The country’s business leaders consider the housing crisis to be the biggest risk to the Canadian economy, a new survey from KPMG Canada reveals.
Of the 534 business leaders who participated in the survey, 94% agreed that high housing costs and lack of supply are the biggest risk to the economy, and that housing should be the top priority in the next budget federal.
In Quebec, where 112 business leaders were surveyed, this proportion increases to 96%.
Housing issues are forcing companies to pay more for labor and hurting their ability to attract and retain already scarce talent, said 87% of respondents nationally.
“What we see in the survey is that companies have to pay more to allow their workers to absorb the rising cost of living,” explained Caroline Charest, who is an economist and partner at KPMG in Montreal.
This need to pay more for labor not only directly affects business finances, but also makes it more difficult to combat inflation, while interest rates remain at high levels to compensate, stressed Mme Charest.
High housing costs and interest rates are straining households already struggling with high debt, she added.
“This makes household balance sheets more vulnerable, particularly during economic downturns. This therefore creates areas of vulnerability in the economy,” she mentioned.
Rising housing costs are a major contributor to inflation, forcing the Bank of Canada to wait before starting to lower its key rate, said Ms.me Charest.
Companies have been sounding the alarm on this subject for some time.
A report published last year by the Ontario Chamber of Commerce also highlighted the extent to which the housing crisis affects the ability of businesses to recruit qualified workers.
Nearly 90% of businesses would like to see more public-private collaboration to help resolve the crisis, according to the KPMG survey.
“How could we work together to bring together all the stakeholders, that is to say governments, non-profit organizations, the community and the private sector, to find solutions in order to find ways to build housing faster? » said Ms. Charest.
“This is quite clear from our business survey. »
The federal government is working to provide more financial support to other levels of government and has introduced measures such as a GST rebate for rental housing construction, but it has limited direct control over this issue. .
Part of the federal funding was used to link funding to measures adopted by provinces and municipalities that could help increase supply.
The vast majority of people surveyed in the KPMG survey are in favor of tax measures aimed at making rents more affordable, such as the tax deductibility of mortgage interest, but also want to maintain the tax exemption for capital gains for a residence main.
For its survey, conducted from February 3 to 27, KPMG used Sago’s Methodify online research platform. All respondents were business owners or senior management decision-makers.
About a third of executives worked at companies with revenues greater than $500 million, about half had revenues between $100 million and $500 million, and the rest were less.