Liberals say their plan to ‘solve the housing crisis’ will build 3.9M homes by 2031

OTTAWA — The federal Liberals have unveiled their plan to solve the housing crisis, building on recent announcements with new tax incentives, more than a billion dollars for homelessness and a country-wide effort to build more housing on public lands.

“Today we are releasing the most comprehensive and ambitious housing plan ever seen in Canada,” Prime Minister Justin Trudeau announced in Vaughan, Ont. on Friday.

“It’s a plan to build housing, including for renters, on a scale not seen in generations. We’re talking about almost 3.9 million homes by 2031.”

The parliamentary budget officer released a report Thursday that estimates Canada would need to build 3.1 million homes by 2030 to close the housing gap.

The Liberals’ 28-page plan, which comes days ahead of the federal budget, is the minority government’s latest effort to set the agenda on affordability as it loses significant ground to the Conservatives over cost-of-living issues.

Ottawa is also sending a message to provinces, territories and municipalities that they too will need to step up, dubbing the plan a “call to action.”

“There’s no way that one level of government is going to solve the national housing crisis on their own,” said Housing Minister Sean Fraser in an interview.

“But if we work together … and create incentives to encourage each other to actually adopt policies that will help us get us to where we need to be, I know that we can accomplish this extraordinarily important task.”

The Liberals’ plan promises to tackle the spectrum of housing affordability challenges Canadians face, from the the out-of-reach dream of homeownership to skyrocketing rental costs to homelessness.

While much of the plan was announced during the government’s recent pre-budget tour or even prior to that, several new measures are laid out in the document, including expanded tax incentives for homebuilding.

The federal government intends to increase the capital cost allowance rate for apartments from four to 10 per cent, which will increase how much builders can write off from their taxes.

It’s also extending the GST exemption on rentals to student residences built by public universities, colleges and school authorities.

The plan also earmarks more money to tackle homelessness as communities across the country struggle with encampments and limited shelter spaces.

The Liberal government is topping up the Reaching Homes program, a federal homelessness initiative, with an additional $1 billion over four years.

Another $250 million is allocated to help communities end encampments and transition people into housing. The federal government is asking provinces and territories to match that amount.

The Liberals are also pledging a “historic shift” in how the government uses public lands to build housing, which will involve making more land available for home construction and leasing land as opposed to selling it off.

And they want to restrict large corporate investors from purchasing existing single-family homes.

Other planks of the plan include training more skilled trades workers, easing foreign credential recognition and boosting productivity in the construction industry, measures that would presumably speed up the process of homebuilding.

The federal government also promises to help families lower their energy bills, including through by launching a new program that will support energy-efficient retrofits for low to median-income households.

The Liberal housing plan was applauded by the Canadian Home Builders’ Association, which said the plan sets the stage for a “comprehensive approach” to addressing housing affordability.

Its implementation will, in part, be contingent on co-operation from provinces and territories, some of which have already pushed back on the federal government over what they argue is jurisdictional overreach.

Quebec, Saskatchewan, Ontario and New Brunswick were unhappy with Ottawa’s decision to make access to new infrastructure money contingent on a set of conditions, including legalizing fourplexes.

But Fraser pushed back on those critiques, arguing that Canadians just want their problems solved.

“When people come knock on the door of my constituency office and they have a problem, the last thing that they want to hear is that it’s not my responsibility to help them,” Fraser said.

“So from my point of view, it was important that we do what we can to embrace the challenge and demonstrate to Canadians that even where there may be technical jurisdictional obstacles, that wasn’t going to give us a reason to do anything less than the very best that we can.”

As the Liberals aggressively sell their housing plan and the federal budget set to be released on Tuesday, whether it lands with Canadians will depend on whether they still have faith that the incumbent government can solve their problems.

The federal Conservatives, who have have maintained a double-digit lead in public opinion polls since the summer, appear to have successfully convinced a large contingent of voters that the Liberals only make cost-of-living issues worse.

Tories have largely dismissed the government’s recent housing announcements and argued that pouring more money into “government bureaucracy” won’t solve the housing crisis.

“Justin Trudeau’s vanity announcements and billion-dollar photo ops don’t change the fact that his strategy has doubled housing costs over the last eight years,” said Conservative housing critic Scott Aitchison in a statement.

New Democrats reacted to the housing plan Friday with a similar attack. In a statement, housing critic Alexandre Boulerice said “Canadians can’t trust the Liberals to fix the problem they created.”

Fraser acknowledged that Conservatives have succeeded at capturing Canadians’ attention on housing, but he said their solutions fall short of what’s needed.

“I think it’s dangerous when politicians seek to prey on the very real anxieties of people without doing anything to help them. It communicates to me that it’s motivated more by their appetite to seize political power than it is to actually help people who are struggling,” Fraser said.

Conservative Leader Pierre Poilievre has argued that government should get out of the way and let developers build more homes.

His proposed housing plan centres heavily on requiring cities to increase home building by 15 per cent each year to receive their usual infrastructure spending, or see their funding withheld. Those who build more than the target would be eligible for “bonuses.”

This report by The Canadian Press was first published April 12, 2024.

Nojoud Al Mallees, The Canadian Press