Under Pierre Poilievre’s housing plan, missed construction targets would see cities lose funding

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Conservative Leader Pierre Poilievre wants the federal government to impose a carrot-and-stick approach to housing construction that would leave cities in a financial hole if they miss construction targets and federal housing agency executives out of a job if they don’t meet strict approval deadlines.

The Conservatives tabled legislation Wednesday that would also offer a less lucrative tax break for new apartment building construction than the one announced by Prime Minister Justin Trudeau last week.

Mr. Poilievre proposed the policy changes through a private member’s bill, which is unlikely to pass given that the Liberals pre-emptively said they won’t support it.

The Conservative Leader told the Commons his Building Homes Not Bureaucracy Act was needed “now more than ever” as housing and rent prices become more unaffordable amid a supply shortage. He said the proposed law would eliminate the need for federal bureaucratic processes that he said have delayed rather than spurred housing construction.

One expert cautioned that while the bill sets out worthwhile goals, they might not be achievable even if cities met the demands because the construction sector is already operating at capacity.

“The industry is already operating at capacity,” BMO senior economist and director of economics Robert Kavcic said, citing record job vacancies in the construction sector and skilled-labour shortages.

“It could get a bit awkward if the municipalities are creating conditions for more supply, but builders are not taking it up because of market conditions or capacity restraints.”

The Liberals and NDP dismissed Mr. Poilievre’s plans saying the Conservative Leader’s record on housing when he was in then-prime minister Stephen Harper’s cabinet disqualifies him from being trusted to deliver on the issue.

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Under the proposed law, cities deemed to be “high-cost” municipalities would be subject to a new home completion target that increases by 15 per cent each year. That means that within five years the number of home completions would have to double from 2023.

When asked for a comment on Wednesday, the Federation of Canadian Municipalities said it was still reviewing the policy.

If a city falls short on the target it would lose a proportional amount of infrastructure funding, Mr. Poilievre told the House of Commons. For example, if a city missed the target by 1 per cent, it would get 1 per cent less in federal cash. Conversely if it beat the target, its federal funding would increase.

“It is a simple mathematical formula for which no new forms, no new bureaucracy and no new delays are required,” the Conservative Leader said.

Mr. Poilievre did not speak with reporters about the bill and the party did not provide a briefing on it.

Under the proposed law, cities would only receive federal infrastructure and transit funding if they do not “unduly restrict or delay” decisions on building permits for housing.

The Conservative bill would require municipalities to approve or reject permits within an average time frame of six months. Individuals would also be able to lodge complaints with the responsible minister if they believe a city is not following the law.

Federal transit funding for cities would also be held in trust until the municipality could show that high-density residential housing was built and “substantially occupied” on land around federally funded transit stations.

The Conservative party did not explain what would qualify as “substantially occupied.”

Municipalities would be subject to the new law if they have a population of more than 200,000 people and benchmark home prices at least five times greater than the median household income for the same jurisdiction, the party said.

In the law, Mr. Poilievre also proposes firing members of the Canada Mortgage and Housing Corporation’s executive committee and executive-level staff if they don’t meet deadlines for project applications for a prolonged period.

Terminations would be the last penalty in an escalating formula that would begin with reducing salaries.

Separately the executive committee and executive-level staff would only get their bonuses if the national housing construction target is met in a given year.

Rather than eliminate the 5-per-cent federal goods and services tax from all new apartment construction, the Conservatives would only lift the GST for those buildings that would have rents that are below market rates.

On Monday, Housing Minister Sean Fraser lambasted the idea, noting that if Conservatives were to form government and go ahead with their plans, they would end up raising taxes on new rental construction, because the Liberals last week lifted the GST for all new apartment construction.

The Sept. 14 decision by his government was widely heralded by industry groups, provinces, and economists as an important change that would lead to more rental construction.

The Conservative bill also proposes selling 15 per cent of federal buildings and all appropriate federal lands for housing development.