Because of government cutbacks on public spending and erosion of the 'welfare' state.

Public policy and investment in housing for ordinary people while allowing the mega elite to extract as much wealth for themselves. The non-elite then use debt to maintain their standards of living.

Mortgage interest is deductible. It lets you take on more house or refinance high interest debt.

Mortgage interest is not tax-deductible in Canada.

Mortgage interest for commercial entities is tax deductible in Canada, just like any other business loan. It's only personal residential mortgages that are not deductible in Canada.

It seems to me that this difference favors landlords over owner-occupants when it comes to buying property [which does not seem to be beneficial public policy]. With interest rates as low as they are, this is maybe only a medium-sized problem, but when interest rates rise again, this is likely going to exacerbate the difficulty of people beginning their home ownership "ladder" because landlords can literally outbid them by the difference in tax policy.

That's very different than what the OP was talking about, no?

Which OP? Many upthread are talking about mortgages a subset of which would be deductible in Canada.

Tax breaks can (to use US examples, not sure how many have Canadian analogies: the mortgage interest deduction, California's property tax assesemt increase limitations, the capital gains tax exclusion on home sales) serve as incentives to take on debt for real estate purchases.