Housing Investments in Canada’s 2022 Federal Budget

April 11, 2022

The Government of Canada announced its 2022 budget on April 7, with housing being among the top areas receiving investments during this pandemic recovery period. This budget is arriving at the halfway mark of the government’s ten-year National Housing Strategy (NHS), and there remains much room for improvement.  

As investment dollars in the NHS have increased significantly since the inception of the strategy half a decade ago, the 2022 budget still does not direct adequate funds in the most effective way to address the housing needs of those living on low- to moderate-incomes. For many of these households, homeownership is well out of reach, while rental housing and alternative housing choices are becoming increasingly inadequate, inaccessible and unaffordable. Additionally, experiences of homelessness are growing in Canada.  

While the 2022 budget falls short in responding to the urgent housing needs of those most impacted by the housing affordability and homelessness crisis, we analyze here the key housing investments that have been made, followed by a detailed outline of the amounts dedicated to specific housing initiatives. 

The overall housing investment figure 

Overall, this is a modest budget, with less spending than in the years before. A major portion of the budget is directed toward housing initiatives, with a total of $1.95 billion to be spent this fiscal year, and a spending promise of an additional $7.45 billion until 2027. There are also additional funds allocated towards Indigenous housing and infrastructure projects outlined in the budget. However, despite the fact that some of the housing investments are promising, they are unlikely to significantly improve housing affordability, adequacy and accessibility across Canada.  

Housing supply and affordable housing 

Arguably the most significant new funding initiative introduced in this budget is the investment in building new cooperative housing. The government plans to construct an estimated 6,000 new cooperative housing units, which is a major commitment to non-market housing options after decades of underfunding of the cooperative sector.  

The government has also committed to adjusting its existing programs to increase the affordable housing supply. Affordability targets for the Rental Construction Financing Initiative (RCFI) will be increased to 40% of the total number of projects funded, and the government will adopt a new definition for affordability under this program. These changes respond to the important findings of a recent report from the National Housing Council, indicating that only three per cent of units created through the program to date would be affordable to lower-income Canadians. It remains unclear whether, with these measures, the government will prioritize funding for deeply affordable rental housing projects with rents considerably lower than the 80% average market rate through its commitments under the RCFI.  

In addition, the government will continue its support for the Rapid Housing Initiative (RHI), one of its most effective programs in generating deeply affordable housing. This investment is estimated to create 6,000 new housing units that will be affordable to lower-income Canadians, with a quarter directed towards projects prioritizing women. Unfortunately, the government did not make the RHI a permanent fixture, and it remains unclear whether this initiative will continue beyond 2024. 

The government also announced the new Housing Accelerator Fund, with a $4 billion commitment over five years. This new fund is aimed at supporting municipalities to increase their supply of housing by speeding up developments. The details of the program and requirements are yet to be developed. The government also plans to encourage the creation of secondary suites through its new Multi-generational Home Tax credit. This new fund has been allocated $5 million for this year, with increases in funding in year two and beyond. To stabilize housing for Canadians experiencing housing need, the budget continues to include funding for the Canada Housing Benefit (CHB). It includes an investment of $475 million in 2022-23 to cover a one-time $500 payment to households facing acute affordability challenges. To date, the CHB’s reach has been limited when considering the number of Canadians facing housing affordability challenges, and with its restrictive eligibility criteria, many Canadians will be unable to access this benefit.  

The government has also committed $150 million over two years to build affordable housing in Nunavut, Northwest Territories and Yukon. 

Finally, the government has indicated that it will conduct a review on the impact of increased commodification of housing, what it refers to as “housing as an asset class”, on renters and homeowners. Actions may be adopted following the review, which includes considerations for possible tax treatments of large corporations involved in speculation in the housing market. 

Indigenous housing

The government committed to funding Indigenous housing through an investment of $4 billion over seven years, including funds for First Nations housing on reserves, and for housing in Inuit and Métis Communities. While this is an important step, it may be insufficient to have a significant impact on enhancing housing adequacy for First Nations communities. The Assembly of First Nations estimates that the cost of upgrading First Nations’ housing stock will be much higher, at $44 billion.  

For years, Indigenous housing advocates have called on the federal government to establish an Urban, Rural and Northern Indigenous housing strategy, a recommendation that was once again formally made to the Minister of Housing and Diversity and Inclusion through the National Housing Council’s recent report. The budget commits funding to develop this long-overdue strategy, however, some Indigenous advocates are disappointed that the strategy is not explicitly led by Indigenous communities themselves.   

Repairing and maintaining existing homes 

The budget allocates considerable funds to retrofitting programs. Several initiatives are detailed, including a new initiative called the Greener Neighbourhoods Pilot Program. The program will target up to six community housing neighbourhoods to pilot the Energiesprong model, an approach to conducting retrofitting through larger-scale neighbourhood initiatives. Additionally, the expansion of the Canada Greener Homes Loan Program will include low-interest loans and grants to providers of low-income housing. It is unclear whether the government plans to approach these retrofitting initiatives in tandem with capital repair projects, which combined can more effectively increase residents’ health and safety, while reducing emissions and preserving the existing housing stock. It is also important that these projects maintain housing affordability levels and ensure that existing residents are the main beneficiaries of these investments.   

Facilitating homeownership 

The budget includes further commitments to various programs and initiatives meant to support the path to homeownership. Rent-to-own projects continue to receive funding support. The First-Time Home Buyers’ Tax Credit has been doubled and the government has indicated that it will explore ways to make the program more flexible. A new Tax-Free First Home Savings Account was introduced with a total budget of $725 million, which will come into effect next year.    


