Half Measures Have Consequences: Budget 2023 Fails to Adequately Address the Housing Crisis
(March 28, 2023) – Today, Deputy Prime Minister and Minister of Finance Chrystia Freeland tabled the 2023 federal budget, referencing a commitment to making housing more affordable and accessible for Canadians.
CHRA knows that Canada finds itself in a period of economic uncertainty, and that navigating the situation is no easy task. Inflation remains higher, and the government is cautious on new spending. At the same time, people from coast to coast to coast are facing an affordability crisis.
A key contributor to this crisis is the cost and accessibility of housing. Canada needs to more than double its affordable community housing stock to be in line with other OECD countries and meet current demand to stabilize the rental housing market. This means that significant government investments are needed to mitigate the housing crisis, particularly as it impacts low- and modest-income earners, and Indigenous peoples.
The National Housing Strategy’s creation as well as the recognition of the right to housing were important steps towards addressing Canada’s housing crisis. The federal government’s commitments in successive budgets towards increasing funding for National Housing Strategy programs designed to increase the country’s affordable housing stock have also been important, welcome policy commitments.
That said, with recent increases in costs associated with creating housing, non-profit and co-op housing providers are being asked to share a disproportionately higher share of the expense. This year’s budget required significant investments to overcome higher housing costs to address the housing crisis.
Instead, Budget 2023 featured half measures to address the housing crisis.
Half measures have consequences. The lack of housing investment in Budget 2023 means that Canada is ill-equipped to tackle the housing crisis.
While CHRA was pleased to see $4 billion allocated over seven years to implementing a co-developed urban, rural, and northern (URN) Indigenous Housing Strategy, the amount of funding is woefully insufficient to address current needs.
According to the National Housing Council, which was appointed by the current government, $56 billion is needed over the next ten years to address the current shortfall in URN Indigenous housing to specifically protect those in greatest need by addressing affordability issues.
Moreover, the intention for Canada Mortgage and Housing Corporation (CMHC) to implement an URN Indigenous Housing Strategy ignores past commitments, including in Minister Hussen’s Mandate Letter, to deliver this funding through a national Indigenous-led housing centre.
A dedicated URN Indigenous housing strategy remains an outstanding and overdue promise since the launch of the National Housing Strategy in 2017. Prime Minister Trudeau committed to address this gap by supporting an URN Indigenous housing strategy in the run-up to both the 2019 and 2021 federal elections. Budget 2022 provided a $300 million funding commitment, representing a mere 0.54 percent of the amount required. To this date, none of that money has provided affordable housing for a single Indigenous person.
“Indigenous people throughout urban, rural, and northern areas face grossly disproportionate high levels of homelessness and inadequate housing, and appropriate funding is needed now to address these urgent needs. As stated in the United Nations Declaration on the Rights of Indigenous Peoples, all Indigenous peoples have the right to housing and should not be subjected to discrimination. The Minister's own National Housing Council called for a significantly larger investment and the Parliamentary Budget Officer investigated and reported a significantly higher need. In addition, it is not clear if the approach noted is an Urban, Rural and Northern Indigenous-led approach but rather appears to continue failed colonial practices. Given the current Housing and Homelessness crisis, the timing of delivery is questionable and will not help people who need help today. While we are encouraged by the Budget announcement, we need urgent and constructive action. The Government of Canada must provide for the urgent needs of Indigenous people living in urban, rural, and northern areas and work towards a future where all Indigenous people have access to safe, secure, and affordable housing.” – Justin Marchand, CEO of Ontario Aboriginal Housing Services, and Director, Indigenous Communities, CHRA Board of Directors
Many affordable housing projects rely on the National Housing Strategy’s National Housing Co-Investment Fund (NHCF). Over the last year, rising interest rates and construction costs, coupled with a dramatic decrease in grant dollars available through NHCF has made it much more difficult, and in some cases impossible to create affordable housing using this National Housing Strategy program.
An injection of $4 billion per year is required to allow NHCF to remain viable in the current economic environment.
Budget 2023 did not allocate a single new dollar to the Co-Investment Fund. Instead, the Government signaled their intention to repurpose existing funds from NHCF’s repair stream to the construction stream: putting existing affordable housing at risk. This course of action ensures that Canada will fall further behind in addressing the housing crisis.
CHRA calls on the government to urgently make the half measures on housing included in Budget 2023 whole by finding an avenue to provide the amount of funding needed to meet demand. Failure to do so means the housing crisis will continue to worsen.
The affordable housing sector is ready and willing to work in partnership with the Government of Canada to ensure an end to the housing crisis and realize the right to housing across Canada.
“The Canadian Housing and Renewal Association represents hundreds of community housing leaders: experts with practical on-the-ground experience making housing happen in their communities. The community housing sector has solutions for the housing crisis and are standing ready to work with the Government of Canada to ensure everyone has a place to call home. To do so, we need the government to equip our sector with opportunities to help, including through capital funding and program co-design.” – Ray Sullivan, Executive Director, CHRA
For more information, contact:
Jacob Gorenkoff, Acting Director, Policy & Government Relations