The Good, the Bad and the Provincial
The details of all of the announcements Prime Minister Justin Trudeau has recently made will be in the federal budget being delivered on April 16. We don’t know when announced spending will start and how many years it will be spread over. That is particularly important since this government has only about 18 months left in its mandate.
Good News
A new $1.5 billion Canada Rental Protection Fund: $1 billion in loans and $470 million in grants to non-profit organizations and other partners so they can buy rental buildings with affordable rents and keep them affordable long-term. It is to launch later this year. This has long been needed and advocated for—we lose 15 or 20 affordable private market units for every unit of non-profit affordable housing we build. It’s not clear what it means that “the Fund will mobilize investments and financing from the charitable sector and the private sector.”
A new $6 billion Canada Housing Infrastructure Fund to accelerate the construction and upgrading of critical housing infrastructure. This includes water, wastewater, stormwater, and solid waste infrastructure to support the construction of more homes. This too is needed. But there’s a catch. There’s $1 billion available for municipalities for this infrastructure, which is good. But $5 billion will come through agreements with provinces and territories which they can only access if they agree to certain actions. One condition is to allow four units of housing on a lot, which Premier Doug Ford has already said he opposes. Another condition is a three-year freeze on increasing development charges from April 2, 2024 for municipalities with a population above 300,000. Municipalities need that money for infrastructure, so those municipal losses will partly offset the new federal infrastructure money. Another condition is provincial approval of a national home buyers’ and a renters’ bill of rights. Agreements with provinces must be reached by January 1, 2025.
Launching a new $15 million Tenant Protection Fund. This would provide funding to legal aid and tenants’ rights advocacy organizations to better protect tenants against unfairly rising rent payments, renovictions, or bad landlords. This is welcome but not much money when spread across Canada.
Conditions set for the forthcoming public transit fund: Municipalities will be required to
- Eliminate all mandatory minimum parking requirements within 800 metres of a high-frequency transit line.
- Allow high-density housing within 800 metres of a high-frequency transit line.
- Allow high-density housing within 800 metres of post-secondary institutions.
- Complete a Housing Needs Assessment for all communities with a population greater than 30,000.
A new $50 million Homebuilding Technology and Innovation Fund will seek to leverage an additional $150 million from the private sector and other orders of government to support the scale-up, commercialization, and adoption of innovative housing technologies and materials, including modular and prefabrication. Construction needs innovation. Cost savings are as yet unclear and the impact on affordability even less clear. New technologies could mean some shifting to less-skilled factory work, helping to deal with the shortage of skilled construction trades.
Providing $50 million to modernize and expedite home building through the regional development agencies. This builds on the success of dozens of existing innovative projects already funded and underway in communities across the country, including those modernizing building practices through modular housing, mass timber construction, robotics, 3D printing, and automation.
Providing $500 million to support rental housing. With low-cost financing through the Apartment Construction Loan Program, this will support new rental housing projects using innovative construction techniques from prefabricated and modular housing manufacturers as well as other homebuilders. It’s unfortunate this program will be delivered through the Apartment Construction Loan Program rather than directed into construction of non-profit and co-op housing. (See below for problems with that program.)
The Housing Design Catalogue will standardize up to 50 efficient, cost-effective, and liveable home blueprints. With $11.6 million in Budget 2024, this will include frames for modular homes, row housing, and fourplexes – that housing manufacturers, provinces, territories, and municipalities can use to simplify and accelerate housing approvals and construction timelines.
Not So Good News
A $15 billion top-up to the Apartment Construction Loan Program to build a minimum of 30,000 new apartments. We need more rental housing and this program required enhanced energy and accessibility standards but it does not produce affordable units—the minimum required in Hamilton is more than $2,100 a month. And even that only has to last a decade.
Adding $400 million to the $4 billion Housing Accelerator Fund: This additional money is supposed to -fast track construction of an additional 12,000 new homes in the next three years, which is not much impact. And these don’t need to be affordable units.
Making sure renters get credit for on-time rent payments. Ottawa will amend the Canadian Mortgage Charter and call on landlords, banks, credit bureaus, and fintech companies to make sure that rental history is taken into account in a tenant’s credit score, which would help tenants get loans or mortgages to buy a home. For tenants who have always been able to pay their rent on time, it is a useful change. But the measure would penalize tenants who have run into financial difficulties and been late with payments or tenants who deliberately withhold rent, to try to force needed repairs or as part of rent strikes.
Needs Provincial Support
Canada Builds would leverage its Apartment Construction Loan Program investments to encourage provinces to launch their own ambitious housing plans, similar to the recently announced BC Builds initiative. So provinces have to agree to do that. Plus the affordability standard is that of the Apartment Construction Loan Program, which, as already indicated, is not affordable at all.
Creating a new Canadian Renters’ Bill of Rights, developed and implemented in partnership with provinces and territories. This would require landlords to disclose a clear history of apartment pricing so renters can bargain fairly. We will also crack down on renovictions, create a nationwide standard lease agreement, and give renters more agency. All good ideas. Most are in provincial jurisdiction. Enforcement will be key and will require ongoing funding.