Federal government pledges $6B for housing in new infrastructure fund

Some money only accessible if provinces, territories meet certain conditions

Elizabeth Thompson · CBC News

The federal government is pledging billions of dollars in new money to tackle Canada’s housing crisis, but much of it will be accessible only to provinces and territories that agree to certain conditions, Prime Minister Justin Trudeau announced Tuesday.

Speaking in Dartmouth, N.S., Trudeau announced the federal government is creating a new $6-billion Canada Housing Infrastructure Fund.

“We’re taking the challenge of building more homes, faster, in this country head-on … This is how we’ll address the shortage of housing options for Canadians,” he said. “This is how we will make it fairer for younger generations who feel like they are falling behind because housing costs are too high.”

The money will be dedicated to the construction and upgrading of water, wastewater, stormwater and solid waste infrastructure, something cities have said is critical to building more housing.

Of the $6 billion in the fund, $1 billion will go directly to municipalities for “urgent infrastructure needs,” the Prime Minister’s Office said in a news release.

Commitments for ‘missing middle’ homes required

The other $5 billion will be set aside for provinces and territories — but they can only access the money if they make certain commitments.

Those include allowing more “missing middle” homes, including duplexes, triplexes, townhouses and multi-unit buildings, and imposing a three-year freeze on development charges for cities with more than 300,000 people.

Housing Minister Sean Fraser says most of the money announced will be subject to negotiations with provinces and territories. (Sean Kilpatrick/Canadian Press)

The money won’t flow all at once, Housing Minister Sean Fraser said later in a media briefing.

“The first $1 billion will be for shovel-ready projects that are ready to go and that money will flow immediately,” he said. “When it comes to the additional $5 billion, that is going to be spread out over a longer period of time and the exact flow of money will be subject to negotiations with our provincial and territorial partners.”

The government has not yet responded to a request from CBC News for a breakdown of how much money it is budgeting for each year and how much it is allocating to each province.

The federal government said the provinces will have until Jan. 1 to secure agreements. Territories will have until April 1.

If agreements aren’t reached, the money will flow directly to cities.

Fraser defended the decision to attach strings to the federal money.

“When we put federal money on the table, provincial governments are going to have a choice,” he said. “Do you want support to expand infrastructure and make the decisions that will make it easier to build homes? