One of the main lessons politicos south of the border are learning in the aftermath of Donald Trump’s re-election is that inflation is political poison. But “inflation” isn’t a single thing or process, but rather a somewhat artificial number we put on the change in the price level of a basket of different goods and household expenses. A headline that refers to “inflation” can one year be referring to a rapid increase in the price of food and the next year be talking about used cars or clothing or housing. It’s so politically potent because inflation is obviously and inextricably linked to a cost-of-living crisis.
In Ontario, in 2024, “inflation” refers almost entirely to the cost of housing. The latest edition of the Ontario Economic Monitor, an ongoing report from the independent Financial Accountability Office, shows, that excluding shelter costs, inflation in Ontario is just 0.9 per cent — well below the overall rate of 2.3 per cent. What’s hammering Ontario consumers is the cost of shelter, where inflation is still running at 5.2 per cent. Both the “shelter” and “everything else” forms of inflation peaked in 2022 above 7 per cent, but while “everything else” inflation has fallen briskly in the past 18 months, housing costs have continued to climb stubbornly and quickly.
The FAO doesn’t make specific policy recommendations, but it is able to speak to whether existing policies are effective. Ontario’s much-vaunted target of 1.5 million new homes by 2031? After a number of squandered years, that’s almost certainly unreachable now. Per the FAO, reaching the 1.5 million number would mean almost 40,000 new homes would need to be built every fiscal quarter, and that’s if we started immediately. Instead, we’re probably going to struggle to do much more than half that number, and, in any case, never in the province’s history have we built more than 34,400 units in a three-month span, a record set in 1973.
Finally, the FAO’s report notes that the construction of detached homes specifically has fallen to a level not seen since rigorous data collection started in 1955. There are reasons this could be either good or bad depending on your views on planning policy, but it’s noteworthy because the current government has put so much policy muscle behind the premier’s vision of addressing affordability with detached-home suburban sprawl.
In short: Ontario is still in the grips of a cost-of-living crisis that’s overwhelmingly a housing crisis. The government is failing to meet its targets for new home construction. And it’s not even increasing the quantity of the specific types of homes it says it wants most. It’s a damning indictment of six years of housing policy contained in just a handful of economic indicators.
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It’s darkly funny that the Ford government can’t even really turbo-charge sprawling subdivisions of detached homes, considering how much energy it’s put into that. On that score, a new report from the Alliance for a Liveable Ontario lays out the particulars: among its many changes to policy, the Ford government has made it much more procedurally simple for developers to sprawl into greenfield land, over the objections of municipal official plans. This breaks with more than 20 years of provincial planning philosophy — which had its beginnings under a Tory government, though it was more comprehensively implemented under the Dalton McGuinty Liberals — that urged municipalities to be more efficient with public money by emphasizing intensification near existing infrastructure over greenfield sprawl.
The ALO is made up of several Ford critics and people who loudly (and successfully) defended the Greenbelt from the government’s attempt to open it up for development after the 2022 election. It’s no surprise that it doesn’t give the government high marks for its land-use and housing policy. But it’s hardly even controversial at this point to say that the current policies aren’t working. One of the areas the ALO highlights is the lack of diversity of housing types that are being built: there’s functionally nothing on the market between high-rise condo towers and (a small and shrinking number of) detached homes. When municipalities have tried to adopt more accommodating policies, as Toronto did recently, they’ve had little official support from the province.
There are almost as many ways to measure Ontario’s housing crisis as there are to measure inflation. What’s astonishing about this province in late 2024 is that our current policies are failing in nearly every way we can measure — and yet there’s little sense of urgency from the government to make changes commensurate with the crisis.
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