The federal budget was unveiled on April 7. Dubbed by some commentators as “the housing budget,” several key components of the 300-plus-page document were targeted at addressing the runaway housing prices.
There are quite a few interesting measures that aimed at increasing the supply of housing. The Liberals say their plan will put Canada on a path “to double housing construction over the next decade.”
The centrepiece of their plan to boost housing supply is the proposed $4 billion over the next five years to launch the Housing Accelerator Fund for municipalities. Municipalities would be able to use money from the fund to build housing units. Money from the fund could also be used as incentives for municipalities to cut red tape that gets in the way of approving new housing developments.
The fund has a goal of 100,000 units of new housing, which is a good start and encouraging to see concrete targets laid out (unlike Doug Ford’s housing plan). However, the federal government’s influence over municipalities is a lot more limited than provincial governments, given that municipalities exist as “creatures of the province.”
The budget is also light on details on how the money in the fund will be rolled out, so it remains to be seen how effective the federal government’s attempts at shaping municipal policies will be.
Also, on the topic of pushing municipalities to stop getting in the way of building housing, the federal budget also reaffirms the Liberals’ plans to tie $750 million in transit funding to densification.
There’s also $1.5 billion over two years to extend the Rapid Housing Initiative to create another 6,000 affordable housing units. While these investments are good news, it’s still a far cry from the 1970s, when Canada used to build 20,000 new social housing units each year, until these programs were clawed back and downloaded to other levels of government by Mulroney, Chretien and Martin.
It’s also a little odd that the Multigenerational Home Renovation Tax Credit is one of the core housing supply-oriented policies in the budget that the Liberals chose to highlight. The tax credit provides provide “up to $7,500 in support for constructing a secondary suite for a senior or an adult with a disability, starting in 2023.” While it probably will help some people, it’s a fairly niche policy and will likely do little to make a dent in our housing supply. Also, we
But not all of the housing-related proposals in the budget are good news. In fact, there are some measures that may at best do nothing to address affordability and at worst, make affordability even worse. Stay tuned for my next blog post looking into the demand-side policies.
Photo credit: curioustangles/Flickr/CC BY-NC-ND 2.0
