A roofer working on a new housing development in Salaberry-de-Valleyfield, Que., southwest of Montreal.Christinne Muschi/The Canadian Press
Federal spending on housing is projected to drop by more than half over the next three years, according to a new report by the Parliamentary Budget Officer.
The finding is at odds with the Liberal Party’s campaign pledge to bring in Canada’s most ambitious housing plan since the Second World War with billions in funding.
The government’s Nov. 4 budget did follow through with a campaign promise to launch a new agency called Build Canada Homes, setting aside $7.3-billion over five years.
However the PBO points out that overall federal spending on housing is set to decline to $4.3-billion in 2028-29, down from $9.8-billion in the current fiscal year – a 56-per-cent reduction.
The PBO figures assume that various housing programs will expire, or “sunset,” however government departments could decide to extend them.
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Jason Jacques, the interim PBO, said in a statement that Build Canada Homes is expected to add only “a modest amount” to the housing supply.
The PBO estimates about 26,000 units will be created over five years, which would be a 2.1-per-cent increase in housing completions relative to the PBO’s baseline projection.
“The federal government says it wants to double housing construction over the next decade. However, no detailed plan to reach that goal has been released,” the PBO said Tuesday.
Finance Minister François-Philippe Champagne said the PBO report doesn’t account for future spending decisions the government will make over the coming years.
“Sometimes you need a bit of nuance,” he told reporters. “Without getting technical, obviously there’s a number of decisions that will have to be taken from now to ’28-’29.”
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Housing Minister Gregor Robertson expressed a similar view, saying what has been announced to date is an “initial” investment.
“This is just the beginning. We’re going to deliver a ton of affordable housing, and we’re going to leverage a lot of investment from across Canada to get that done,” he told reporters following a cabinet meeting.
Prior to the budget, Prime Minister Mark Carney announced in September that Build Canada Homes will partner with existing developers, rather than entering the business of building homes itself.
He said then that the new entity would focus on “deeply affordable” housing, using public land for housing and helping get projects off the ground so that “builders can do what they do best, which is to build.”
The Liberal platform had said the agency would “get the federal government back into the business of building homes.”
The Prime Minister’s September remarks were welcomed by developers, including the Building Industry and Land Development Association.
Following the budget’s release, some critics pointed out that the housing funding fell short of the amounts promised during the campaign.
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The budget included plans to find about $60-billion in internal savings over five years, with specific breakdowns by department.
The Housing, Infrastructure and Communities department listed savings that would ramp up to about $1.7-billion a year. About half of this would be found by “modernizing” operations, “streamlining” program delivery and “recalibrating” government programs, it said. The other half would be found by “recalibrating” government programs led by the Canada Mortgage and Housing Corporation. No further details were provided in the budget.
Kevin Lee, CEO of the Canadian Homebuilders Association, said the government should be doing more to reduce taxes and cut red tape if it wants to support homebuilding.
He said the new agency is primarily aimed at social housing and won’t help affordability in the broader market.
“The PBO report is pretty much pointing out what we’ve been saying all along, which is that Build Canada Homes is fine, but it’s certainly not going to help the next generation of Canadians become homeowners or anything like that,” he said.
Mike Moffatt, founding director of the University of Ottawa’s Missing Middle Initiative, said the government has not clearly stated how it will manage existing programs that are set to expire.
“The government lacks a coherent plan or vision on the future of housing in Canada,” he said. As for Build Canada Homes, he said it looks like a good program, but it lacks clear benchmarks that can be used for accessing performance.
He also said the Liberal government has so far overpromised and underdelivered when it comes to building new housing.
“The government’s rhetoric does not match their actions,” he said.
Conservative Leader Pierre Poilievre raised the PBO report Tuesday in Question Period, saying it shows the Prime Minister has broken his housing promises.
“Why won’t he listen to us and stop building bureaucracy so that we can start building homes?” he said.
NDP MP Jenny Kwan said the PBO’s findings are “shocking” and deeply concerning.
Ms. Kwan said the report shows that what has been announced to date “is barely a drop in the bucket to address the housing crisis.”