Building Affordable Homes – Budget 2022

Every order of government has a role to play in building more homes and making housing more affordable for Canadians. Provinces and territories oversee the frameworks guiding land use, planning, and their targets for increasing the number of new homes. Municipalities implement policies in a manner best suited to their communities.

To help double our rate of construction over the next ten years, make our housing and building stock more environmentally friendly, and address homelessness, the federal government is proposing a range of measures that will:  

• Incentivize cities to build more homes and create denser, more sustainable neighbourhoods to increase housing supply;
• Support those in need of affordable housing by building new affordable units faster;
• Create a new generation of co-op housing through the largest investment in new co-op housing in more than 30 years;
• Accelerate retrofits and build more net-zero homes in communities across Canada so that people can save on energy bills; and,
• Support those experiencing or at risk of homelessness by continuing to provide doubled annual funding for Reaching Home; building new affordable units for the most vulnerable; continuing work to end chronic homelessness; and introducing a new program to combat veteran homelessness.

Launching a New Housing Accelerator Fund

To make housing more affordable, more housing needs to be built. Building more housing will require investments, but it will also require changes to the systems that are preventing more housing from being built.

The federal government’s goal is to incentivize the cities and towns that are stepping up to get more housing built, while also ensuring that municipalities are able to get the support they need to modernize and build new homes.

• Budget 2022 proposes to provide $4 billion over five years, starting in 2022-23, to the Canada Mortgage and Housing Corporation to launch a new Housing Accelerator Fund. The fund will be designed to be flexible to the needs and realities of cities and communities, and could include support such as an annual per-door incentive for municipalities, or up- front funding for investments in municipal housing planning and delivery processes that will speed up housing development. Its focus will be on increasing supply, but government supports will be targeted to ensure a balanced supply that includes a needed increase to the supply of affordable housing.

This new fund will target the creation of 100,000 net new housing units over the next five years.

The Housing Accelerator Fund will have a flexible single application system, and will still allow municipalities to access other related programs. The federal government will ensure that the program also takes into account smaller and rural communities that are growing quickly, like those in Atlantic Canada and northern Ontario.

Using Infrastructure Funding to Encourage More Home Construction

Every year, the federal government provides significant amounts of funding to provinces, territories, and municipalities to help them deliver important public infrastructure projects. At the same time, there is not enough housing being built to keep up with the needs of Canadians.

A coordinated approach, involving all orders of government, is required to ensure public spending is working to build more of the homes Canadians need.

• To this end, Budget 2022 signals the government’s intention to create flexibility within federal infrastructure programs to tie access to infrastructure funding to actions by provinces, territories, and municipalities to increase housing supply where it makes sense to do so. This flexibility would be included within the Canada Community-Building Fund, when its current administrative agreements with provinces and territories are renewed; and other future infrastructure programs.

Together with the new Housing Accelerator Fund, this represents nearly $43 billion in new and existing federal funding over the next ten years that will be leveraged to encourage the construction of more homes for Canadians across the country.

Leveraging Transit Funding to Build More Homes

The pandemic has had an extraordinary impact on public transit ridership and the revenues that municipalities count on. On March 25, 2022, the government tabled a bill to authorize up to $750 million in 2021-22 to support municipalities as they address their public transit shortfalls.

To increase the impact of this investment, the proposed funding will be conditional on provincial and territorial governments committing to match the federal contribution and to accelerate their work with their municipalities to build more homes for Canadians.

Rapidly Building New Affordable Housing

Additional affordable housing units are urgently needed, particularly for those experiencing or at risk of homelessness. To ensure that more affordable housing can be built quickly, the government is proposing to extend the Rapid Housing Initiative for a third round.

• Budget 2022 proposes to provide $1.5 billion over two years, starting in 2022-23, to the Canada Mortgage and Housing Corporation to extend the Rapid Housing Initiative. This new funding is expected to create at least 6,000 new affordable housing units, with at least 25 per cent of funding going towards women-focused housing projects.

Speeding Up Housing Construction and Repairs for Vulnerable Canadians

Over the last five years, the National Housing Co-Investment Fund has supported the construction and repair of 108,000 housing units for the most vulnerable Canadians. Projects like shelters, homes for seniors and persons with disabilities, and supportive housing account for 75 per cent of units committed to so far, with demand for those units exceeding supply. To protect housing affordability tomorrow, the government is accelerating its investments today.

