– Still does way too little for those most in need.
In a budget that really highlighted housing, it is disappointing that it contained relatively little for those who most need affordable homes.
The government’s major new initiative to build deeply affordable housing, supportive housing, and shelters is to make the Rapid Housing Initiative permanent. That was strongly encouraged and is welcome. But the amount proposed—$976 million over five years—is deeply disappointing. The first three rounds of the Rapid Housing Initiative were $1 billion or $1.5 billion per year.
As if to underline how inadequate that is, the budget itself says: “Today, our community housing sector accounts for only 4 per cent of Canada’s housing market, while 10 per cent of Canadians are low-income and in need of affordable housing.”
Spending on everything to do with housing is up by just $1 billion. An increase is welcome—especially since there was almost nothing a year ago—but here’s some perspective. If all of that $1 billion were used to build non-profit or co-op housing, the result would be about 7,000 new units, according to the budget. Hamilton alone likely needs about twice that number. And we’re less than 2 per cent of Canada’s population. We have 28,055 households in what is called core housing need—paying too much, overcrowded or in homes needing major repairs and no more affordable, appropriate homes available in our community.
The budget also gives no hint about what will happen to federal support for existing non-profit and co-operative housing beyond 2028, and there’s no new money for them this year.
The budget provides $1 billion, over four years, that is badly needed for homelessness programs. Of this investment, $50 million will focus on accelerating community-level reductions in homelessness. And there’s $250 million over two years, to address the urgent issue of encampments and unsheltered homelessness—if provinces match it. The money is to “help communities scale-up their efforts to train homelessness support workers, respond to the unique experiences of those affected by unsheltered homelessness, including those living in encampments, and renovate and build more shelters and transitional homes for those who need them.” Again, this is needed. But the real key to moving people out of homelessness is lots and lots and lots of new supportive, co-ops and affordable non-market housing units, which aren’t provided for.
There are good things in the budget.
There’s $477.2 million, over five years, to launch a new $1.5 billion Canada Rental Protection Fund, to support affordable housing providers buying existing affordable units to preserve those rents forever and prevent the buildings from being turned into expensive rental or condo units. This is badly needed and most welcome. We currently lose 15 or 20 of these units for every new affordable unit built.
The budget focused a lot of space on using surplus federal land for housing, including military properties, vacant or under-used federal office space, and Post office sites (one in Binbrook was specifically mentioned). And the budget says most of this land will be leased for $1, rather than sold, which is also terrific. That will lower costs to build new homes and keep the land affordable long-term. The budget estimates using federal lands might produce 250,000 homes, but for some reason only about 20 per cent are expected to be affordable. That land should all be used for non-profit or co-op housing and the affordable percentage much higher.
There is also $500 million, over five years, to buy land from other governments for housing. That’s terrific—and it should be used for non-profit or co-op housing.
There’s $409.6 million, over four years, to launch a new Canada Secondary Suite Loan Program, enabling homeowners to get $40,000 in low-interest loans to add secondary suites to their homes. Details are to come but there needs to be a requirement that, in exchange for the loan, the units will have affordable rents.
The government is considering a new tax on vacant residentially-zoned land, with consultations this year.
There’s support for a number of technical things, including changed regulations on design and fire safety, and incentives for construction innovations including modular homes. All useful.
There’s $20 million over four years to modernize housing data. There are important data sets that we don’t have, especially on rents, evictions and landlord profits, that would be useful to know to better guide policy.
An excellent measure is a temporary accelerated capital cost allowance for new purpose-built rental projects. It does not change the total amount of depreciation expenses being deducted over time, it simply accelerates it, which allows homebuilders to recover more of their costs faster, enabling further investment of their money back into new housing projects. Estimated cost is $1.1 billion over five years. This reverses a decision made in 1972 that started the decline in private rental housing construction.
A lack of workers is a challenge to getting homes built. The budget includes $90 million over two years, starting in 2024-25, for the apprenticeship programs and $50 million over two years to streamline foreign credential recognition in the construction sector. There’s no estimate of how many new construction workers these steps might produce.
There’s $15 million over five years, for a new Tenant Protection Fund, to fund legal and informational services to tenants. The program is welcome but the amount is trivial—$3 million a year scattered across all of Canada.
A program to allow tenants to opt-in to having their rent payment history included in their credit scores could help those looking to move from renting to owning if they have a history of on-time payment. It’s vital that this not be compulsory and that not divulging one’s rent payment history not penalize tenants.
There are provisions to make it a bit easier to buy a first home, including a higher amount that can be withdrawn from RRSPs and the possibility of 30-year mortgage terms instead of 25 to lower monthly payments if the home is newly built. The conditions are narrow and not many will benefit.
Finally, the budget includes $1.1 billion over three years to extend the Interim Housing Assistance Program to shelter refugees. Many municipalities including Hamilton had asked for more funding. Hamilton spent about $10 million to shelter refugees in 2023 and received about $3.5 million from the program.
You can read an analysis from the Women’s National Housing and Homelessness Network: https://womenshomelessness.ca/budget2024/