Fall Economic Statement 2023: a step in the right direction, but bold action is still needed
07 Dec 2023
Canada is struggling through a dramatically worsening housing crisis. Millions of Canadians – particularly those with lower incomes – have been experiencing rapidly rising housing costs driven in large part by an extreme supply shortfall.
On November 21, Deputy Prime Minister and Minister of Finance Chrystia Freeland tabled the 2023 Fall Economic Statement, described as a plan to build more homes, and make life more affordable.
The Canadian Housing and Renewal Association (CHRA) has been calling for the Government of Canada to urgently put ambitious policy measures in place to scale up Canada’s supply of community housing. Though we are pleased with the measures announced, bold action is still needed to fully address the country’s affordable housing shortfalls.
Read on to see a breakdown of our reaction to the 2023 Fall Economic Statement.
$1 billion for the Affordable Housing Fund
The National Housing Co-Investment Fund (to be renamed the Affordable Housing Fund (AHF) – is the flagship program for new community housing development. The Fall Economic Statement added $1 billion in grants and contribution funding for the program.
Based on the commitment that this $1 billion will help build 7000 new affordable homes, grants and contributions may increase to an average of about $140k per door. That funding is an improvement, but it still insufficient to meet need.
Canada must invest additional funds in AHF to provide larger contribution grants that offset the much higher cost of borrowing, relative to the first several years of the program. We are expecting to see some program changes roll out early in 2024, but we don’t yet know what those changes will be. CHRA has called for the program to be simplified, with CMHC commitments coming earlier in the project timeline. Scoring criteria for environmental performance and accessibility should be more flexible, using MLI Select as a model.
With inflation and rising construction costs, housing providers have found it increasingly difficult and, in some cases, impossible to create new housing using the Co-Investment Fund. CHRA has been consistently advocating for the federal government to inject much-needed funding into NHCF (now AHF). This new funding is welcome, but more is needed to meet the current target to create 66,700 new units of affordable housing and repair or renew 246,500 more.
CHRA is pleased with adjustments to the Co-operative Housing Development Program (announced in Budget 2022) so this long-awaited program can now move forward.
We are also pleased that the Government of Canada will be adding new co-op housing projects to the to the full GST rebate for rental development projects that begin after September 14, 2023. We continue to call for all non-market housing projects currently under construction to be eligible for the GST exemption as well.
Other measures to support the housing sector
- Additional loans in the amount of $15 billion through the revamped Rental Construction Financing Initiative (to be renamed the Apartment Construction Loan Program) will be available for the development of new rental housing. While this program is targeted to the private for-profit sector, community housing is also eligible.
- The Canada Infrastructure Bank will be leveraged to invest in building the municipal infrastructure needed for new housing development. These changes are to be announced in Budget 2024.
- Legislation will be introduced to rename Infrastructure Canada as the Department of Housing, Infrastructure, and Communities, increasing its mandate on housing policy and program development.
- New resources will become available for municipalities and provinces to help enforce short-term rental restrictions.
- A new Canada Mortgage Charter will build on existing federal guidelines for financial institutions to provide mortgage relief measures to support households with increasing mortgage costs.
More action is needed
CHRA looks forward to our continued collaboration with the Government of Canada to create a fulsome package of policy measures in the 2024 federal budget that supports the scale-up of the supply of community housing in Canada.
We continue to call for the government to work with the National Indigenous Collaborative Housing Inc. (NICHI) to roll out the $4 billion in funding promised in Budget 2023 for housing for Indigenous peoples living in urban, rural, and northern (URN) areas. We will continue to call for the funding needed to address the disproportionate need for URN Indigenous housing, estimated at $6.3 billion annually.
We continue to call for funding to ensure a stable pipeline of community housing development projects and support for a national rental preservation fund.
We are also committed to ensuring a Team Canada approach to housing and call on the government to call a national housing summit that can provide new opportunities for communication, coordination, and collaboration between all levels of government and organizations that create and deliver housing.