• Budget 2022 proposes to advance $2.9 billion in funding, on a cash basis, under the National Housing Co-Investment Fund, so that all remaining funds will be spent by 2025-26. This will accelerate the creation of up to 4,300 new units and the repair of up to 17,800 units for the Canadians who need them most.

Taking lessons from the Rapid Housing Initiative, the National Housing Co-Investment Fund will be made both more flexible and easier to access, including with more generous contributions and faster approvals.

Building More Affordable and Energy Efficient Rental Units

The Rental Construction Financing Initiative (RCFI) incentivizes the construction of new rental housing by offering low-interest loans and mortgage insurance to those building more rental housing in areas where it is needed most.

• Budget 2022 announces the government’s intent to reform the Rental Construction Financing Initiative by strengthening its affordability and energy efficiency requirements. Developers who significantly exceed these requirements and build highly affordable and energy efficient units will be eligible to have a portion of their repayable loans converted to non- repayable loans.

Budget 2022 also announces that the RCFI will target a goal of having at least 40 per cent of the units it supports provide rent equal to or lower than 80 per cent of the average market rent in their local community. These new requirements and incentives under a more ambitious Rental Construction Financing Initiative will ensure that rental units built through this program are more affordable, that people can reduce pollution and save on energy bills, and that Canada continues to make progress towards meeting our climate projections.

Direct Support for those in Housing Need

The Canada Housing Benefit was co-developed with provinces and territories and launched in 2020 with joint funding of $4 billion over eight years. It provides direct financial support to Canadians who are experiencing housing need. However, as part of its broader efforts to make life more affordable for Canadians, the government recognizes that many are in need of additional assistance. To support those struggling with housing costs:

• Budget 2022 proposes to provide $475 million in 2022-23 to provide a one-time $500 payment to those facing housing affordability challenges. The specifics and delivery method will be announced at a later date.

A New Generation of Co-Operative Housing Development

For generations, co-ops have offered quality, affordable housing to Canadians, while empowering their members through inclusion, personal development, and security of tenure through their community-oriented model of housing. While co-ops are home to approximately a quarter of a million Canadians, not enough have been built in recent years.

• Budget 2022 proposes to reallocate $500 million of funding on a cash basis from the National Housing Co-Investment Fund to launch a new Co-operative Housing Development Program aimed at expanding co-op housing in Canada. This new program will be co-designed with the Co-operative Housing Federation of Canada and the co-operative housing sector.
• Budget 2022 also proposes an additional $1 billion in loans to be reallocated from the Rental Construction Financing Initiative to support co- op housing projects.

With the largest investment in building new co-op housing for more than 30 years, an estimated 6,000 units will be constructed.

Affordable Housing in the North

Canada’s Northern communities face unique housing needs due to higher construction costs, shorter construction seasons, infrastructure gaps, and the effects of climate change that are increasing as the North has been warming at roughly three times the global warming rate. The federal government is continuing to work with partners across Yukon, the Northwest Territories, and Nunavut to address the issues of housing availability and quality that disproportionately affect Northerners.

• Budget 2022 proposes to provide $150 million over two years, starting in 2022-23, to support affordable housing and related infrastructure in the North. Of this amount, $60 million would be provided to the Government of Nunavut; $60 million to the Government of the Northwest Territories; and $30 million to the Government of Yukon.

Multigenerational Home Renovation Tax Credit

Many Canadians have traditions of living together in multigenerational homes, with grandparents, parents, and children under one roof. For some families across the country, having different generations living together—an elderly grandparent with their daughter’s family or a son with a disability with their parents—can be an important way for them to care for each other.

• To support these families, Budget 2022 proposes to introduce a Multigenerational Home Renovation Tax Credit, which would provide up to $7,500 in support for constructing a secondary suite for a senior or an adult with a disability.

Starting in 2023, this refundable credit would allow families to claim 15 per cent of up to $50,000 in eligible renovation and construction costs incurred in order to construct a secondary suite.

Greener Buildings and Homes

Buildings and homes are the third-largest source of greenhouse gas emissions in Canada, accounting for approximately 12 per cent of Canada’s emissions. Since 2016, the federal government has dedicated more than $10 billion towards decarbonizing homes and buildings, and incenting energy efficient retrofits. To achieve Canada’s goal of net-zero emissions by 2050, the scale and pace of retrofitting buildings in Canada must increase. To this end, the federal government will develop a national net-zero by 2050 buildings strategy, working with provinces, territories, and other partners to accelerate both retrofits of existing buildings, and the construction of buildings to the highest zero carbon standards.

