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federal budget 2016

A house with an asking price of $2.4-million is pictured during an open house in Vancouver on Feb. 2, 2015.Ben Nelms/The Globe and Mail

The federal Liberals say they will inject more than $2.3-billion into a series of affordable-housing measures, including a new program to offer low-cost loans to developers to build as many as 10,000 rental units.

New spending on affordable housing represents roughly $1.5-billion of the money the government earmarked for infrastructure investment.

Combined with $742-million in spending on building or upgrading housing for aboriginal and northern communities, affordable housing forms the largest share of the government's $3.4-billion spending on what it calls "social infrastructure."

Ottawa said a "significant amount" of the money would be given directly to provincial and territorial governments that can decide which community projects will get funding.

Among the new measures is a plan to provide up to $500-million a year in low-cost loans for municipalities and housing developers to build affordable rental housing projects for five years.

It will be up to Canada Mortgage and Housing Corp. to design and implement the program, which Ottawa said could fund the construction of more than 10,000 rental units by "making low-cost capital available to developers during the earliest, most risky phases of development."

The budget also includes a separate plan to spend $208-million over five years to create an "Affordable Rental Housing Innovation Fund" that would test new approaches to spur development of affordable housing, such as housing models that have a mix of ownership and rental units.

However, much of the funding will go to topping up existing federal housing programs and agreements.

That includes $504-million in additional funding over two years toward an existing Canada Mortgage and Housing Corp. program that transfers money to the provinces for low-income housing projects, as long as the funds are matched by lower levels of government or other private sector or charitable organizations. Between 2011 and the last federal election, provinces and territories used little more than half of the nearly $2-billion CMHC had earmarked for the program.

The Liberals also pledged $200-million in funding to build or upgrade affordable seniors housing. The money would also flow through the same CMHC program, although provinces wouldn't be required to match it.

Another $90-million will go to build or renovate 3,000 shelters for victims of domestic violence, while $574-million will be put toward renovations and energy upgrades for 570,000 existing social-housing units.

Social-housing groups had pushed the government to renew long-term financial commitments that help provide subsidized rental units and were set to expire.

While the Liberal budget promises $30-million over two years to continue the funding commitments, the new government made it clear it is looking for a different arrangement, saying the funding was a "time-limited" offer while Ottawa consults with provinces and industry to "help the social housing sector achieve self-reliance."

As part of that process, the Liberals said they would consult with other levels of government and aboriginal communities to develop a national housing strategy.

The Liberals had campaigned on a pledge to provide $125-million a year in tax incentives by removing the GST from new capital investments on low-cost rental housing and a commitment to review all federal land and real estate and make some of it available for new affordable-housing projects. Both campaign promises were missing from the budget.