Housing-focused budget misses infrastructure mark

(PHOTO: RAWF8 / ISTOCK / GETTY IMAGES PLUS / GETTY IMAGES)

The federal government took aim at Canada’s housing crisis with its 2024 budget, but not everyone is satisfied with the plan that will see the federal government post a deficit of almost $40 billion in the coming year.

Stating that one of the targets of the federal government’s 2024 budget is to make home prices and rents more affordable by quickly increasing the supply of housing, Deputy Prime Minister and Minister of Finance Chrystia Freeland presented a strategy that her party says will unlock 3.87 million new homes by 2031. Key measures include launching a new Public Lands for Homes Plan and a new Canada Rental Protection Fund, enhancing the Canadian Mortgage Charter, and creating a new Canadian Renters’ Bill of Rights. Funds have also been earmarked for infrastructure enhancements aimed at supporting the construction of more homes.

“Budget 2024 renews our focus on unlocking the door to the middle class for millions of younger Canadians,” stated Freeland. “We’ll build more housing and help make life cost less.”

Some measures, such as allowing 30-year amortization on insured mortgages for first-time buyers of new builds and the opening of public lands for more development, were well received by organizations like the Canadian Home Builders’ Association (CHBA).

“CHBA and our members are very pleased to see the federal budget measures that will help the sector respond to the government’s goal of doubling housing starts to overcome the housing supply deficit,” stated CHBA CEO Kevin Lee. “CHBA has long called for policies to assist those who dream of homeownership but have found it out of reach. Today’s budget will go a long way to help unlock the door to homeownership.”

The budget also included additional federal infrastructure and transit funding and financing to support the construction of new homes, however these inclusions do not appropriately reflect the level of spending necessary to support the housing goals, said the Canadian Construction Association in its assessment of the budget announcements.

Citing estimates from the Federation of Canadian Municipalities that indicate a need of $107,000 in public infrastructure investment for each new housing unit built, the association says an additional $128 billion is needed to build, support and connect the budget’s housing figures, which CCA says is 1.2 million homes more than what the industry was already planning to build.

“Budget 2024 sets a bold objective to help Canadians buy homes but misses the mark on delivering sufficient investment and a plan to ensure a steady flow of funds to address our nation’s infrastructure challenges,” stated CCA president Mary Van Buren. “While we acknowledge some initiatives, such as funding for creating affordable apartments, training and recruiting more workers, and upgrading water and wastewater systems, the conditions attached and lack of strategic vision are concerning.”

The association says there is an urgent need for collaboration with provinces, municipalities, and the construction industry.

“We need investments in infrastructure that are made based on the real needs of Canadians – projects that are shovel-worthy rather than just shovel-ready,” said Van Buren. “This visionary and consultative approach is what Canadians deserve.”

Also critical of the budget was the Residential Construction Council of Ontario (RESCON), which had been hoping to see a plan to reduce the burden of taxes, fees and levies on first-time home buyers.

“We commend the federal government for seriously trying. There are positive measures here to assist purpose-built rental housing supply. That much is encouraging,” stated RESCON president Richard Lyall. “But there is no relief for first-time buyers who have been pushed out of the market. They are being taxed on new housing at rates which would have crushed their parents and grandparents. Why are we doing that to them? Housing is a vital need, and we are taxing it like alcohol and cigarettes. The cost of housing used to be three times the average household income but now it’s 10 times.”

According to RESCON, 31 per cent of the cost of buying a new home is attributable to taxes, fees and levies, and with the average Canadian home costing $741,000, three-quarters of people seeking to buy a home can’t afford to buy and live in what is being built.

“To ensure the health of our economy, we must do more to help these homebuyers get a foothold in the market,” said Lyall. “The budget missed the mark on that front. We must help young Canadians who want to buy their first home. They are the future of this country.”

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