• Budget 2022 proposes to provide $150 million over five years, starting 2022-23, to Natural Resources Canada to develop the Canada Green Buildings Strategy. The strategy will include initiatives to further drive building code reform; to accelerate the adoption and implementation of performance-based national building codes; to promote the use of lower carbon construction materials; and to increase the climate resilience of existing buildings.
• Budget 2022 proposes to provide $200 million over five years, starting in 2022-23, to Natural Resources Canada to create the Deep Retrofit Accelerator Initiative, which will provide support for retrofit audits and project management for large projects to accelerate the pace of deep retrofits in Canada, including a focus on low-income affordable housing.

Establishing a Greener Neighbourhood Pilot Program

More than two thirds of buildings that will be standing in Canada in 2050 have already been built today, and many of them need to be retrofitted to make them more sustainable.

The Energiesprong model, adopted by Netherlands, the United Kingdom, France, Germany, and the United States, accelerates the pace and scale of retrofits by aggregating homes and buildings in an entire neighbourhood and retrofitting them all at the same time. This support for community-level home retrofits aligns with the Net-Zero Advisory Body’s recommendation to seek out opportunities to decarbonize multiple buildings at once.

• Budget 2022 proposes to provide $33.2 million over five years, starting 2022-23, to Natural Resources Canada, including $6 million from the Green Infrastructure – Energy Efficient Buildings Program to implement a Greener Neighbourhoods Pilot Program in up to six community housing neighbourhoods to pilot “Energiesprong” model in Canada.

Greener Construction in Housing and Buildings

Guidance, standards, and research are all needed to support innovations like the development of lower-carbon building materials and more energy efficient processes for retrofitting homes.

• Budget 2022 proposes to provide $183.2 million over seven years, starting in 2022-23, with $8.5 million in remaining amortization, and $7.1 million ongoing to the National Research Council to conduct research and development on innovative construction materials and to revitalize national housing and building standards to encourage low-carbon construction solutions.

Greener Affordable Housing

Budget 2021 announced $4.4 billion on a cash basis to create the Canada Greener Homes Loan program, of which a portion will be used to make existing affordable housing more energy efficient, which will also help to lower energy bills.

• Budget 2022 proposes to provide an additional $458.5 million over the program duration, starting in 2022-23, to the Canada Mortgage and Housing Corporation to provide low-interest loans and grants to low- income housing providers as part of the low-income stream of the Canada Greener Homes Loan program.

Long-Term Supports to End Homelessness

Every Canadian should have a safe place to call home, but for too many, including Indigenous peoples, persons with disabilities, and veterans, that still isn’t a reality. Thousands of Canadians do not have a warm place to sleep at the end of the day, and during the pandemic, have had to choose between the cold of the streets and the crowding of shelters.

Through Reaching Home: Canada’s Homelessness Strategy, the federal government has committed more than $3 billion to address homelessness, including doubling annual funding for four years in response to the pandemic. 

The government remains committed to ending chronic homelessness, and is proposing significant additional investments that will help make continued progress towards that goal.

• Budget 2022 proposes to provide $562.2 million over two years, beginning in 2024-25, for Infrastructure Canada to continue providing doubled annual funding for Reaching Home. This funding will provide longer term certainty for the organizations doing vitally important work across the country and ensure that our communities have the support they need to continue to prevent and address homelessness.

Improving Community Responses to Homelessness

Reaching Home provides vital support to community efforts to support those experiencing homelessness. However, no community or organization can prevent or end homelessness on its own. Making sure that everyone has a safe place to call home is a goal that different organizations and orders of governments share, and there is a need to ensure communities have access to all of the knowledge and tools they need to effect change.

• Budget 2022 proposes to provide $18.1 million over three years, starting in 2022-23, to Infrastructure Canada to conduct research about what further measures could contribute to eliminating chronic homelessness.

A New Veteran Homelessness Program

The government is also taking action to address the fact that thousands of veterans experience homelessness every year. They have served Canada with our flag on their shoulder, and they deserve a safe place to call home.

Budget 2021 announced $45 million for a pilot program aimed at reducing veteran homelessness. To ensure that long-term support is in place, the government now intends to move directly to the launch of a targeted program.

• Budget 2022 proposes to provide $62.2 million over three years, beginning in 2024-25, for Infrastructure Canada, with support from Veterans Affairs Canada, to launch a new Veteran Homelessness Program that will provide services and rent supplements to veterans experiencing homelessness in partnership with community organizations.

Source: https://budget.gc.ca/2022/report-rapport/chap1-en.html#2022-1