Canada Launches $6bn Housing Infrastructure Fund

The Canadian federal government has announced the creation of a new $6 billion “Canada Housing Infrastructure Fund” aimed at accelerating construction and upgrading essential components to support the development of more homes. Prime Minister Justin Trudeau revealed the funding alongside Housing Minister Sean Fraser, highlighting the need for urgent action to address the housing shortage in the country.

The fund, according to the Prime Minister’s Office (PMO), will allocate $1 billion to address critical infrastructure needs such as enhancing wastewater, stormwater, and solid waste systems. The remaining $5 billion will be reserved for agreements with provinces and territories, contingent upon their commitment to actions that increase Canada’s housing supply.

To access the funding, provinces and territories must adhere to several requirements, including:

1. Allowing more “missing middle” homes like duplexes, triplexes, and townhouses.

2. Implementing a three-year freeze on increasing development charges for municipalities with populations exceeding 300,000.

3. Adopting forthcoming changes to the National Building Code to support accessible, affordable, and environmentally friendly housing options.

4. Permitting pre-qualified or “as-of-right” construction based on existing building and zoning approvals.

Provinces have until Jan. 1, 2025, and territories until April 1, 2025, to secure agreements with the federal government. Failure to meet the deadlines will result in the reallocation of funding to the municipal stream.

In addition to the new fund, Trudeau pledged to bolster the existing $4 billion “Housing Accelerator Fund” with an additional $400 million. This initiative aims to reduce red tape and expedite new construction projects, with nearly 180 agreements already signed to fast-track over 750,000 new homes. The additional funding is projected to accelerate the construction of 12,000 new homes over the next three years.

The announcement comes amid ongoing efforts by the Liberal government to address housing affordability, a key focus in their spending plans over the past year. Trudeau emphasised the importance of creating more housing options for Canadians, particularly younger generations facing high housing costs.

Furthermore, municipalities seeking long-term public transit funding must take action to unlock the housing supply. This includes eliminating mandatory minimum parking requirements near high-frequency transit lines, allowing high-density housing near post-secondary schools, and conducting housing needs assessments for communities with populations over 30,000.

While the government’s housing initiatives have garnered both support and criticism, Trudeau defended the measures, asserting that they strike a balance between fiscal responsibility and investing in Canadians. The full details of the funding allocations and their impact on housing affordability are expected to be outlined in the upcoming federal budget.

Pan Finance is a print journal and news website providing worldwide intelligence on finance, economics and global commerce. Known for our in-depth analysis and opinion pieces from esteemed academics and celebrated professionals; our readership consists of senior decision makers from across the globe.

Contact us