Having an affordable place to live is a key ingredient for a prosperous and healthy life. Unfortunately for many people, housing is becoming harder and harder to afford, with some markets in Canada priced out of reach for entire generations of middle-income citizens. Affordable rental housing is also very difficult to come by, especially for people towards the bottom of the income distribution. Canada's rental stock of housing is old and deteriorated, with very little development or maintenance of this class of housing over the past 30 years.
Governments at all levels affect housing in a variety of ways, and governments and citizens alike should be concerned about the extra cost added to housing through regulatory burden as well as other policies that limit new housing supply. Municipal governments add to the cost of housing through fees and levies and limit supply through zoning laws. This creates a fiscal externality on upper levels of government, since housing becomes less affordable and social spending requirements increase for provincial and federal governments.
Provincial governments also interfere with the housing market. Land transfer taxes make land more expensive, and rent controls discourage investment in new rental housing developments. Vacancy and foreign buyer taxes are implemented in order to try to add supply to the rental market and limit speculative demand. Carbon taxes make building supplies—especially the key building ingredient of concrete—more expensive.