All about Justin Trudeau's ambitious plan to construct 3.9 billion homes to solve the Canadian housing crisis

In a bid to alleviate a severe housing shortage in Canada, Housing Minister Sean Fraser unveiled a new strategy on Friday that leverages federal public lands for the development of more affordable homes. This initiative, part of the broader Canada’s Housing Plan, promises to build nearly 3.9 million homes by 2031, marking a significant scale-up from prior efforts to address the national housing crisis.

The housing crisis in Canada

Housing supply has not kept pace with Canada’s immigration-fueled population growth. Affordability worsened during the pandemic as housing prices surged due to high demand and low borrowing costs.

According to a recent report by the parliamentary budget officer, Canada needs to construct approximately 3.1 million homes by 2030 to bridge the existing housing gap. This stark number has pushed the Trudeau government to adopt unprecedented measures to boost housing availability and affordability, CBC reported.

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Trudeau’s ambitious plan

Prime Minister Justin Trudeau, speaking at a news conference in Vaughan, Ontario, described the strategy as “the most comprehensive and ambitious housing plan ever seen in Canada.” Trudeau highlighted that the new plan aims to extend beyond mere construction, addressing needs across renting and homeownership and supporting Canadians who struggle with housing costs.

Using public lands

A cornerstone of the new policy is the innovative use of underused public lands. Under the plan, these lands will be offered to developers through long-term leases, a move that Fraser insists will keep the lands under federal control while significantly boosting the development of affordable housing units. Details of these plans are expected to be more fully revealed in the upcoming 2024 budget, set for April 16.

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In addition to land use, the strategy includes financial incentives such as the Canada Secondary Suite Loan Program, which offers homeowners low-interest loans up to $40,000 to create secondary suites in their residences. This is seen as a way to quickly expand the housing stock available to Canadians. Further measures to curb housing speculation include extending the ban on residential property ownership by foreign investors until 2027 and increasing tax incentives for apartment builders. Trudeau’s administration is also making strategic moves in the rental market, extending GST exemptions to new student residences and promoting sustainable development across various demographics.

Critics remain unimpressed

Critics, however, remain skeptical. New Democrat housing spokesperson Alexandre Boulerice voiced concerns that the government’s actions were too delayed, pointing out Trudeau’s eight years in office with insufficient progress on making housing more affordable. Despite such criticisms, the Canadian Home Builders’ Association has expressed support for the new measures, emphasizing the need for a comprehensive approach to solve the housing affordability crisis.

As the federal strategy unfolds, it seeks crucial cooperation from provinces and territories, some of which have previously contested Ottawa’s mandates as overreaching into provincial jurisdiction. Nonetheless, Fraser remains optimistic, asserting the necessity of overcoming jurisdictional challenges to meet the housing needs of Canadians effectively.