Canada has a new Housing Plan – Here’s what you need to know 

April 17, 2024

On April 12, 2024, the federal government unveiled a new housing strategy – Canada’s Housing Plan – as a significant part of its 2024 budget. The plan aims to “solve the housing crisis” by investing in programs to increase housing supply, preserve and build affordable housing, protect renters, and address homelessness.

It is encouraging to see the federal government take a leadership role in tackling the housing crisis through a comprehensive approach with significant new investments and a suite of measures. This demonstrates the government’s recognition that building more supply alone will not address the housing crisis, and that distinct policies and programs are needed to ensure housing affordability.

However, we are concerned that the government remains focused primarily on building more housing supply as the key solution to the crisis, despite evidence that more supply will not address the primary challenge facing millions of people across Canada today: affordability. To effectively address the housing affordability crisis, the government must prioritize policies and programs that specifically address housing affordability, alongside robust protections for renters.

The good news – measures that address housing affordability 

Canada’s Housing Plan contains a number of promising measures that can help address housing affordability, representing a renewed federal approach to housing policy following decades of inaction and half measures. Beginning in the 1980s, Canadian governments progressively retreated from these important interventions in housing, and since then, have relied almost exclusively on the private market to meet Canadians’ diverse housing needs. In 2017, the federal government introduced a National Housing Strategy, but it was unambitious, underfunded, and proved to be ineffective. The housing affordability crisis has continued to worsen, to the point that more than half of Canadian renters are worried about being able to pay their rent. This new plan sends an encouraging signal that the government may finally be starting to take the crisis seriously. 

It is also encouraging that the plan includes some recognition of the need for distinct programs and policies that directly target affordability, which we recommended in our pre-budget submission. These measures include, over the next five years: 

  • An additional $1 billion to the Rapid Housing Stream (RHS) of the Affordable Housing Fund (AHF). The RHS (formerly a separate program called the Rapid Housing Initiative) has been more successful than other NHS funding streams at creating affordable and non-profit housing. This brings the total funding to date under both programs to $18.8 billion. 
  • A new $1.5 billion Canada Rental Protection Fund for non-profits and other partners to identify and purchase affordable private-market buildings at risk of rent increases and renter displacement, which will help maintain tenancies and keep rents affordable over the long term. Housing advocates have long called for this type of acquisition program
  • Launching a $1.5 billion funding program to support co-operative housing developments, which was previously announced in the 2022 federal budget. Co-operatives are one of the few models that can provide long-term affordable rents outside the private market.  
  • An additional $1.3 billion to the Reaching Home homelessness program, including $250 million over two years to address encampments by supporting rights-based community action plans that use a Housing First approach. This brings the total funding for the program to date to $5.3 billion.  
  • The continuation of the existing $960 million Interim Housing Assistance Program to prevent homelessness amongst asylum claimants.  
  • $4.3 billion over seven years to an Urban, Rural, and Northern Indigenous housing strategy. This is existing funding that the government had previously committed in its 2023 budget, to start in 2024-2025. 

These are important programs that housing advocates have long called for to address the escalating housing affordability crisis. While we welcome these announcements, they pale in comparison to the depth of need across the country. The total investment of $27.1 billion (including the new funding of $3.8 billion) directed toward affordability measures and addressing homelessness is not responsive to the scale of the housing affordability crisis. To take just two examples: Canada is currently losing 46,000 affordable units annually to rent increases, demolitions, and conversions, but the Canada Rental Protection Fund will prevent the loss of only 2,500 – just over five per cent – of those units. Similarly, to address the depth of housing need facing Indigenous Peoples living in urban, rural and northern areas, estimates range from $4.3 billion to $5.6 billion per year over ten years, but the government has committed only $600 million per year over seven years.

The promising news – measures that could meaningfully protect renters’ rights

Canadian Renters’ Bill of Rights 

One of the most promising announcements in Canada’s Housing Plan is the development of a Canadian Renters’ Bill of Rights. Renters across the country are facing soaring rent costs, few affordable options, and limited housing security. Without adequate protections against excessive rents, rent gouging, and eviction, renters are increasingly facing housing precarity and homelessness. Current renter protections are a patchwork and vary significantly between provinces and territories. At a minimum, the Renters’ Bill of Rights could help ensure all renters have the right to reasonable rents and protection from eviction, while helping to mitigate the ongoing loss of existing affordable homes when renters are evicted or displaced.   

To develop an effective Renters’ Bill of Rights, the federal government must engage with renter communities, organizations that represent them, and legal experts on renter protections to ensure that it reflects renters’ real-life experiences. The right to a reasonable rent is especially important given the low level of investment in direct housing affordability measures in Canada’s Housing Plan. In the absence of sufficient investments in non-market housing, most renters in Canada will continue living in private market buildings. With only five per cent of Canada’s housing stock owned by the public and non-profit sectors, housing prices are dictated by market forces. Effective rent regulation is essential to uphold renters’ rights. 

