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Real Estate News

Budget 2021: Liberals to Allocate $3.8B for Affordable Housing, Building, and Repair

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The Liberal government has released what is likely the most anticipated federal budget of our time, in the midst of a grave economic disruption caused by the COVID pandemic.

On Monday, Deputy Prime Minister Chrystia Freeland unveiled her first budget as Federal Finance Minister. The budget is also the Liberals’ first in two years; it announces $101.4 billion in new spending, aimed at both supporting the country through the third COVID wave, and stimulating post-pandemic economic recovery.

The budget, “A Recovery Plan for Jobs, Growth, and Resilience,” shows that the federal deficit is projected to sit at $354.2 billion for 2020, while it’s slated to drop to $154.7 billion in the current 2021-22 fiscal year.

The budget shows that $3.8 billion in new and re-assigned funding will be allocated for affordable housing, the Canada Housing Benefit, and other initiatives which will serve to build, convert, or repair 35,000 units across Canada. These funds will be distributed over the course of seven years.

READ: Opinion: What the Liberal Budget Should Introduce for Canada’s Red-Hot Real Estate Market

What’s more, the budget shows $612 million will be dedicated to homelessness strategy, including veterans, over two years.

“This budget lives up to our promise to do whatever it takes to support canadians in the fight against COVID,” said Freeland. “And it makes significant investments in our future.”

Leading up to the release of the budget, speculations were swirling in regards to how the Liberals planned to cool the country’s booming housing market.

Benjamin Tal, deputy chief economist at CIBC, said earlier this month that he thought there would be some measures to slow demand, but added, ”the real issue is supply and this is something we need to start working on.”

And while adding supply is a long-term solution, Tal added, “The big issue in the GTA and other places like Vancouver is simply a lack of supply given the significant increase in demand.”

With files from Ainsley Smith.

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