OTTAWA – Canada’s housing minister says federal funding to accelerate the pace of new construction will also aim to target the type of homes needed to meet the changing needs of Canadians.
Housing Minister Ahmed Hussen said the budget’s plan to double housing starts over the next decade will aim to encourage the construction of homes needed by older people who are downsizing, for example, as well as to newcomer families.
Last week’s budget unveiled some $10 billion in new housing spending, on top of the national housing strategy unveiled in 2017 which now carries a price tag north of $70 billion.
Much of the new spending is focused on boosting housing supply, which the government says has lagged the pace of population growth and helped push up historically high prices.
Over the past five years, Canada’s population has grown almost twice the rate of any other G7 country. The latest census figures show that of the 1.8 million more people here in 2021 than in 2016, four out of five were immigrants.
The government has unveiled ambitious immigration plans to increase the number of new arrivals in the coming years, and Hussen said those plans could be in jeopardy absent a similar jump in housing starts.
The Liberals’ latest immigration targets would see more than 1.3 million new permanent residents settle in Canada by 2024, and continue to rise rapidly to offset low birth rates and an aging population.
“We realize that housing is becoming… a threat to our ability not only to integrate people, but also to economically develop the regions of Canada,” Hussen said in an interview.
“Housing, although it can be considered a challenge, it is also an opportunity for us to grow.
Home prices have continued to rise during the pandemic, with lower interest rates and the desire for more space fueling demand.
Latest figures from the Canadian Real Estate Association showed the national average home price was a record $816,720 in February, up 20.6% from the same month a year earlier, and strongly influenced by sales in and around Vancouver and Toronto.
The March figures will be released next week.
The Liberals hope to unlock new development primarily through a five-year, $4 billion fund for cities to cut red tape and speed up new development approvals.
The government estimates that the increased supply will ease price pressures in the market over time, and the pay-for-performance fund would create around 5%, or 100,000 new units, of the additional 1.9 million that the Liberals want to build over the next decade. .
Hussen said the money would only go to cities that offer what he called a healthier mix of housing, including around transit hubs, and not necessarily all single-family homes.
An online analysis of Statistics Canada data shows that there has been a decline in the construction of single family homes in favor of smaller units such as condominiums.
Mike Moffatt, senior director of policy and innovation at the Smart Prosperity Institute, wrote that a weakness of the housing budget plan was the lack of emphasis on the need for family-friendly units. He recommended the government set a target for units with three or more bedrooms.
Building new units at the government’s desired pace will also require new workers, which Hussen said could include new immigrants.
The latest employment numbers show a steady rise in construction jobs, including four consecutive months of gains through March that Statistics Canada says have coincided with steady growth in construction since the fall of 2021.
The government is looking to ensure it can continue that growth, alongside new construction, pointing to promised spending on job training and immigration, Hussen said.
He said the spending is part of federal plans to build “all kinds of housing across the spectrum,” while keeping an eye on “the skills needed and the people needed to get us there.” We have to get it right, absolutely.
This report from The Canadian Press was first published on April 14, 2022.