Trudeau announces permanent transit fund requirement of housing density

Construction next to a transit hub. (TransLink)

In exchange for a share of the Government of Canada’s forthcoming new Permanent Transit Fund, there will be a federal requirement that municipalities enable transit-oriented development for housing.

Prime Minister Justin Trudeau announced today that municipal governments must unlock housing near public transit if they are to receive the new annual federal subsidy for improving their public transit infrastructure.

This includes allowing high-density residential uses within 800 metres of a high-frequent public transit service, such as frequent bus services, streetcars, light rail transit, and subways, as well as within 800 metres of post-secondary education institutions.

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Additionally, there would be an elimination of all minimum vehicle parking requirements within 800 metres of a high-frequent public transit service. A new federal Housing Needs Assessment would also be required for all jurisdictions with a population greater than 30,000.

“When it comes to the major $3 billion annual permanent transit fund, we’re also going to be making sure cities are adopting changes so that we get the most out of the investments,” said Sean Fraser, the federal Minister of Housing, Infrastructure, and Communities, during a press conference today.

Such measures by the federal government follow the Government of British Columbia’s newly implemented transit-oriented development legislation, which also stipulates that municipalities within BC must densify areas within 800 metres of rapid rail transit stations and within 400 metres of designated bus loops/exchanges. As a new policy, BC also requires municipalities to perform a Housing Needs Assessment every five years to better track housing demand and supply, and the measures taken to address housing affordability.

As for the federal Permanent Transit Fund, Trudeau’s Liberals first formally announced it in 2021, with a program start date of the 2026/2027 fiscal year. This was originally a campaign promise made ahead of the 2019 federal election.

However, Canada’s three largest public transit authorities — Toronto Transit Commission (TTC), Société de transport de Montréal (STM), and Metro Vancouver’s TransLink — have been jointly urging the federal government to expedite the start date of the Permanent Transit Fund to the 2024/2025 fiscal year. This would enable the public transit authorities to accelerate critical infrastructure work, such as the procurement of new replacement buses and trains to replace aging vehicles and the expansion of bus depots.

For instance, TransLink previously estimated it could receive roughly $3.75 billion over 10 years — or $375 million annually — for its share of the nationwide Permanent Transit Fund. The TTC, STM, and TransLink combined account for 60% of Canada’s total public transit ridership.

To date, federal officials have not ruled out expediting the start of the Permanent Transit Fund as requested.

The requirement that areas within 800 metres of post-secondary education institutions be enabled for higher residential density is likely a response to the outcry that the recent surge in international students has exacerbated Canada’s rental housing challenges, especially in key urban markets with major universities.

Today’s announcement by Trudeau also included a new $6 billion Canada Housing Infrastructure Fund, which will support the cost of building new, improved, and expanded water, wastewater, stormwater, and solid waste infrastructure to support more residential density and population growth. In exchange for this federal funding, the provincial governments must require their municipal governments to allow gentle densification — at least four units on a single-family lot — and freeze development cost charges/fees on new residential construction for three years.

As well, the existing federal Housing Accelerator Fund, which has been tapped out, will be replenished with an additional $400 million.

These announcements come just ahead of the 2024 federal budget announcement later this month.

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