The Renters’ Bill of Rights could provide a crucial standard for every province and territory to strive towards. While this will require cooperation between different levels of government, it is not unprecedented. For example, over the course of 20 years after it was introduced by the federal government, the National Building Code was adopted by every province and territory as a standard for building design and construction. We are also encouraged that the federal government is looking to hold other levels of government accountable by making some housing funding conditional on provinces and territories adopting elements of the Renters’ Bill of Rights. When the federal government funds housing development, it is reasonable to expect that the housing it funds will be secure and affordable for the people who live in it.

Other supports for renters 

We are glad to see the federal government recognize the need for legal aid for renters, alongside support for organizations that raise awareness of renters’ rights through its new Tenant Protection Fund. However, $15 million over five years is not nearly enough to respond to the level of need facing renters, especially considering the limited resources currently available for renters facing displacement and discrimination across the country.  

We are also pleased to see the government introduce new rules to allow renters to decide if they would like their rental payment history to be taken into account for their credit score. This opt-in approach will help ensure that renters who are struggling to pay their rent on time due to the mounting housing affordability crisis are not negatively impacted.

The indifferent news – measures that will not address affordability

While it is encouraging that the government has recognized affordability and renters’ rights in its housing plan, those are disproportionately small parts of the overall strategy. In contrast, measures to incentivize the private market to build more housing comprise the vast majority of the plan. These include a little over $66.3 billion in grants, loans, and other supports for developers, and changes to zoning and permitting rules to make building quicker and cheaper. It also includes a freeze on the fees that municipalities can charge developers, a previously announced GST rebate for rental construction, and other tax breaks, all of which represent additional costs of lost tax revenue. These amounts together represent a much larger allocation than the $27.1 billion allocated to affordable housing and addressing homelessness.

In the absence of robust affordability requirements, new private market housing will not be affordable, especially for low- and moderate-income residents. Moreover, increasing supply does not meaningfully lower rents in existing homes. The supply approach is contingent on higher income residents moving into new higher-cost homes, freeing up their existing lower-cost homes to be passed on to low- and moderate-income residents. However, in the absence of effective rent regulation, there is nothing keeping those existing homes affordable. Even the  strongest proponents of the supply approach acknowledge that rent decreases spurred by new supply are negligible. Empirical studies have found that building supply “was so slow and had so little effect on providing housing to lower income tenants that it could not be pursued as a serious policy strategy” and “is not a meaningful method for producing affordable rental housing.”

In short, the government’s plan to address housing supply shortages in the private market will not meaningfully impact the affordability crisis. To address affordability, new construction must prioritize publicly-owned, non-profit, and co-operative homes. At the same time, new housing built by the private market must be subject to strict affordability requirements to justify public investment.

Unfortunately, the government’s housing plan does not signal that it intends for its significant investments in housing supply to provide affordability. On the contrary, the government noted that existing affordability requirements in the Apartment Construction Loan Program – which are already minimal, inadequate, and ineffective – will be made more “flexible.” In short, the bulk of the government’s plan is to incentivize developers to build more housing that will be unaffordable to most people in Canada.

What’s missing 

Leveraging public lands for affordable housing

We are glad to see the federal government launch a new Public Lands for Homes Plan, which aims to leverage publicly-owned lands for housing development, including by leasing lands to retain public ownership over the long term. However, it is critical that public lands and other assets be prioritized for non-market housing to maximize the use of public lands for housing that is truly affordable to communities in need. We are concerned that this new plan fails to do so, reinforcing the government’s overall focus on housing supply over affordability. However, it is encouraging that the government is proposing to prioritize non-market and student housing as part of its plan to convert underused federal offices.

Expanding the Canada Housing Benefit 

We are disappointed that Canada’s Housing Plan does not include additional investments in the Canada Housing Benefit (CHB), which provides low-income renters in the private market with funding to help them keep their homes. While rent supplements like the CHB can be a double-edged sword that allow landlords to increase rents in the absence of rent controls, they are also important short-term solutions that can help keep low-income renters housed in the midst of a housing affordability crisis. Paired with a strong Renters’ Bill of Rights, an expansion of the CHB could help protect affordability and security for many low-income renters across the country.

Addressing the financialization of housing

Canada’s Housing Plan includes minimal mention of the role that financialization has played in the housing crisis. In so far as the government is seeking to address the financialization of housing, it intends to consult on opportunities to limit the acquisition of single-family homes by large, corporate investors, with few details or clarity on what this will entail. However, financialization is a much more pervasive issue that threatens affordability and security across housing types. Beyond restricting the corporate acquisition of single-family homes, it is incumbent on the government to also address the growing speculative forces and increased role of financialized actors across the housing sector. In addition, the government should prioritize working closely with the National Housing Council, which recently wrapped up Canada’s first Review Panel to examine the impacts of the financialization of purpose-built rentals.

Advancing the right to housing 

Following the explicit focus of the National Housing Strategy (2017) and National Housing Strategy Act (2019) on advancing the right to adequate housing, we are disappointed that Canada’s Housing Plan makes minimal reference to the right to housing. Minimal support is included for the Office of the Federal Housing Advocate in the 2024 budget, while no additional support is provided for the National Housing Council or other organizations that support renters in claiming their right to housing. Considering the disproportionate impacts of the housing affordability crisis on low-income, racialized, and other marginalized communities, it is incumbent on the government to prioritize and maximize investments that will address the housing needs of those most impacted by the crisis.

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