PM launches plan to ‘solve’ housing crisis
Trudeau says the multibillion-dollar strategy would build almost 3.9 million homes by 2031
The federal government is revamping its housing efforts with a new, multibillion-dollar plan based on a bold and politically-significant premise: This is how the Trudeau Liberals will help “solve” Canada’s housing crisis.
Released Friday, the new plan capped off the government’s prebudget rollout of new housing measures over the past two weeks, and contained a suite of spending and policy changes aimed at spurring construction and helping those who are struggling to buy homes, pay rent, and find shelter from the streets.
In an interview with the Star before the policy was released, federal Housing Minister Sean Fraser defended the sweeping claim that the plan can “solve” the long-running housing crisis — which has seen home prices almost double since 2015, as rents have soared beyond incomes and vacancies have constricted in the market amid decades-high population growth driven by immigration.
Fraser also said he believes the new plan will ensure Canada can “exceed” the housing construction shortfalls identified in recent reports. That includes one the Parliamentary Budget Officer published on Thursday that said the country needs to increase the number of houses it builds each year — which is already at a record high — by 80 per cent to meet expected demand. On Friday, Prime Minister Justin Trudeau said the plan would build “almost 3.9 million” homes by 2031.
The total cost of the new plan is expected to be released in next week’s federal budget.
“Ambitious as it may be, the comprehensive nature of the policies that we are committing to and in many cases implementing already, I sincerely believe, will allow us to solve the housing crisis,” Fraser told the Star.
“I’m not interested in making marginal improvements to a very serious problem that is in the national interest to solve. I’m interested in solving it.”
While groups such as the Canadian Alliance to End Homelessness lauded the strategy as comprehensive and ambitious, University of Toronto housing expert David Hulchanski is skeptical. Hulchanski argues the new strategy doesn’t offer clear enough definitions of the problems at hand or its own targets — including the “middle class” it aims to assist — and does not address enough the widening gap between household earnings and home costs.
In recent days, the federal government has unfurled a series of housing announcements that are part of Friday’s plan. It promised a new $6-billion fund for infrastructure to support housing, like water and wastewater systems, for provinces that allow increased density. It has also looked to create a “bill of rights” for renters and offer billions more in loans for rental construction.
Friday’s plan makes a flurry of new commitments, from $1.5 billion for a new co-op development program to $1 billion to an existing program that offers loans to those building and repairing affordable housing — a continued need in cities like Toronto, with more than 2,300 tenants still living in critically broken complexes years after Ottawa started offering new repair money in 2019.
Among its ambitious targets, the new housing plan eyes an erasing of homeless encampments countrywide — a problem that is currently trending in the opposite direction in Toronto, with city data showing twice as many tents citywide this March compared to last. The solution being proposed is a $250-million fund, with the idea the money would be matched by provinces and territories, handed out to those that can prove “human rightsbased community action plans” — to include proposals around creating new supportive and transitional housing as well as rent supplements.
It comes as some cities have been forced to stop intake for an existing rent supplement program — the Canada-Ontario Housing Benefit — with the head of homelessness initiatives for Toronto, Gord Tanner, telling the Star their last funding batch ended at the end of March, and has yet to be renewed amid a dispute over housing targets between the federal and provincial governments.
Fraser, when asked about the stalemate, pointed to continued disagreement between the two governments on their homebuilding targets. “We are going to look for ways to deliver that money directly to the organizations or people who are relying on it,” he said, demurring when asked exactly when housing workers might be able to access the funds again. “This is not going to sit on anyone’s desks for months. This is going to be dealt with very, very soon.”
Conservative Leader Pierre Poilievre, whose criticism over housing has helped put the crisis at the top of the federal political agenda in recent months, frequently blames Prime Minister Justin Trudeau for “the rise of tent cities” in places across Canada, as rents and home prices have increased.
Among policies aimed at spurring more homebuilding, the plan promises to increase the amount builders can claim in tax deductions, by increasing the capital cost allowance from four to 10 per cent for apartment projects that begin construction before the start of 2031 and are ready by 2036. The government also intends to extend last year’s removal of the federal sales tax from apartment construction to student housing projects at public institutions.
The plan does not say how much each of those measures is expected to cost.
Other measures announced Friday include a proposal to restrict the purchase of single-family homes by “very large, corporate investors” — though Fraser declined to offer an example, saying details of who would be affected and what types of homes could be restricted would be ironed out in consultations.
The plan also promises low-interest loans of up to $40,000 for homeowners who add secondary suites to their properties, in a bid to increase density, and outlines a series of steps aimed at building capacity in the homebuilding sector.
That includes $100 million to programs aimed at attracting students to the skilled trades, and $50 million to “streamline” official recognition of foreign credentials with a focus on home construction skills, as Fraser predicted a coming “bottleneck” where the country’s capacity to build houses is strained.
The plan eyes new investments into fledgling homebuilding methods like factory-built or modular housing, while some municipalities have raised concerns about having to compete for contractors and supplies on the tight deadlines agreed to in order to secure funding for these homes.
The plan also doubles down on past government vows to “unlock” more surplus government lands for housing, and promises $1.5 billion in funding for the purchase and protection of affordable homes — offering deeper pockets than similar programs run on a local level, such as Toronto’s multi-unit residential acquisition program, which has a budget of $100 million over three years.