$6B federal infrastructure fund to help build homes comes with strings attached
OTTAWA — The upcoming federal budget will include a $6-billion infrastructure fund that would require provinces and territories to adopt certain housing policies in order to access the money, Prime Minister Justin Trudeau said Tuesday.
Trudeau was in Dartmouth, N.S., alongside Housing Minister Sean Fraser as part of the government’s pre-budget tour, which aims to drum up attention and win back support for the Liberals on cost-of-living issues.
“Building more homes faster — this is how we’ll address the shortage of housing options for Canadians, and this is how we’ll make it fairer for younger generations who feel like they’re falling behind because housing costs are too high,” Trudeau said.
The federal government plans to make $1 billion directly available to cities for urgent infrastructure needs, with that money flowing in the 2024-25 fiscal year.
The other $5 billion would be allocated to agreements with provinces and territories meant to support long-term priorities. That funding would flow over a longer period of time, with those details hammered out during negotiations.
Municipalities have been aggressively urging the federal government to commit more dollars toward infrastructure, noting their communities cannot significantly ramp up homebuilding to match population growth without things like water supply and roads.
While Tuesday’s announcement appears to respond to that plea, the federal government is also using the infrastructure fund to push provinces and territories to co-operate on the Liberal government’s housing agenda.
To access funding, provinces and territories would have to agree to a set of conditions, including the adoption of the recently announced renters’ bill of rights, which would create a national standard lease agreement and require landlords to disclose previous rent prices.
The federal government is also demanding that provinces and territories freeze development charges for three years and require municipalities to broadly allow the construction of fourplexes.
Finally, it wants provinces and territories to adopt upcoming changes to the national building code as well as automatically approve the construction of homes that follow designs taken from the Liberal government’s upcoming housing design catalogue.
The deadline to secure a deal will be Jan. 1, 2025, for provinces and April 1, 2025, for territories.
If a province or territory doesn’t secure a deal by those deadlines, their funding will be transferred to the municipal stream of the infrastructure fund, the government said.
The announcement is being met with pushback from some premiers who are displeased with the federal government’s decision to place conditions on provinces and territories.
Last week, Ontario Premier Doug Ford said his government would not introduce legislation to automatically legalize fourplexes across the province, arguing that such a move would lead to pushback from some residents.
A spokeswoman for Ontario Housing Minister Paul Calandra said the provincial government will wait for more details from the federal government and is open to collaboration.
“However, we know that local municipalities know their communities best and don’t believe in forcing them to build where it doesn’t make sense,” said Justine Teplycky.
New Brunswick Premier Blaine Higgs said he hadn’t read the details yet but called the threat to redirect funding directly to municipalities if provinces don’t agree to the conditions “a bit unfortunate.”
Meanwhile, Premier David Eby welcomed the federal government’s decision to attach strings to the funding.
“If provinces don’t step up … the money should come to the provinces who are doing the work,” Eby said.
Rising shelter costs have ratcheted up the pressure on all levels of government to do more on housing.