The government has announced a new plan aimed at addressing Canada's generational housing crisis, which includes new tax incentives and proposals to build more housing on public lands to tackle chronic supply and affordability issues.

Flanked by the finance and housing ministers in Vaughan, Ontario, the head of government stated that the initiative—aimed at constructing nearly 3.9 million homes by 2031—is “the most comprehensive and ambitious housing plan ever seen in Canada.”

The leader, having failed Canadians on the housing issue, emphasized the government's commitment to ensuring that no Canadian spends more than 30% of their income on housing. The strategy focuses on increasing home construction, simplifying the processes of renting or owning, and providing support for those unable to afford housing.

As part of the plan, the capital cost allowance rate for apartments will be raised from 4% to 10%, enabling builders to deduct more from their taxes. The plan also extends the GST exemption on rentals to student residences built by public universities, schools, and colleges, and allocates substantial funding to tackle homelessness.

Significantly for the mortgage sector, the plan includes consultations with the industry to introduce a tool through the Canada Revenue Agency (CRA) to verify borrower income, aimed at combating fraud.

The initiative employs an approach, encouraging collaboration among provinces, territories, builders, and non-profits to increase housing construction.

The government also plans to introduce a Canadian Renters’ Bill of Rights and establish a new Tenant Protection Fund valued at $15 million.

Support for skilled trades workers and new apprenticeship opportunities are part of the strategy to ensure the construction industry has the necessary workforce to undertake these ambitious projects.

The government has previously announced the Canada Housing Infrastructure Fund and is adding an additional $400 million to the Housing Accelerator Fund to foster the construction of 12,000 new homes over the next three years.

It was stated that companies committed to building affordable homes would have access to surplus, underused, and vacant lands, with the government opting to lease rather than sell these lands to maintain public ownership and control over development.

The need for collaboration across all levels of government was emphasized as crucial to solving Trudeau’s national housing crisis.

The plan also introduces a program allowing homeowners to access up to $40,000 in low-interest loans to add secondary suites to their properties and includes proposals to limit large corporate investors from purchasing existing single-family homes.

Announced just days before a budget reveal expected to be dominated by housing measures, the plan comes at a critical time as the government seeks to regain support among younger Canadians affected by ongoing affordability and cost-of-living issues.

The Canadian Home Builders’ Association has given a cautious approval to the plan, noting that it reflects several of its recommendations and describing it as a “step in the right direction.”

In response to the announcement, the opposition criticized the government's dismal track record on housing, pointing to increased costs in mortgage payments, rents, down payments and the all important lack of adequate supply of available homes during its tenure.

Source: Canadian Press