Important gaps in the 2022 budget 

Overall, the budget includes commitments for several important housing initiatives. However, it falls short in making a major contribution to solving the affordable housing crisis or supporting the growing housing needs of low- to moderate-income Canadians. Missing are commitments to urgently tackle the housing adequacy crisis in long-term care homes, plans to repair and preserve the aging affordable housing stock, efforts to build affordable rental housing options, expanding supports to women experiencing hidden homelessness, and effective strategies to tackle housing financialization. Despite the government’s priority to support women and children who are survivors of domestic violence to access stable housing, the budget does not include specific investments to reach this goal.  

Additionally, the taxation policies outlined in the budget do not go far enough to effectively regulate domestic investors or curb speculative behaviours in the housing market.    

Disappointingly, the budget does not include a commitment to advancing housing as a human right, as legislated in its National Housing Strategy Act. A rights-based approach would ensure that programs and funding allocations, even in the current recessionary context, effectively respond to the needs of those most impacted by the housing crisis.  


The funding breakdown 

Here is a detailed outline of some of the 2022 federal budget’s housing commitments: 

Cooperative Housing Development Program 

Cooperative housing is an affordable, secure and inclusive housing option for many Canadians. The new Co-operative Housing Development Program will support the construction of 6,000 new cooperative housing units to be built over five years. This is the largest investment in cooperative housing by the federal government in 30 years. It shows the government’s renewed commitment to community-based non-market housing options. The 2022 budget allocates $500 million in funding and $1 billion in loans for the new program. The program will allocate $6 million this year, which is to be increased to $34 million next year and above $70 million in the following years. A portion of funding under this new stream will be redirected funds from the National Co-Investment Fund and the Rental Construction Financing Initiative. The program will be implemented in partnership with the Cooperative Housing Federation of Canada.  

The Rapid Housing Initiative 

The 2022 budget invests $1.5 billion over two years to the Rapid Housing Initiative (RHI), with most of the funds earmarked for this fiscal year, and with at least 25 per cent dedicated to women-focused housing projects. This funding stream has proven to be an effective way to build deeply affordable, supportive housing and to urgently respond to the needs of vulnerable Canadians. While this funding is welcome and an important initiative, it is disappointing that the government has not committed to making it a permanent fixture with future funding commitments.  

The Housing Accelerator Fund 

The new Housing Accelerator Fund received considerable funding to allow the federal government to support municipalities to streamline and speed up the construction of housing projects. It received a budget of $4 billion over four years, to help create 100,000 new housing units, with the majority of funds flowing after the second year. The implementation plan of this fund is yet to be revealed. 

The National Co-Investment Fund 

No new money has been allocated to the National Co-Investment Fund (NCIF). However, the government will advance $2.9 billion from already provisioned funds, speeding up the delivery of planned investments so that all remaining funds will be spent by 2025-26. The government aims to accelerate the creation of up to 4,300 new housing units and the repair of up to 17,800 units through the NCIF. The budget did not specify whether this fund will be streamlined and how it intends to ensure that it can more effectively support affordable housing projects.  

Indigenous housing 

The budget commits to investing $4 billion over seven years in housing for Indigenous Communities. This includes $2.4 billion over five years to support First Nations housing on reserves, as well as funds to support housing in Inuit and Métis Communities. In addition, through a $300 million investment over five years, the government will co-develop and launch an Urban, Rural, and Northern Indigenous Housing strategy.  

The budget also outlines the government’s $75 million plan for the implementation of the United Nations Declaration on the Rights of Indigenous Peoples Act, with $4 million budgeted for this year. Through funding and partnership with Justice Canada and Natural Resources Canada, it plans to co-develop an action plan with Indigenous partners.  

Rental Construction Financing Initiative  

The budget outlines the government’s commitment to reform the Rental Construction Financing Initiative (RCFI) by enhancing affordability and energy efficiency requirements. It announced that eligible developers could be granted partial loan forgiveness for projects that significantly exceed these requirements. The budget announced that the RCFI’s goal will be to invest at least 40 per cent of its funds in affordable housing developments. The definition of affordability under this stream has also been revised. Affordability will now be defined as rents that are at or below 80 per cent of average market rent. However, in many cities across Canada where rents have skyrocketed, these affordability targets fail to create housing that is deeply affordable.  

Banning foreign investors 

In its attempt to curb rising prices of residential homes, the budget outlined the federal government’s plans to prohibit investors who are not Canadian citizens or permanent residents from buying residential homes for a two-year period. A list of exemptions is provided, including for international students or people residing in Canada on work permits. Given that a major portion of the speculative and investor-driven demand is from domestic players, it is doubtful that this two-year ban will have any significant impact on reducing residential housing prices.  


Reaching Home 

The Reaching Home stream is part of Canada’s main strategy to end homelessness, funding initiatives to support those experiencing or at risk of homelessness. The government announced new funding starting in 2024 of $562.2 million over two years, which will go to Infrastructure Canada to continue the funding for Reaching Home, ensuring the continuity of this program.  

Canada Housing Benefit 

The Canada Housing Benefit received an additional $475 million to provide a one-time payment of $500 to recipients. The details of this one-time payment are yet to be released. Launched in 2020, the Canada Housing Benefit represents a joint funding commitment between federal and provincial governments of $4 billion over eight years.  

Multi-generational Home Tax Credit 

The government has proposed a new tax credit to provide up to $7,500 for homeowners to build a secondary suite to be used by a senior or a person with a disability. Next year, in the 2023-24 fiscal year, households can use this credit to claim a portion of their renovation and construction costs for secondary suites.  

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