 "A crane stands between condo buildings in Liberty Village neighbourhood in Toronto, Ontario, Canada. Reuters")
To expedite the building and renovation of homes, Prime Minister Justin Trudeau on Tuesday established the $6 billion ($4.42 billion) Canada homes Infrastructure Fund.
Why it’s important
Due to price and rental increases brought on by a fast growing immigrant population that significantly exceeds the supply of affordable dwellings, Canada is experiencing a problem related to housing affordability. In addition to significant inflation, mortgage payments have increased due to 22-year high interest rates.
The administration has been under fire from the opposition for taking too long to build new houses, and the situation is said to be contributing to Trudeau’s declining popularity in the polls.
Context
The fund, which will be included in the next budget on April 16, is one of the several initiatives the administration has put out to encourage the building of homes.
About one-fifth of the funds will be given by the government to municipalities for the construction of necessary infrastructure surrounding homes, with the remaining funds going to the provinces and territories for the construction of middle-class housing.
Key quotes
“We need more affordable homes, and we need the infrastructure to help build these homes. That’s why in Budget 2024, we’re building more infrastructure, building more homes, and helping more Canadians find a place to call their own,” Trudeau said.
Impact Shorts
More Shorts“Since we launched the Housing Accelerator Fund last year, we have cut enough red tape to build 750,000 new homes over the next decade. It is working, so we are investing another$400 million,” Finance Minister Chrystia Freeland said.
Wall Street’s main indexes fell on Tuesday, with Tesla’s stock one of the biggest drags on the S&P 500 and Nasdaq.00:0101:57
By the numbers
C$1 billion to be allocated to municipalities to support urgent infrastructure needs such as water, sanitation etc. The remaining C$5 billion will be for agreements with provinces and territories to support long-term priorities. The government also announced topping up of the C$4 billion housing accelerator fund launched last year by C$400 million.
($1 = 1.3565 Canadian dollars)