Nathaniel Erskine-Smith isn’t running for the Liberal leadership. He has a different job to do, and not much time

Can Toronto get a new housing deal?

Here’s an article by / Q&A with journalist Simon Lewsen for The Toronto Star.

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When Nathaniel Erskine-Smith, member of Parliament for Beaches-East York was sworn in as Minister of Housing, Infrastructure, and Communities last December, it was surely a mixed blessing. The rising-star MP was finally getting a cabinet portfolio. But he was being tasked with managing one of the toughest problems in Canada on a timeline that, depending on the next election, could be incredibly short.

But Erskine-Smith aims to make the most of things. In an interview that has been edited for clarity and length, he spoke about the Trudeau government’s successes and failures on the housing front, and why he’s looking forward to the months ahead, despite the challenges his party — and country — now face.

The federal government announced its national housing strategy in 2017, with the intention of reducing the number of people in housing need. Since then, that number has increased by 660,000. What went wrong?

With the national housing strategy there was, for the first time in decades, a reassertion of the federal role in housing. Was it sufficient to address the scale of the problem? No. We’ve got to double down. But the federal government can’t act alone. We need provincial leadership. We’re seeing success in some provinces, but Ontario is dragging the country down when it comes to housing starts.

Is it your opinion that the national housing strategy was doing the right things but at a scale that was incommensurate with the problem?

I would add that the 2017 version of the strategy was missing components. The original plan was focused on providing low-interest loans [to repair or build affordable homes. You’ve got to marry that loans program, though, with significant grants, specifically for non-profit housing. Recently, we’ve expanded the loans programs. We’ve also added the Housing Accelerator Fund to address red tape.

The Housing Accelerator Fund is money given to cities if they meet certain benchmarks in terms of red-tape reduction, yes?

Exactly. This was not part of the 2017 federal agenda but is now.

Recently, there’s also been a push to better use federally owned land — land that has, maybe, a two-storey post office or a parking lot on it.

We want to unlock those lands for housing.

Unlocking, I presume, means making the land available, perhaps at low cost or no cost, so that developers will build affordable or community housing?

Yes. This is where I see a contrast between our approach and what you hear from the federal Conservatives. They want to sell federal land off to the highest bidder. We want to partner with actors who are committed to affordability.

When it comes to housing, it seems, you want government to be both more and less involved. Fair?

Pierre Poilievre thinks the government should get out of the way entirely. I would say, no, the government should get out of the way specifically when there are barriers to the market building for the market. There are pain points — exclusionary zoning, excessive development charges — that must be removed. But the market is not going to deliver affordable housing, social housing, or community housing. So the government needs to reassert itself in those areas.

Your predecessor, Sean Fraser, made a comment in a Bloomberg interview, which seemed to imply that we can, somehow, make housing more affordable without undermining the value of people’s existing homes. I felt like he was evading the tension between the interests of people seeking to get into the market (who benefit when prices come down) versus people already in the market (who benefit when prices stay high).

It’s not the government’s job to say that a home should be a certain price, but we should be concerned when home prices run away from incomes. There is a generational unfairness to the housing market.

But the unfairness benefits certain people. Those people are voters. Many are Liberal voters. One question on my mind is: Why have governments been slow to address the housing crisis? One possible answer is that there are political incentives to move slowly. A lot of voters are, frankly, happy with the way things are.

I’m not going to disagree that there are competing interests in the housing market. But I think the question of “what price should a home be?” is a distraction. It’s not the government’s job to protect a certain amount of equity that has built up in a person’s home.

One criticism of programs that make it easier to buy a home is that they’re inflationary. If you’re not paying the land-transfer tax because you’re a first-time home buyer — or if you only need a 5 percent down payment instead of, say, 20 percent — then you have more financial leverage. You can bid higher, thereby driving prices up. Do you agree that these demand-side policies are counter-productive?

These policies tend to be put in place because they’re good politics. But if you’re solutions-oriented, you should be driving supply. As housing minister, I’m not going to push demand-driven policies.

You may not be housing minister for long. What can you do with the time you have?

There are three big categories. One is the Affordable Housing Fund, [which offers low-interest and forgivable loans to partnered organizations] and the Apartment Construction Loan Program. I’m leaning into those programs to prioritize social and non-profit housing and to get as many conditional approvals in place. The second piece is the $6 billion Housing Infrastructure Fund. You can think of it as the Housing Accelerator Fund 2.0. It’s focused on delivering for municipalities and provinces when they’re reducing red tape and stabilizing development charges. Ontario’s share is $2 billion. If we can’t get a deal done with Ontario, we’re going to do deals directly with municipalities. The third piece is around transit. I’m hoping to land a bigger deal with Toronto, and with other municipalities and provinces on transit, especially where there are ambitious proposals ready to go.

You’ve commented recently that the number one government priority is US-Canada relations. Housing is number two. But those issues are linked. A trade war could make housing construction more expensive at the exact moment we’re trying to make it cheaper.

A trade war is linked with all sorts of negative outcomes for our economy. We have to squarely focus our efforts on responding to the tariff threat — we have to make sure there are retaliatory measures in place — because it’s a threat across the board to productivity. But another threat to productivity is housing.

Can you explain why housing is a productivity issue?

If you can’t attract talented people because housing is too expensive, that’s a problem. Also, we need to be treating housing as a home first and investment second. I want to encourage investment dollars to come in to build housing. But it’s an unproductive use of investment dollars if people are just competing in the residential resale space.

The first time Trump was elected and there were threats of a trade war, the Trudeau government had a coordinated response. Seemingly everybody was talking with US business leaders and Republican operatives and state governors to counter Trump’s threat. Do you feel like the government is in a position to put up a united front again?

The prime minister has done this before, the government has done this before, and they’re ready to respond as necessary. But the difference is the timing of our electoral cycles. We’re facing repeated calls for an election from the Conservative opposition leader, who doesn’t want to be seen working with Trudeau at all.

To achieve a unified front, should the Liberals have acted faster to install a new leader and call an election?

Imagine we were in an election now. Do you think that would add stability or instability? I think it would add instability. And having stability, especially heading into the inauguration, is important for the same reason that it was important that the prime minister didn’t step down as prime minister. If he’d done that, we would have an interim leader who wouldn’t be able to hit the ground running. We’re going to have an election this year no matter what. Is it ideal in the context of the Trump tariffs? No. But that’s the world we live in.

Given the Trump threat, do you think ministers should not be running for party leader?

If I were a minister who was running in the leadership race, I would resign my portfolio.

I guess you’re not running then.

I am not.

Can the government respond to Trump without a parliament?

If you look at the first iteration of the response to Trump, it was a government response that was coordinated across party lines. It was not a parliamentary response. It will be important if the tariffs drag on into the spring— and if that response is not working — that there’s an accountability function for parliament to play. In the meantime, the government continues to govern.

What’s the mood like in the party now?

There’s a sense of optimism that this moment can be a reset. The timing is going to be short between the leadership race and the general election. So anyone who’s running for leadership has to think of this as one big race. They are introducing themselves to the Canadian public. There is an opportunity here to have a campaign of ideas, to establish renewal. There’s more optimism in the party than there’s been in a while. Whether it translates into better outcomes remains to be seen.

Original Article in the Toronto Star by Simon Lewsen. Check it out here.