April 30th, 2024

April began in a flurry of federal announcements around housing, with the Government landing on a final culmination of its housing plan, unambiguously titled, Solving the Housing Crisis: Canada’s Housing Plan

It’s a far cry from just last August when Prime Minister Justin Trudeau told reporters: “I’ll be blunt as well — housing isn’t a primary federal responsibility.” 

Trudeau followed up this statement at the time with an admission that the Federal Government “can and must help” with the housing crisis, and this month, a spate of announcements outlining some lofty housing goals finally gave us some insight into what that means for them.

We’ll be blunt too. The funding and actions announced across the board are not enough to meet the monumental challenge of solving the housing crisis, and not all of the measures announced in the Housing Plan or the 2024 Budget are positive. We’re concerned about the potential impacts of the Capital Gains Tax increase on new rental housing, any future restrictions on the purchase of single-detached homes by corporations, and the prospect of yet another vacancy tax. For those keeping track, that would be the third such tax applicable to B.C., and the fourth in the City of Vancouver. 

Underpinning these policy measures are the unrealistic goals that the Federal Government is setting for itself, and for the housing sector, to deliver 3.87 million homes by 2031. Doing the math, that means we would need to build over 46,000 new homes every month – national housing starts are currently less than half of that total.

There are several positive changes announced in the Housing Plan, however this may be a case of too little, too late. Regardless, UDI is still encouraged to see the shift in federal perspective, with the Government taking ownership of its role in the housing crisis.

Over the course of six federal announcements taking place over two weeks, here are the highlights of what we learned about Canada’s new Housing Plan through the 2024 Budget:

• The capital cost allowance rate will increase from 4% to 10% for new, eligible purpose-built rental projects; something UDI has been advocating for and that will help get more purpose-built rental projects off the ground.
• The annual limit for Canada Mortgage Bonds increases from $40 billion to $60 billion, expanding the availability of programs like MLI Select.
• An additional $15 billion in new loans will become available under the Apartment Construction Loan Program (ACLP), formerly RCFI, and eligibility requirements have been adjusted. These changes are intended to increase flexibility for applicants and there will be additional funding provided for specific types of developments, including mixed-use projects and projects using innovative building methods.
• The Federal Government is launching Canada Builds—a partnership-based program modeled on BC Builds.
• $6 billion will be divided across municipalities, and the provinces and territories, in a new infrastructure program that makes funding available when conditions are met.
• Transit funding will be awarded to projects meeting conditions aimed at increasing housing delivery, especially in high-growth areas. Specific requirements are similar to the requirements in place in B.C.
• A new Public Lands for Homes Plan will leverage underutilized public lands from multiple levels of government through leasing agreements. 
• $400 million will be added to the Housing Accelerator Fund to help streamline municipal development processes.
• New measures will begin to support innovative technologies in development; this includes targeted funding and a proposal to streamline regulations, including the National Building Code.
• The Plan introduces new measures to support home buyers, such as longer amortization periods when purchasing new construction, temporarily extending repayment periods, and larger withdrawals allowed by the Home Buyers’ Plan.

Many of the initiatives announced in the 2024 Budget and over the last six months directly respond to UDI’s advocacy. These included a pivot in the Federal Government’s position on the application of the GST to effectively remove the tax from new rental housing, an exemption for new rental housing from the Excessive Interest and Financing Expenses Limitation (EIFEL) rules, and reforms to rental financing initiatives.

Unfortunately, the new Plan fails to address the structural issues and costs currently holding back development. Accelerating housing to meet current and future needs is going to take a lot more action at all levels of government, federal included.

UDI is actively involved at the federal level, and we are increasing our engagement. 

Seeing the power of our members when we bring them together, we have created a new dedicated Federal Government Relations Committee to develop a cohesive message across all federal issues.

Our job isn’t only to bring members together to help advocate for your needs; we also use our position to partner with organizations across the country to increase the volume on the issues you care about most. 

We understand how we represent members at this level will be even more important as we identify the positives, negatives and opportunities for improvement within the Federal Government’s new Housing Plan.

This is the work that we continue to do to keep moving the needle in the right direction.

Sincerely,

Anne and the UDI Team