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A closer look at the federal budget’s housing plan
Published on 28/04/2022
On April 7, 2022, the federal government released its 2022 Budget: A Plan to Grow Our Economy and Make Life More Affordable. A key piece of the government’s plan is to address the housing affordability crisis by providing over $10 billion in funding over five years through different programs and measures to increase the supply of housing.
This policy brief breaks down Budget 2022’s housing plan and suggests ways that the government can improve its plan to address the housing affordability challenges of those who are most in need.
Our analysis shows that:
- The government’s overall housing policy goals are unclear. The budget introduces a new goal – to double the rate of housing construction over the next decade. But the government already has existing goals under its National Housing Strategy. Unfortunately, the budget also fails to acknowledge its commitments under the National Housing Strategy Act, 2019, which recognizes the right to adequate housing as a fundamental human right.
- There are some gains, but more could be done to build, and support, affordable housing. The new and increased investments to support co-operative housing, extend the Rapid Housing Initiative, and top up the Canada Housing Benefit are welcome improvements. But these investments won’t address the full scale of the demand for more affordable housing. The overall strategy and goals for these investments are also missing from the budget.
- Renters and those without savings are left behind. Renters who aren’t in transition to home ownership aren’t given much attention in this budget. Although in the long term, they may benefit from new housing built though the Housing Accelerator Fund and changes to programs that are part of the National Housing Strategy, more affordable housing and financial support are needed now. Changing the rules of the game through regulatory measures could help too.
- Municipalities will bear the brunt of the work. Much of the $10 billion in funding for housing is being provided to municipalities. Less attention is given to the important role the provinces play in laying down the framework for what policies municipalities can actually implement and the provincial programs and services that could complement these goals.
- Implementation challenges are not part of the equation. The budget is missing a description of exactly how these homes will be built and who will build them. This could raise challenges for the implementation given that Canada’s labour market is currently facing a shortage of workers in the skilled trades and rising construction costs.
To improve its approach to housing, we suggest that the federal government:
- Reaffirm its recognition of the right to adequate housing as a fundamental human right and use this principle to guide policy-making.
- Establish a cohesive housing policy narrative.
This would involve:
- Identifying the government’s overall policy goals;
- Determining the government’s overall strategy for affordable housing, including what proportion of funding is dedicated to this goal; and
- Considering how the different levels of government can better collaborate to improve housing affordability for Canadians.
- Examine demand-side solutions.
The demand-side factors that are also driving up prices should be examined in parallel with supply-side factors, and solutions to address these issues should be part of the government’s overall strategy. This would involve urgently undertaking the review of housing as an asset class.
- Consider other factors that can affect the implementation of more housing supply.
In a climate of labour shortages and rising construction costs, it will be important for the government to consider how quickly homes can be built, at what cost, and what other measures might help to ease implementation.