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Are Canadian politicians conflicted on affordable housing?

Housing advocate Rohana Rezel says a "nice loophole" exists in federal conflict of interest laws to allow members of Parliament to own rental properties while still setting housing policies.
Housing advocate Rohanna Rezel nearby newly built condos in south Vancouver.

On April 12, Canada’s Housing Minister Ahmed Hussen updated his disclosure of assets and income with the Office of the Conflict of Interest and Ethics Commissioner, to add a second rental property to his portfolio.

The only detail is that the property is located on Kijik Crescent, in a new subdivision in suburban Ottawa. Online listings show new two- and four-bedroom townhomes renting for about $2,400 to $3,000 per month, respectively — more than enough to make it unaffordable to the median income-earning family.

Hussen’s penchant for purchasing rental properties puts him in a conflict of interest — albeit just not by the letter of the law — says Vancouver resident and housing advocate Rohana Rezel.

“He obviously wants his rents to go up; he obviously wants his house price to go up,” said Rezel, who lodged a complaint against Hussen with the commissioner in May 2022, a year prior to another individual recently launching a petition to ban any housing minister from owning investment properties.

Rezel charged that Hussen oversees policies that directly impact his own interests. First, he said, as immigration minister: he dramatically increased immigration targets.

Then, as housing minister: Rezel said Hussen has done little to increase the stock of non-market, affordable housing for Canadians — all while increasing his private investments in the housing market.

“Since the Liberals came to power, their policies have ensured housing prices go up. For example, look at the mandate given to the banks; interest rates go up, but banks were allowed to extend amortizations,” thus keeping prices elevated over the past 15 months, said Rezel, whose complaint did not lead to an inquiry from the commissioner.

Conflict of interest rules don't factor in rental properties

In order to understand why Hussen is not in a legal conflict of interest, Rezel says there is a “nice loophole” for members of Parliament (MPs) — who themselves write the Conflict of Interest Act, which applies to public office holders, including cabinet members, and the Conflict of Interest Code for MPs, which only applies to ordinary MPs.

The act is in place to prevent a minister from advancing policies that further their private interests, which are largely financial but may also be social and political.

The act provides for some specific measures on what are deemed “controlled assets,” namely that they must be divested or put in a blind trust while holding public office.

A controlled asset is one whose value could be directly or indirectly affected by government decisions or policy, including, but not limited to, publicly traded securities, self-administered RRSP plans and “commodities, futures and foreign currencies held or traded for speculative purposes.”

Then there are exempt assets, “not of a commercial character,” such as open mutual funds, bond, cash, cars and even secondary homes for the purpose of a public office holder or their family members to live in.  

The commissioner’s website does not reference rental properties, but Rezel suggests they would normally fall under the definition of a commodity. However, in response to Rezel’s complaint, the office told him: “A public office holder’s private interest does not include an interest in a matter that affects the public holder as one of a broad class of persons.”

According to Statistics Canada, only eight per cent of Canadian households report rental income. It’s unclear how the commissioner defines a “broad class of persons” and Rezel says he would disagree with any determination that defines it as eight per cent of the population.

However, even if rental properties were deemed not to be of interest to a broad class of persons, the commissioner’s office also responded to Rezel that, “If it can be demonstrated that a specific government measure had a material impact on the value of real estate in Canada, such a measure would affect the interests of the broad class of individuals who own real estate in Canada.

“Decisions made in that context would therefore affect a property-owning public office holder as a member of that broad class. That interest would thus be excluded from being considered a private interest for the purposes of the act.”

“The way the laws are written, as long as others are benefiting, it’s not a conflict,” said Rezel.

Rezel also notes that acts of omission, such as not enacting policies to build more homes and/or lower prices, are not considered under the act.

“Even if it’s not his intention, the optics are really awful,” said Rezel.

Politicians 'in on this together'

Hussen did not respond to Glacier Media’s offer to comment on his rental property purchases.

“We’re all allowed to make financial decisions based on our circumstances,” he recently told TVO, when asked if he felt conflicted.

Rezel said he’s seen a similar response from Leader of the Opposition Pierre Poilievre, who is also a rental property owner.

“You won’t see Pierre Poilievre address these conflicts. They are all in on this together,” said Rezel.

Poilievre has likewise defended his property investments, claiming they follow the lawful regulations. Conservative housing critic Scott Aitchison, an Ontario realtor, did not respond to Glacier Media for his party’s response to Hussen’s investments.

In April 2022, Global News reported that at least 20 per cent of Canadian MPs hold rental properties, based on incomplete disclosures following the fall 2021 election. In September 2022, The Maple podcast reported 38 per cent of MPs are invested in real estate in some form.

Glacier Media analyzed B.C. MLA disclosures in May 2022, finding 93 per cent owned a home (compared to 66.8 per cent of the B.C. public) and 51 per cent owned a second property, far exceeding the provincial secondary homeowner rate of 15 per cent cited by Statistics Canada.

Then-B.C. Housing Minister David Eby, who had recently purchased a $2.2-million townhome near the University of British Columbia, defended his own party’s high rate of ownership, claiming it would not cloud the government’s judgment in assisting renters and improving affordability.

Questions underscore broader mistrust in political class, says political scientist 

Simon Fraser University political scientist Stewart Prest says Rezel’s questioning of conflicting interests on housing policy within the political sphere are valid and may speak to deeper issues of mistrust and transparency concerns in politics presently resonating through society.

“It becomes so much more pointed when... we're hearing calls for action to make housing more affordable, when that does cut against the financial interests not only of the housing minister, but the vast majority of elected officials in Canada,” said Prest.

“It just further underscores that gap that can exist between the governed and the governors,” said Prest.

Politicians are free to place more limitations on themselves as matters of public interest change over time, said Prest; however, public disclosures and divestment of assets are matters that must be weighed against people’s desire to hold public office; the trick, he says, is to find that right balance.

“Mistrust can lead to disfunction,” he said, “and we're going to continue to see expressions of populism and expressions of distrust of the political system, as a whole, as long as we continue to have that perception that institutions work for some but not others in society.”

“It's difficult for those who don't have access to good housing and feel like they are never going to have access to that housing market and to be able to benefit from that wealth creation. It can be frustrating to watch politicians add to their housing portfolio, because I think there's a real frustration there that needs to be addressed in some way. And this conversation can be one part of that,” added Prest.

One MP who says she has “difficulties” with the housing minister’s rental property portfolio is Vancouver East MP Jenny Kwan, although she did not specifically commit to changing conflict rules, in an interview with Glacier Media.

“When you're talking about a minister of housing who's refusing to look at the financialization of housing and his impact on the housing crisis, because he's also an investor or he also uses housing as an investment tool, I do have a problem with that happening and I do think something needs to be done around that,” said Kwan, who recently tabled proposals to curb speculative investment in housing, such as stricter enforcement of capital gains taxes and subjecting real estate investment trusts to corporate taxes.

“On the question around divesting investment properties when you become an elected official, I think it's a good question to look into, to be sure,” said Kwan.

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