Backgrounder: Solving the housing crisis: Canada’s Housing Plan

Today, Prime Minister Justin Trudeau, the Deputy Prime Minister and Minister of Finance, Chrystia Freeland, and the Minister of Housing, Infrastructure and Communities, Sean Fraser, unveiled Canada’s Housing Plan, which responds to the significant housing challenges faced by Canadian communities. With Canada’s Housing Plan, the federal government is taking a leadership role and making investments that drive the change needed to help solve Canada's national housing crisis.

In the years since the pandemic, Canada’s housing sector has faced increasingly difficult challenges, compounded by high interest rates that slowed the economy and home construction. Today, the national housing crisis presents one of Canada’s greatest social and economic challenges. Canada needs to build more homes, faster, to meet the demand of our growing communities.

Today, the Prime Minister, the Deputy Prime Minister and Minister Fraser announced Canada’s vision and plan to solve Canada's national housing crisis. Through Canada’s Housing Plan, the government is committing to building more homes, faster; increasing housing affordability; growing the community housing sector; and, making it easier to rent or buy a home.

Canada is rising to this challenge by:

• Building more homes by bringing down the costs of homebuilding, helping cities make it easier to build homes at a faster pace, changing the way Canadian homebuilders manufacture homes, and growing the workforce to ensure we get the job done.
• Making it easier to rent or own a home by ensuring that every renter or homeowner has a home that suits their needs, and the stability to retain it.
• Helping Canadians who can’t afford a home by building more affordable housing for students, seniors, persons with disabilities, and equity-deserving communities, and eliminating chronic homelessness in Canada.

Building more homes

Making the math work for homebuilders

• Eliminating GST from new rental apartment construction projects, co-ops, and new student residences built by non-profit universities, and public colleges and school authorities.
• Reforming the Apartment Construction Loan Program (ACLP), and providing a further $15 billion in loans to build a minimum of 30,000 new rental apartments. This brings the program’s total loan funding to over $55 billion with more than 131,000 new rental homes by 2031-32, including $500 million in low-cost financing to support rental housing projects using innovative techniques. This is in addition to the $15 billion announced in the 2023 Fall Economic Statement.
• Launching Canada Builds to leverage funding from the Apartment Construction Loan Program (ACLP) to partner with provinces and territories that launch their own ambitious housing plans, increasing the impact of federal, provincial and territorial investments.
• Launching a Public Lands for Homes plan that will unlock underused public land to build more housing, accelerate the process of making public land available for housing, lease public land instead of selling it off, and create a new mapping tool to keep track of federal lands that can be used for housing.
• Announcing $20 million, through Budget 2024, for Statistics Canada and Canada Mortgage and Housing Corporation (CMHC) for modernizing and enhancing the collection and dissemination of housing data, including municipal-level data on housing starts and completions.
• Introducing the Canada Secondary Suite Loan Program, delivered by the Canada Mortgage and Housing Corporation to provide homeowners up to $40,000 in low-interest loans to add a secondary suite to their existing homes.
• Launching a $4.3 billion Urban, Rural and Northern Indigenous Housing Strategy in 2024 to establish a ‘for Indigenous, by Indigenous’ National Housing Centre, and provide additional distinctions-based investments for culturally appropriate Indigenous housing to be delivered by Indigenous governments, organizations, and housing and service providers.

Working with communities to build more housing, faster

• Providing an additional $400 million dollars to the $4 billion Housing Accelerator Fund (HAF) to incentivize an additional 12,000 new homes in the next three years so more municipalities can cut red tape, fast-track home construction, and invest in affordable housing.
• Attaching housing conditions on public transit funding by requiring that any community that wants transit funding will be required to take action that will directly unlock housing supply where it’s needed most, including:
  •     Eliminating mandatory minimum parking requirements within 800 metres of a high-frequency transit line;
  • Allowing high-density housing within 800 metres of a high-frequency transit line;
  • Allowing high-density housing within 800 metres of post-secondary institutions; and,
  • Completing Housing Needs Assessments for communities with a population over 30,000.
• Launching 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 fund will include:
  • $1 billion available to municipalities to support urgent infrastructure needs to enable more housing; and
  • $5 billion for agreements with provinces and territories to support long-term priorities. Provinces and territories can access this funding if they commit to key actions that increase housing supply, including:
    • Legalizing more housing options by adopting zoning that allows four units as-of-right and that permits more “missing middle” homes, including duplexes, triplexes, townhouses, and small multi-unit apartments;
    • Implementing a three-year freeze on increasing development charges from April 2, 2024 levels for municipalities with a population greater than 300,000;
    • Adopting forthcoming changes to the National Building Code to support more accessible, affordable, and climate-friendly housing options;
    • Providing pre-approval for construction of designs included in the government’s upcoming Housing Design Catalogue; and,
    • Implementing measures from the forthcoming Home Buyers’ Bill of Rights and Renters’ Bill of Rights.
  • Provinces will have until January 1, 2025 to secure an agreement, and territories will have until April 1, 2025. If a province or territory does not secure an agreement by their respective deadline, their funding allocation will be transferred to the municipal stream.

