Feds housing plan is great, but will it work?

The federal government’s housing plan and budget measures have a number of positive initiatives and measures for adding housing supply. First, is the focus on housing-supportive infrastructure, especially as this compliments the Ontario government’s infrastructure funding announcement from late March. Not only is the tangible investment, itself, significant, but equally important is the growing recognition by higher orders of government that the development of new housing supply depends on housing-supportive infrastructure and that municipalities are challenged in this area.

Second, the return of the 30-year amortization limit for insured mortgages for first-time buyers purchasing new builds is great news. It will make it easier for younger generations to purchase and afford the monthly mortgage amount, particularly if interest rates, all being well, begin to soften before this takes effect on Aug. 1.

Third, the increased focus on “skilled trades” through immigration policy, encouraging more people to pursue a career in trades and breaking down the barriers to foreign-credential recognition for construction workers is very much needed. All reports indicate that, in order to build to the numbers required to meet the provincial and federal targets, we must expand the workforce to reduce the impact from labour limitations and an aging workforce in the trades. Similarly, the focus on innovation to increase productivity is a welcome addition.

While positive, the federal actions did miss opportunities in several key areas. For example, the feds did not extend the HST exemption for new purpose-built rental units under construction prior to September 2023. Given the degree of risk in new residential home construction, this means many new units could be converted to condominiums for sale rather than rental, as the current macroeconomic environment has affected the financial viability of the projects continuing as rental. Similarly extending incentives for energy efficiency to new builds, not just retrofits, could accelerate environmental goals and housing goals at once.

The degree to which these new federal initiatives will be successful depends greatly on their alignment with provincial and municipal efforts already under way. As a colleague of mine likes to say “housing is a national issue, framed provincially and delivered municipally,” and how the new federal initiatives interact with, support and augment, rather than replace and disrupt, provincial and municipal efforts will determine success.

Ultimately, speed of implementation at the municipal level — putting in place the required infrastructure, faster planning, more timely approvals — is what will help us turn the corner on the national housing crisis.