The Greater Toronto and Hamilton Area (GTHA) will be one of three key battle grounds – along with the province of Quebec and Metro Vancouver – in the 2021 Federal election. To understand the GTHA’s role in this upcoming election, one must first understand the context.
The city’s small and medium businesses have endured one of the longest, if not the longest, lockdowns in the world. As one of the largest private sector employers, small businesses will have tough questions for candidates seeking their vote. The lockdowns and wide acceptance of remote working has also made city-dwellers rethink the way they live, sending the real estate market into a frenzy. Childcare, while always top of mind, was thrust into the spotlight as women’s labour force participation fell from its highest level ever to its lowest point since the 1980s, just weeks into the pandemic. All the while, mainstay issues like infrastructure have been sidelined due to the pandemic and commuters in the vote rich 905 are keen for progress in this area.
We at H+K know the issues, the political dynamics that define them, and what companies and organizations should watch out for in the opening days of the campaign. Here are three issues in the GTHA that can make or break electoral fortunes. Check back next week for part two – our take on how infrastructure and climate will impact electoral fortunes in the GTHA.
Housing, to Torontonians, is like the weather: something everyone has in common, everyone complains about, and nobody can control. Despite governments at all levels acknowledging the problem, the market reached historic highs in 2021, with the Toronto Real Estate Board projecting an average sale price of over $1 million.
More than any other year, these soaring house prices have triggered jubilation among homeowners and despair among homebuyers. Political parties are keen to tout their housing bona fides, in the hopes of attracting house-obsessed millennial voters. The challenge, however, is to appear to have a solution for those locked out of the market – while providing reassurances to older voters sitting on nest eggs that their property values won’t be reduced.
A look at each party’s policy offerings makes this plain, as they look to both increase supply and subsidize demand – making movement on the core issue, the fact that housing is too expensive, difficult.
The New Democrats (NDP), for example, have an ambitious plan to build half a million affordable rental units and kickstart the development of social, nonprofit and cooperative housing with dedicated funds and a streamlined application process. But they also propose to juice demand. On the ownership side, they promise to lengthen mortgage terms for first-time homebuyers. They have also promised to provide up to $5,000 per year in housing supports to renters whose rent is over 30% of their income. Rent has skyrocketed over Trudeau’s time in government, and the relief will be welcome to those burdened with unaffordable rental housing costs – particularly in Toronto.
The Conservatives (CPC), for their part, promise to turn public land over to housing development and tie federal transit funding to density around the funded projects. In doing so, they hope to inspire the construction of one million homes. But they also want to do away with the mortgage stress test in certain circumstances. Building a political coalition is about finding a win for everyone in the tent. But the nature of the Canadian housing market is that it’s zero sum: action to lower prices, for example, might help aspiring homebuyers, but hurt homeowners relying on their home value to fund their retirement. This makes addressing the housing crisis very difficult, as each party seeks to court the support of homeowners, homebuyers and renters alike.
The Liberal Party, which launched a housing plan after a rocky first week, took a similar approach. Despite an ambitious target of 1.4 million new homes, and a commitment to working with municipalities to allow for their construction, they too promise to juice demand – with promises such as creating a tax–advantaged First Home Savings Account, increasing the Home Buyers Tax Credit and establishing a rent-to own program. While their headline number is substantial, it includes both net-new construction and units that have been “preserved or repaired.”
The parties, in fairness to them, have all promised to make changes that look to reduce competition from foreign buyers, or from speculators. The Liberals, in particular, promised to introduce a “homebuyers’ bill of rights” that would do away with practices like blind bidding and provide price transparency. But those tweaks, while welcome, do not fundamentally change the dynamics of our housing shortage. Further complicating the picture is the fact that the most effective tool for ending the housing crisis – substantially increasing supply – is in provincial and municipal jurisdiction.
But jurisdictional questions may take second place to results at the ballot box, as voters challenged by soaring prices demand a solution from their government and hold them accountable.
With questions of affordability – of housing and more – on all voters’ minds, the ballot question for many is squarely about the post-pandemic economy. Having taken the brunt of the COVID-19 lockdowns, small business issues will need to be a sizable part of every party platform. And should the GTHA be locked down again due to the Delta variant, Liberals will feel the heat for calling the election in the first place.