Changing the way we build homes

• Allocating $11.6 million to the development of a Housing Design Catalogue, which will provide builders and municipalities with a set of standardized designs that will streamline planning, development, and approval processes of new home build.
• Launching the new Homebuilding Technology and Innovation Fund. This Fund will provide $50 million delivered through Next Generation Manufacturing Canada (NGen) to help scale-up, commercialize, and promote adoption of innovative housing technologies and materials in Canada’s homebuilding industry, including for modular and prefabricated homes.
• Investing $50 million over two years for Canada’s regional development agencies to support innovative housing projects, including those in modular housing, automation, and robotics.
• Simplifying the way that Canada builds homes by making specific changes to the National Building Code to support factory build-housing and changes to allow more multi-bedroom apartments in existing neighbourhoods.
• Providing $500 million in low-cost financing for new apartments that use innovative prefabricated homebuilding techniques through the Apartment Construction Loan Program (ACLP).

Growing and training the workforce

• Providing an additional $50 million in the Foreign Credential Recognition Program, building on the federal government’s previous $115 million investment, with a focus on residential construction to help skilled trades workers get more homes built.
• Providing $10 million for the Skilled Trades Awareness and Readiness program to encourage high school students to enter the skilled trades, with an additional $90 million for the Apprenticeship Service, creating apprenticeship opportunities to train and recruit the next generation of skilled trades workers.

Making it easier to rent or own a home

Protecting renters

• Launching the new $15 million Tenant Protection Fund, through Budget 2024, to provide funding to provincial legal services and tenants’ rights advocacy organizations to better protect tenant rights and ensure that renting a home is fair, open, and transparent.
• Creating the Canadian Renters’ Bill of Rights, in partnership with provinces and territories, to require landlords to disclose a clear history of apartment pricing, significantly reduce renovictions, and create a nationwide standard lease agreement to give renters more agency.
• Strengthening the Canadian Mortgage Charter, and working with fintech companies, credit bureaus, and lenders to prioritize tools so that renters can report and record their rent payment history, strengthening their credit scores, ensuring they get credit for on-time rent payments, and unlocking pathways to become homeowners.

Getting you into your first home

• Extending the limit on insured mortgage amortizations for first-time buyers acquiring new builds by five years to increase access to mortgages for younger Canadians.
• Strengthening the Canadian Mortgage Charter to support access to fair, reasonable, and timely mortgage relief measures from their federally regulated financial institutions.
• Leveraging the tax-free First Home Savings Account to help Canadians meet their saving goals and purchase of their first home, faster. The tax-free First Home Savings Account is already helping over 750,000 Canadians save faster for their first downpayment.

Supporting current homeowners

• Extending the grace period for when homeowners are not required to repay their Home Buyers’ Plan withdrawals to their RRSP, from two to five years, for all those who withdraw between January 1, 2022 and December 31, 2025.
• Launching the Canada Green Buildings Strategy to focus on lowering home energy bills and reducing building emissions by supporting energy efficient retrofits. $903.5 million will go toward the Canada Greener Homes Affordability Program, renewing and improving existing energy efficiency programs, and continuing to develop national approaches to home energy labelling.

Protecting Canada’s existing housing stock

• Creating a short-term rental enforcement fund which will provide $50 million for municipal enforcement of restrictions on short-term rentals, and increase long-term rental units.
• Extending the ban on purchasing residential property by foreign investors, legislated through the Prohibition on the Purchase of Residential Property by Non-Canadians Act, until January 1, 2027.

Helping Canadians who can’t afford a home

Increasing the supply of affordable housing in Canada

• Providing $1 billion to the Affordable Housing Fund (AHF) in addition to the $1 billion top-up announced in the 2023 Fall Economic Statement, bringing the total funding to over $14 billion, to reform and strengthen the program.
• Launching a $1.5 billion Canada Rental Protection Fund to help community housing providers acquire affordable rental units at risk of being sold to investors and repriced in order to preserve their affordability over the long term.
• Launching the $1.5 billion Co-operative Housing Development Program to support new co-operative housing developments across the country.

Providing funding to communities to help end homelessness

• Providing additional investments of $1 billion over four years to stabilize Reaching Home: Canada's Homelessness Strategy.
• Investing $250 million to address the urgent issue of encampments and unsheltered homelessness in communities across Canada, supporting the most vulnerable and ending encampments as vulnerable Canadians transition into dignified housing solutions.