$15 billion in new federal financing for apartment construction loans

Federal government announces $15 billion in new funding for apartment construction loans

Construction of the MC2 residential towers near SkyTrain Marine Drive Station in South Vancouver. The complex reached completion in 2016. (romakoma/Shutterstock)

Ahead of the 2024/25 budget announcement, some more new interim measures have been identified by the federal government to help catalyze more housing across Canada amidst the current challenging marketing conditions for construction.

During today’s fall economic statement, deputy prime minister and finance minister Chrystia Freeland announced the Apartment Construction Loan Program, previously called the Rental Construction Financing Initiative, will be topped up with an added $15 billion in new low-cost repayable loan funding for a total pool of over $40 billion.

This latest infusion will support over 30,000 additional new homes to help catalyze a grand total of over 100,000 homes by 2032.

With growing real construction costs due to inflationary prices on equipment, labour, and materials, coupled with the high borrowing costs from interest rates, building development projects are increasingly at risk of delays or even cancellation.

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Other measures include adding $1 billion to the Affordable Housing Fund, previously known as the National Housing Co-Investment Fund, to help build more than 7,000 new homes by 2028 in partnership with non-profit, co-op, and public housing operators.

As labour shortages are one of the major restraints for the pace and cost of construction, the federal government will be working towards creating policies that make it easier for construction workers to move between provinces. Similar policies will also be in place for healthcare and childcare workers.

Freeland also confirmed that the federal government will work on implementing its own measures to crack down on non-compliant short-term rentals — vacation home listings on platforms such as Airbnb and Vrbo — to effectively support municipal enforcement of short-term rental restrictions. There will be a targeted approach eyeing income tax deductions for non-compliant short-term rental properties, along with new funding for municipal governments in need of further resources for enforcement.

Additionally, there will be a new Canadian Mortgage Charter to ensure Canadians who are struggling financially from high borrowing costs due to elevated interest rates can access “tailored mortgage relief.”

“What Canadians deserve today is for us to address the very real pain that so many are feeling—with a hopeful and achievable vision for our country’s future,” she said.

“Our country needs more homes—and we need more of them, fast. We must build homes in our biggest cities and our smallest towns. We must build detached family homes and secondary suites. We must build co-op housing and rental apartments. And it will take all of us—the federal government and the provinces; cities and towns; the private sector and non-profits right across this great country—working together in common cause.”

The supplemental strategies follow recent criticism against the federal government for its role in Canada’s escalating housing affordability and living cost issues, with consecutive opinion polls by different surveyors showing Prime Minister Justin Trudeau’s Liberals falling far behind Pierre Poilievre’s Conservatives.

Surveys also show public opinion toward immigration has shifted, with critics saying the federal government has not matched its ambitious immigration targets with proportional housing and infrastructure strategies.

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