Released April 7th, Federal Budget 2022 puts a major focus on housing development and the affordability issues that continue to plague Canadians. Plans to bolster housing development include launching a new Housing Accelerator Fund, expanding the Rapid Housing Initiative (RHI), and amping up energy-efficient rental construction via the Rental Construction Financing Initiative (RCFI).
“Budget 2022 is about growing our economy, creating good jobs, and building a Canada where nobody gets left behind,” said Chrystia Freeland, Deputy Prime Minister and Minister of Finance. “Our plan is responsible and considered, and it is going to mean more homes and good-paying jobs for Canadians; cleaner air and cleaner water for our children; and a stronger and more resilient economy for years to come.”
Proposed steps to address housing supply and affordablitly in Budget 2022 include:
Launching a new Housing Accelerator Fund
To incentivize cities and towns across Canada to modernize housing and create up to 100,000 new housing units over the next five years, $4 billion will go towards a new Housing Accelerator Fund. The fund delivered through CMHC will be flexible with a single application system, and will offer key supports and incentives to ensure a balanced supply of housing is built to meet the needs of all income levels. The new program will also take into account smaller and rural communities that are growing quickly, like those in Atlantic Canada and Northern Ontario.
Rapidly building new affordable housing
With affordable housing still urgently needed in most major markets, the government is proposing to extend the Rapid Housing Initiative for a third round with $1.5 billion over the next two years in allocated funds. The initiative is expected to create at least 6,000 new affordable housing units, with 25 per cent of the funds going toward women-focused housing projects.
Speeding up housing construction and repairs
Over the last five years, the National Housing Co-Investment Fund has supported the construction and repair of 108,000 housing units for 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 exceeding supply. Budget 2022 proposes to advance $2.9 billion in funding under the National Housing Co-Investment Fund to be used by 2025-26. The government promises that improvements will make the fund “more flexible and easier to access” 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 proposes to reform the initiative by strengthening its affordability and energy efficiency requirements. Developers who significantly exceed the requirements and build highly affordable and energy efficient units will be eligible to have a portion of their repayable loans converted to nonrepayable loans. Additionally, the new 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 are intended to ensure that the rental units built through this program are more affordable, more efficient, and more aligned with Canada’s climate goals.
Providing more direct support for those in housing need
The Canada Housing Benefit was co-developed in 2020 with provinces and territories providing joint funding of $4 billion over eight years. This benefit gives direct financial support to Canadians who are experiencing urgent housing need. Budget 2022 proposes to provide $475 million toward a one-time $500 payment to individuals facing housing affordability challenges. The specifics and delivery method will be announced at a later date.
Supporting co-ooperative housing development
For generations, co-ops have offered quality, affordable housing using a community-oriented model of shared living spaces. While co-ops are home to approximately a quarter of a million Canadians, the government contends that not enough of these dwellings have been built in recent years. Budget 2022 proposes to reallocate $500 million of funding from the National Housing Co-Investment Fund to launch a new Co-operative Housing Development Program aimed at expanding co-op housing in Canada. It also proposes an additional $1 billion in loans to be reallocated from the Rental Construction Financing Initiative to support co-op housing projects and the construction of an estimated 6,000 new units.
Launching a multigenerational home renovation tax credit
To support Canadian families living in multigenerational homes, Budget 2022 proposes to introduce a Multigenerational Home Renovation Tax Credit, which would provide up to $7,500 in support for the construction of 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 associated with these projects.
For a complete summary of Budget 2022’s housing-related policies and initiatives, visit: Making Housing More Affordable – Canada.ca
