Canada’s Finance Minister is defending the 2023 federal budget’s lack of new funding for more affordable housing, saying policies announced in last year’s budget address the crisis of unaffordable real estate and rents hitting many communities across the country.
Speaking alongside B.C. Premier David Eby at a clean-energy news conference in Surrey, B.C., on Thursday, Chrystia Freeland touted the $1.9-billion over five years – growing to $4-billion over seven years – for an urban, rural and northern Indigenous housing strategy to address Canada’s “shameful gap” in addressing that need.
But, she then pointed to last year’s $10-billion in new housing money and said a central plank of that – a $4-billion program for municipalities to get projects funded – is now rolling out with the goal of building 100,000 more units.
“You don’t deploy $10-billion in one month or in one year,” she said of the unspent money in the multiyear plan.
Asked about the lack of new federal housing funds, Mr. Eby, whose government’s budget announced $1.9-billion in housing investments last month, told reporters that British Columbia will continue to push Ottawa to get its fair share of this money.
Mr. Eby praised the investment in Indigenous housing, but then pointed out: “There are very significant parcels of federal housing funding from the last budget that have yet to be deployed in a significant way in British Columbia.”
Earlier in the week, his Finance Minister Katrine Conroy was more critical.
“I am disappointed there doesn’t seem to be funding for the housing that we have been asking for,” she told reporters in Victoria.
Housing advocates also expressed their disappointment this week that the budget did not contain broad new funding to increase supply. On Thursday, Ms. Freeland acknowledged the crisis and the growing need for more housing given Canada is accepting an increasing number of immigrants each year. But several organizations said Ottawa is failing to take the necessary steps to ensure that everyone has an affordable place to live.
“It’s clear that the federal government does not see the scale and urgency of these crises, and have offered no solutions,” says Tim Richter, president and chief executive officer of the Canadian Alliance to End Homelessness. The alliance had called for targeted rent support. It also called the budget a failure that “does nothing to prevent the wave of new homelessness that is crashing down in communities across Canada.”
He said the country is losing affordable housing faster than it is building it. Mr. Richter cited a recent study by McMaster University professor Steve Pomeroy that found the 46,000 units were lost each year between 2016 and 2021 – more than double the approximate 20,000 new homes built annually with money from the federal government over that span.
Canada’s apartment vacancy rate was 1.9 per cent last year, the lowest level in more than two decades. Ottawa has estimated that the country needs 3.5 million new homes by 2031 to house a growing population. That would require housing starts to double from an annual average of around 200,000 units to nearly 400,000.
The housing strategy was introduced in 2017 amid the real estate frenzy in Toronto and Vancouver. It initially had a $40-billion budget to be spent from 2017 through 2028. But as the country’s affordable housing problem has worsened, the budget for the housing strategy has more than doubled, according to an estimate released last month by the non-partisan Parliamentary Budget Office.
Residential Construction Council of Ontario president Richard Lyall said the government should have taken more measures in its new budget, such as waiving the sales tax for new housing projects.
“We have a crisis on our hands and need to build more homes quickly and make them affordable,” he said. “The budget is nibbling around the edges of the problem and doesn’t fully address the systemic problems that are delaying construction of much-needed housing.”
With files from Bill Curry in Ottawa