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CMHC Housing Outlook
Whether it is the construction of new dwellings, or the rental, sale or renovation of existing homes, housing plays a dynamic and crucial role in the economy. Housing-related economic activity accounted for $307 billion in 2009, over one-fifth of Canada’s total gross domestic product.
The impact of housing on the economy is far-reaching, creating economic activity and employment across a wide range of sectors.
The residential construction sector is comprised of numerous labour-intensive small businesses — some 71,000 residential construction firms and 158,000 specialty trade contractors in 2009 — that can enter and exit the sector with relative ease, thanks in part to the relatively modest investment in fixed capital required for prospective firms and the extensive use of subcontracting.
These factors make housing an attractive economic and job creation tool. Canada’s Economic Action Plan in Budget 2009 provided a total of $7.8 billion in tax relief and funding of actions to stimulate the economy through housing. When provincial contributions are taken into account, the total stimulus value is $9.2 billion.
The Government of Canada plays a significant role in housing, working with a wide range of provincial, territorial, municipal, Aboriginal, industry and other stakeholders to improve housing outcomes for those Canadians whose housing needs cannot be met in the marketplace. Examples of this involvement include a commitment in 2008 of $1.9 billion over five years to invest in housing and alleviate homelessness; Canada’s Economic Action Plan (Budget 2009) which announced a one-time investment of more than $2 billion over two years to build new and repair existing social housing, and up to $2 billion over two years in low-cost loans to municipalities through CMHC to fund housing-related municipal infrastructure projects.
Housing plays a central role in the lives and finances of Canadian households. Real estate — which includes principal residences and second homes—accounts for over 40% of the assets of households.
The greater the affordability, security of tenure, choice and quality of accommodation, the greater the likelihood of positive educational performance, skills development and employment success.
The response to the recent financial and economic turmoil has shown that Canada’s housing system has strength and resilience as well as flexibility. The high standard of housing that the great majority of Canadians enjoy demonstrates that the system is working; however, some Canadians still face difficulties in securing acceptable housing.
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