As of Tuesday afternoon, Ontario’s 2024 budget is in the public eye. The Province is calling this one Building a Better Ontario, which hints at the host of infrastructure-related investments it entails, as well as as its somewhat roundabout focus on getting more housing off the ground.
At a high level, the reactions to this year’s budget have been positive, with the Ontario Real Estate Association commending the Province in a statement for its $190B investment into critical, housing-enabling infrastructure over the next decade, and noting that are all “necessary improvements to support new communities and economic growth.”
The Toronto Regional Real Estate Board released commentary to a similar tune on the infrastructure note and also applauded the Province for going “all-in” on modular housing innovation in the hopes of bringing more affordable housing supply into the market.
There are other housing-adjacent measures this year’s budget hones in on as well — and more on those below — but even so, the concern amongst some real estate experts and stakeholders is that the investments laid out by the Province barely scratch the surface of the housing challenges municipalities are actually facing.
“No Central Focus On Housing”
“There were a few initiatives in the budget that will help in terms of supply-side policies, and also some demand-side policies. So that’s promising and encouraging to see,” says Karen Yolevski, Chief Operating Officer of Royal LePage's corporately owned brokerages.
Yolevski points to how the budget enables municipalities to reduce the municipal property tax rate on new multi‐residential rental properties, which is a move meant to stimulate the creation of more purpose-built rentals.
“So that’s welcomed and applauded that an initiative like that is in there, however, it's not as sweeping as we could have potentially seen or would have liked to see,” she says. “It's also an encouragement, not something definitive. And it’s targeting rental properties, whereas there's a number of people that are looking to move from rental to homeownership, and there's not a lot in the budget to support them.”
More broadly, Yolevski tells STOREYS that her concern with this year’s budget is that there was “there was no central focus on housing.”
“It would have been great to see more money directly targeting the development of homes at various price points for Ontarians,” she adds. “It also would have been wonderful to see more investment in the missing middle.”
Budget Out Of Touch With Housing Crisis?
We’ve seen no shortage of focus on cracking down on foreign buyers from from federal and municipal levels of governments over the past few months, and Ontario has followed suit. This year’s budget not only empowers all single- and upper-tier municipalities that don’t already have a Vacant Home Tax to implement one — and teases a new framework that will be available to these municipalities with best practices for implementation — but it also touches on “strengthening” the Province’s Non-Resident Speculation Tax, which has been in effect since 2017.
“However, we know that these policies don't have a meaningful impact on supply,” says Yolevski. “So while the idea is understandable, the impact isn't significant enough to make it have a valuable impact on supply.”
On the contrary, Assistant Chief Economist for RBC, Robert Hogue, argues the Province’s latest budget hits a lot of pain points when it comes to housing. With respect to the vacant home and non-resident speculation taxes, Hogue believes that the Province was right to hone in on them in this year’s budget. He feels that they can’t be judged for efficacy as a stand-alone measure, but rather should be viewed as one piece in the Province’s “greater housing plan.”
“We don't think they're going to move the needle that much, but I think we have to look at it as a whole of all of the policy measures that have been put in place,” he says.
Meanwhile, the Province is investing $100M more in the Skills Development Fund Training Stream to address challenges in hiring, training, and retaining workers as part of the 2024 budget, as well as an additional $16.5M in a Skilled Trades Strategy to attract new talent. This too is promising, Hogue says to STOREYS.
“Because the number of homes that we need to build is not just a little bit of a small increment — no, we need a significant increase in those numbers — so we need to grow the capacity to build more housing in Ontario,” he says. “While the budget does contain some added spending on programs to attract and develop the skilled trades, we encourage the government to continue to do more.”
'Waiting For A Housing Bill'
When it comes to the skilled trades piece of the budget, President of the Residential Construction Council of Ontario, Richard Lyall, worries that the Province’s investment at this stage in the game is a bit out of step with what the building industry really needs right now.
“We’re starting to see layoffs in the low-rise industry. We’re going through a bit of a downturn,” Lyall says. And although he acknowledges that things will eventually start to look back up, his concern is that Province isn’t doing much in the way of “fixing” the deeper issues with the system at hand.
“What we really need right now is structural, systemic change in the system,” he says. “One thing I would say is that, because people that are in the skilled trades learn on the job, the employer is really the educator and we've got to start treating employers like educators with respect to skilled trades. You know, the government provides a per-capita payment to colleges and universities every year per student — well, employers should get something similar to that for training skilled tradespeople. Skilled trades are still not getting the financial parity with colleges and universities.”
While Lyall says what the Province put on Tuesday is a “respectable budget,” he also feels that, as far as housing is concerned, “there wasn’t much there.” This is not something he finds necessarily surprising, as Minister Paul Calandra’s next Housing Supply Action Plan is due to come out soon.
“We expect a housing bill of some kind or a red tape bill to come to spring, you know, in the next month or two,” he says. “So that's really what we're looking out for.”
