The trade war may be top of voters’ minds this election, but so is housing. And amid proposals to fix the country’s housing crisis is a pitch that hearkens back to a different kind of war. 

The Liberals’ housing proposal Monday was, in part, to create a federal developer that could build low-cost homes on government land. It’s one their leader, Mark Carney, was happy to compare to a massive federal effort to build homes during and after the Second World War, first for war industry workers, then for returning veterans.

The New Democrats have also proposed building on federally owned land, in their case by working with non-profits and co-ops to build more than 100,000 rent-controlled units and a $1-billion fund to buy more land. 

Both parties’ pitches resemble the wartime effort that was revived a little over a year ago when then Liberal housing minister Sean Fraser announced a consultation on developing a catalogue of pre-approved home designs to accelerate homebuilding by developers.

The designs, now available to view on the CMHC website, include low-rise builds, such as small multiplexes, student housing and seniors’ residences, labelled “gentle density.”

So, how did those 1940s policies work? And could they really apply to today’s world — tariffs and all? 

Wartime rentals converted to permanent homes

After the start of the Second World War, Canada was in the midst of a housing crisis not unlike the one currently facing the country.

It also had an urgent need to fill munitions factories with workers and therefore to house those workers. Using the War Measures Act to fend off opposition, Prime Minister William Lyon Mackenzie King created Wartime Housing Limited — essentially a federal developer.

What’s unclear in the proposals made today is whether the government would retain ownership and management of the homes built on federal land, which experts say could make a big difference in whether those homes remain affordable or not.

WATCH | How Canada built thousands of homes in the 1940s:

Is ‘war-time’ housing a solution to Canada’s crisis?

The federal government is reviving a war-time plan for pre-approved home designs to accelerate building across the country. Andrew Chang breaks down why it takes so long to build housing in Canada, and whether a new version of the plan could help.

After the war, Wartime Housing Limited became the Canada Mortgage Housing Corporation (CMHC) we know today. It transformed its temporary rental homes into permanent ones with basements, and built thousands more for veterans. By some estimates, over 40,000 of the small homes — often called strawberry-box or victory houses — were built across the country between 1942 and 1948.

Many of these homes were prefabricated in factories and erected in only 36 hours. Rent cost roughly one-fifth of the household’s income, far more affordable than the market rate in most Canadian cities today.

Supply not the only issue

Carolyn Whitzman, a senior housing researcher at the University of Toronto’s School of Cities and the author of the book Home Truths: Fixing Canada’s Housing Crisis, says that while the model is one worth attempting again, all levels of government involved will need to work harder now to keep costs low.

“I find that a lot of the thinking, at any level of government, has not been starting from that starting point. Instead, it’s been talking about how much we’re going to spend or how many homes we’re going to build,” said Whitzman, who has advised the Liberals, Greens, New Democrats and Conservatives on housing policy.

On the Conservative proposal to remove GST on new homes under $1.3 million and a similar Liberal proposal to nix GST on homes up to $1 million, Whitzman said such policies would mostly benefit high-income earners, with a down payment on a home, and the size of the mortgage, more likely to be barriers for the average Canadian household.

“I’d say the GST proposal sort of plays to a myth that we can somehow get affordable homeownership simply or easily,” she said. “We can’t.”

Carney says he wants to double the number of new homes built in Canada each year. (Jason Franson/The Canadian Press)

Carney’s Monday pitch was to double the yearly pace of homebuilding to 500,000 and provide tens of billions in financing for new affordable housing projects across the country. 

The CMHC has projected the country would need 3.5 million more units by 2030 on top of what’s already being built.

“Supply is important, but it needs to be the right supply in the right places at the right prices,” Whitzman said.

And while a federally directed effort would have the advantage of building on government land, construction costs could get steeper with tariffs, Whitzman noted. 

And the country has a lot of catching up to do. 

Zoning, labour shortage

Steve Pomeroy, an industry professor at the Canadian Housing Evidence Collaborative at McMaster University, says the only way for housing and rental market prices to get to affordable levels again is for the government to retain ownership of the homes it builds.

“We really can’t get to the affordable levels through the private market,” he said. And simply subsidizing private developers to build on federal land may not be quite enough, he said. 

NDP Leader Jagmeet Singh has also proposed building homes on federal land. (Nathan Denette/The Canadian Press)

“[Developers] will build on it, but they’ll charge what the market will bear. And if the market will bear more, we won’t necessarily get affordable production,” Pomeroy said. 

Beyond construction costs, there are other barriers Whitzman and Pomeroy identified that make it hard to replicate the large-scale housing development models of the 1940s, ’50s and ’60s. 

For one, there is a labour shortage in construction.

The Liberals may have foreseen that issue with their proposal to create Build Canada Homes (BCH), which would supply $25 billion in debt financing and $1 billion in equity financing to “innovative Canadian prefabricated homebuilders.”

“It’s much easier to train someone to work on a production line … versus training somebody to work on a construction site. And manufactured housing has the benefit that we can work for the winter indoors,” Pomeroy said. 

Among Conservative Leader Pierre Poilievre’s housing proposals is an end to GST on home sales up to $1.3 million. (Christopher Katsarov/The Canadian Press)

Zoning laws are also a lot more complicated than they were half a century ago, with many major cities in Canada having entire swaths dedicated to single-family homes at a time when medium density is key to creating walkable neighbourhoods. 

That’s the other shortfall of the victory homes, Whitzman said in an interview on CBC’s Front Burner after Fraser’s December 2023 announcement: “One of the issues was that it was reliant on everyone having a car.” 

The developments were built on the outskirts of cities and laid the foundation for the kinds of suburbs we know today. 

And beyond supply and location, Whitzman found that there is a need for about three million homes or rental units that would cost tenants less than $1,000 a month.

“That’s still a really hard price point. In fact, almost impossible, I’d argue, without some really serious changes to the way that we build housing,” Whitzman said on Front Burner.