After all, there were approximately 4,000 fewer small businesses in Toronto at the end of 2020, and those who survived the third wave are saddled with mountains of debt. The 2020 Toronto Employment Survey shows service-based businesses such as restaurants, bars and hotels lost more than 30,000 jobs.
These employees, primarily of a younger-demographic, benefitted from the Government’s flagship COVID-19 response program, the Canada Emergency Response Benefit (CERB), but they have still experienced a setback in fortunes. To secure their vote, the Liberals will be fighting against the NDP and Jagmeet Singh’s rising popularity. The NDP can be expected to outspend the Liberals and will promise to extend COVID support programs for as long as it takes.
While the Liberals will benefit from having doled out significant financial support in the last year, they will also need to defend their decisions, especially the Canada Emergency Business Account (CEBA) that small businesses couldn’t seem to access, and Canada’s Emergency Commercial Rent Assistance (CECRA) program that relied on landlords to cover a percentage of the rent. The Liberals will also need to explain their plans to wind up the wage subsidy and supports. If anyone understands the long-term ramifications of debt in an environment where interest levels can only go up, it’s small business. Liberals will need to explain how they’ll pay down record level debt while meaningfully supporting the small business sector.
While the Conservatives will position themselves as the fiscally prudent choice relative to the Liberals and NDP, don’t expect them to skimp when it comes to small business. Their platform, Canada’s Recovery Plan, focuses on winding down emergency COVID support programs but “recovering the one million jobs lost during the pandemic” with “targeted” and “time-limited stimulus measures” that will help rebuild Main Street. As part of the plan, they’ll even give a 50 per cent rebate to diners for eating out Monday to Wednesday during a designated one-month time period, once it’s safe to do so. The question is whether they can convince small businesses and the people they employ that winding up programs delivering cash to their accounts right now in favour of vague promises of future investments is a worthy approach.
Childcare is a necessity, not a luxury—although you wouldn’t know it by looking at the price. The median cost of daycare in Toronto is $1,600 per month, giving this necessity distinctly luxurious overtones for most low- and middle-income earners in the GTHA.
So it’s little surprise that childcare has frequently been part of progressive parties’ pitch to voters. After nearly a quarter of a century of promises, at the end of its second consecutive term, the Trudeau government finally acted, signing bilateral funding agreements with eight provinces and territories in the weeks leading up to the election call.
The policy case is strong: a comprehensive national childcare program has the capacity to help address issues above and beyond access or expense. Successfully executed, it would be a flagship component of any government’s post-pandemic recovery strategy by enabling greater economic mobility and preventing people – particularly women – from being pushed out of the workforce. This is especially important within the context of a once-in-a-generation pandemic that has disproportionately affected women, whose jobs and livelihoods were more vulnerable to begin with due to entrenched inequality.
For these reasons, the governing Liberals can pitch childcare as both an economic and social imperative, enabling them to sell their program to centre-right and centre-left voters on terms amenable to them.
In an electorate that is, in part, split along geographic lines, we can expect the Liberal plan will find a warmer reception in the cities. Dual-income families will welcome this assistance, as childcare is often one of the biggest line-items on the annual budget. We can expect this program to be especially welcome to Liberal candidates in expensive downtown Toronto, where the Liberal government is on defense against the surging New Democrats.
But other families with non-institutional childcare arrangements, such as those families with one stay-at-home parent or those who live in a multi-generational household, may find the program less useful. These households, while they can be found everywhere in the region, are more common in the 905 ridings targeted by the Conservatives.
The progress the federal government has made on the childcare file in a relatively short amount of time, including through recently inked agreements with provinces such as Quebec, British Columbia and Manitoba, will help insulate it from predictable NDP criticism that the Liberal approach to governing is all sizzle, no steak. It will also apply pressure to Erin O’Toole, who will need to articulate why his party’s proposed tax credit justifies scrapping a plan that’s already largely negotiated and on provinces whose premiers have yet to complete a deal.
Authored By: Michael O’Shaughnessy, Alex Benac and Meagan Murdoch