By Mike De Souza, Postmedia News October 7, 2013 - OTTAWA - Canada’s cities say that mounting mortgage debt held by cash-strapped Canadians is putting “our national economy at risk,” and they have urged Prime Minister Stephen Harper, in a letter, to use his government’s upcoming throne speech to set the stage for an agenda to help bring down housing costs in their communities. The letter, dated Oct. 1, also calls on the government to pursue its new 10-year multibillion dollar infrastructure plan as well as follow through on a recent commitment by Transport Minister Lisa Raitt to address public safety concerns about the transportation of dangerous goods in the aftermath of the Lac-Megantic runaway train disaster and other accidents.
But the Federation of Canadian Municipalities, made up of member cities representing 90% of the nation’s population, said in the letter that the high cost of housing was the most “urgent” financial issue facing Canadians today.
The letter noted that total mortgage debt added up to $1.1 trillion, despite some of the steps “rightly taken” by the government to manage risks in the housing sector. It said this meant that one out of four Canadians was paying more for housing than they could afford.
“Housing costs and, as the Bank of Canada notes, household debt, are undermining Canadians personal financial security, while putting our national economy at risk,” said the letter to Harper, signed by the federation’s president, Claude Dauphin, the mayor of the Montreal borough of Lachine.
“As it stands, for those who cannot afford to purchase a home, the short supply of rental units is driving up rental costs and making it hard to house workers in regions experiencing strong economic activity.”
The letter also said that an inadequate supply of subsidized housing for those in need was pushing the most vulnerable Canadians on to the street.
Dauphin wrote that the federal government had a “limited but critical role to play” in partnership with other levels of government to restore balance to the housing system with actions to attract investment, create jobs, and support growth as well as increased labour mobility.
Stephen Lecce, a spokesman for Harper, said he couldn’t comment specifically on details in the upcoming throne speech, but reiterated that jobs and growth would remain the government’s priority for the fall.
Ottawa Mayor Jim Watson noted that his own city had increased its funding for housing by millions of dollars in recent years, lowering its waiting list to below 10,000 households. But he said that people in some regions of the country can face waits of decades before finding affordable housing.
“It’s one of the fundamental basics that everyone should have,” said Watson, explaining that some have trouble finding work because they don’t have a fixed address.
The federation believes that the federal government could offer support through its housing insurance agency, the Canadian Mortgage and Housing Corporation, by backing low-interest renewed mortgages on older buildings to help pay for maintenance and other costs.
Brian Pincott, a city councillor from Calgary, said recent heavy rain and flooding in his region in the summer of 2013 has turned a housing challenge into a crisis by damaging thousands of homes.
He explained that the climate-related disaster reduced what was previously a two per cent vacancy rate in rental units last spring to no vacancy in the aftermath of the flooding.
“We have a few thousand people still not back in their homes right now,” said Pincott. “We’re building temporary housing camps in Calgary.”
He said the province is helping pay for temporary housing, but added that all three levels of government must work together for long-term solutions.
Meantime, Watson also noted that transit remained one of the most pressing needs of cities, explaining that he would unveil his own plans, in the coming days, to further expand Ottawa’s transit network beyond new construction now underway to build a light rail.
He said he was counting on other levels of government to support these efforts.
“We can’t sit on our laurels, because the gridlock is strangling our economy with trucks struck on the (highways) and the inner cities,” Watson said.
“It’s also affecting the quality of life and causing time away from families because you’re spending so much time in your car.”
Transport Canada has told its minister in internal briefing notes that transportation costs are also contributing to rising debts with households paying about $10,000 per year on transportation, more than they spend on food, contributing to rising personal debt.
Infrastructure and Communities Minister Denis Lebel has estimated the federal government contributed more than $7 billion to public transit projects through various federal programs since the Harper government was elected in 2006, and said through a spokeswoman that it would continue being a strong partner in infrastructure project priorities of cities, provinces and territories.
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