Liberal budget hits a home run on housing, but plays small ball on care economy

The Liberals’ Housing Plan is the most comprehensive set of policies we’ve seen since the end of the Second World War, narrated clearly and effectively by Housing Minister Sean Fraser. It finally addresses the rapidly expanding population of renters, more than doubling previous commitments. A finance department official confirmed Budget 2024 adds $19.5 billion over the next five years for housing, including the creation of 30,000 new purpose-built apartments. Half that money is in the form of loans, so taxpayers will get much of it back.  

While the pace of builds is accelerating, so has the pace of renovictions and short-term rentals since the Bank of Canada started hiking interest rates in 2022. In order to preserve the affordable housing stock we still have, the budget also allocates $1 billion in loans, and not quite $500M in grants to non-profits.

But in the decade from 2011 and 2021, Canada was losing 15 affordable rental units for every new unit built. We can’t build fast enough. Your grandma was right: an ounce of protection is worth a pound of cure.

Real estate investment trusts (REITs) and pools of private equity are buying up housing and churning out bigger than average returns since supply is so scarce.  Budget 2024 says “When purchasing a home, Canadians might expect to be bidding against other potential buyers, not a multibillion-dollar hedge fund. … Budget 2024 announces that the government intends to restrict the purchase and acquisition of existing single-family homes by very large, corporate investors.” Expect consultations soon, and details in the 2024 Fall Economic Statement.

Preventing erosion of capacity and siphoning of wealth is a big concern in the care economy too, which is also in the crosshairs of private equity. In provinces like Ontario and around the world, private equity is scooping up small profitable providers, squeezing profits from public funding by lowering staffing levels and lobbying for less qualified staff to lower labour costs. These owners also charge operators more for rent and supplies, then lobby for higher public subsidies and fees. This can and must be stopped.

In politics, not everything can be a home run. All governments will be hard-pressed to avoid the accelerating dysfunction in health care, long-term care, and child-care. Beyond more funding, the federal government can adopt small ball strategies to methodically advance a humane agenda, moving players around the bases slowly and strategically. Here are three ways federal small ball could deliver big results without big spends in the coming months:

Child care Workforce Deals: Round two of the Canada-wide Early Learning and Childcare Agreements are now being negotiated, with a focus on workforce attraction and retention. Funds for these deals are already baked into the budget. The new agreements need enforceable requirements for staffing levels, qualifications of staff, wage grids commensurate with training, and pensions. Such rules could pay big dividends for frustrated parents who can see existing child care spaces not available because of staff shortages and massive turnover.

Private Equity: Build on the Housing Plan statement that “the role of private equity in our housing market needs to be addressed.” The federal government should be tracking trends in the investments occurring in our long-term care, child care and health-care sectors, following the U.S., U.K., Australia, Europe and the Nordic countries, who are all examining ways of putting new guardrails on public funding.

Community Benefits Agreements: Care services such as child care, long-term care, medical or dental community clinics can be a built-in feature of new housing and infrastructure developments. Vancouver has led the way in such initiatives, increasing access to care while shielding non-profit providers from future rent hikes within for-profit buildings. Every federal dollar should do double duty like this wherever possible.

It’s obvious why housing took centre stage in this budget. Freeland only had the opportunity for one home run, given her adversaries’ weaponization of any new spending the Liberals undertake. But housing isn’t all people need, and the care economy has galloped up the list of Canadians’ concerns.

Child care, long-term care and health care has been crumbling all across Canada in the past year, a function of rising demand and shortage of supply, whether spaces, beds, or staff. Just last week another person asked for, and received, Medical Assistance in Dying in Quebec because the health system totally failed to meet their care needs. These needs can’t wait. The provinces absolutely need to step up, but the feds can do more.

So, yes, it’s disappointing there was no big answer to the challenges in the care economy in this federal budget; but it’s understandable, especially after committing $200 billion over 10 years for health care last year. If the Liberals now tighten their focus on the workforce, private equity, and community benefits, every federal dollar could deliver more for the care economy, with life-altering changes along the way.

This is the hard, painstaking work of government. Small ball may not be a glamorous way to play the game, but so long as the runners keep moving around the bases on care economy reform, at least we’ll keep scoring wins.