Trudeau continues his spree of housing announcements as we near Budget Day next week. This time, he zeroed in on the construction industry and helping those struggling to find housing – from facilitating the dream of homeownership to transitioning the unhoused – in the release of the new, multi-billion dollar plan.
The plan lays out a bold (and very ambitious) strategy to unlock 3.87 million new homes by 2031.
“We are changing the way we build homes in Canada," said Prime Minister Trudeau. "In our housing plan and Budget 2024, we are delivering ambitious action and investments to build more homes, make it easier to rent or own, and help the most vulnerable with stable housing. This is about restoring fairness for every generation, and housing is at the heart of that.”
So, today’s 28-page Solving the housing crisis: Canada’s Housing Planpromises to direct major dollars to help battle the country’s housing crisis and deliver more homes. This means $1.5 billion for a new co-op development program. It also means allocating $1 billion to an existing program, which provides loans to those building and repairing affordable housing.
The Liberal government turned its focus to the impossible-to-ignore reality that housing encampments are growing in cities like Toronto, promising to eliminate these illegal communities throughout the country. The golden solution comes in the form of a $250-million fund, a figure that would be matched by provinces and allocated to impactful community action plans designed to get people out of tents and into housing. This includes creating more supportive and transitional housing and providing relief on the rental front. Furthermore, the government announced that it would top up the Reaching Homes federal homelessness initiative with another $1 billion over four years.
Quality Of Life Worse For Renters Over Homeowners, Data Suggests
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For renters, Trudeau announced the launch of a $1.5 billion Tenant Protection Fund to offer funding to legal services and tenants’ rights advocacy organizations to better protect tenants against unfairly rising rent payments, renovictions, or bad landlords.The government is also helping Canadians who can’t afford a home by creating more affordable and rental housing. This means $1 billion for the Affordable Housing Fund to build affordable homes, launching a permanent Rapid Housing Stream, and the launch of a $1.5 billion Canada Rental Protection Fund to protect and expand affordable housing.
The plan also introduced the idea of leveraging rental payment history to improve credit scores, helping potential homebuyers qualify for a mortgage and better rates. On the homeowner front, Trudeau announced his government would be increasing the Home Buyers’ Plan withdrawal limit by $25,000 and extending the grace period to repay by an additional three years. Yesterday, his government announced that it would extend mortgage amortizations to 30 years for first-time buyers buying newly built homes (a move that wasn't without its critics).
Echoing the sentiment of RBC economist Richard Hogue in his latest report, the Prime Minister also announced new measures included in Canada’s Housing Plan to attract, train, and hire the skilled-trade workers Canada needs to build more homes.This means $90 million for the Apprenticeship Service, creating apprenticeship opportunities to train and recruit the next generation of skilled trades workers; $10 million for the Skilled Trades Awareness and Readiness program to encourage high school students to enter the skilled trades; and $50 million in the Foreign Credential Recognition Program, with a focus on residential construction to help skilled trades workers get more homes built.
Toronto Construction / Shutterstock
Toronto Construction / Shutterstock
Today’s announcement also turned to tax incentives. Trudeau said that his government would increase the capital cost allowance rate for apartments from 4% to 10%, something that will increase the amount that builders can write off come tax time. On that front, the government also wants to restrict corporate investors from scooping up existing single-family homes.
The government also announced $15 billion in additional loans for the Apartment Construction Loan Program to build a minimum of 30,000 new rental apartments in big cities, small towns, and rural communities will be proposed in Budget 2024. With this additional financing, the program is on track to build over 131,000 new apartments by 2031-32. Meanwhile, Canada Builds offers a 'Team Canada' approach tobuilding affordable homes for the middle class on under-utilized lands across the country. Canada Builds combines federal low-cost loans with provincial and territorial investments to scale up construction on rental homes for the middle class across the country.
Student housing (or lack thereof) has also become an incredibly pressing issue. The government announced it will extend the existing GST exemption on rentals to student residences built by public post-secondary academic facilities.
Unlocking public land for development was also front and centre. Trudeau announced that aPublic Lands for Homes Planwill lead a national effort to build affordable housing on federal, provincial, territorial, and municipal lands across the country. "We will partner with homebuilders and housing providers to build homes on every possible site across the public portfolio and ensure long-term affordability," reads a press release issued by the Liberal government.
Finally, the missing middle wasn't missing from the announcement: a new Canada Secondary Suite Loan Program will offer homeowners access to low-interest loans of up to $40,000 to incentivize them to add secondary suites to their homes.
More to come...
