmental Arrangements (March 2011) (PDF). Policy Statement on Municipal Finance and Intergovernmental Arrangements (Report). Canadian Federation of Municipalities. Retrieved June 4, 2012. </noinclude>
  20. GC (2011). The Next Phase of Canada's Economic Action Plan: a Low-tax Plan for Jobs and Growth (PDF). Retrieved on June 5, 2012.
  21. HSC (2012). About HSC.
  22. SHSC Strategic Plan (2005-2007) Putting Us to Work for You (Report). Social Housing Services Corporation. </noinclude>
  23. SHSC Strategic Plan (2005-2007) Putting Us to Work for You (Report). Social Housing Services Corporation. </noinclude>
  24. Michael Shapcott (May 6, 2010). Ontario's affordable housing waitlists at all-time high; underlining need for comprehensive housing plan. Retrieved on June 4, 2012.
  25. Randal O'Toole (2007). Unlivable Strategies: The Greater Vancouver Regional District and the Livable Region Strategic Plan (Report). Vancouver, BC: Fraser Institute. p. 11. </noinclude>
  26. Woodward's. City of Vancouver (2011). Retrieved on June 4, 2012.
  27. Jonathon Narvey (February 4, 2010). Woodward's revitalizing Gastown?.

Further reading

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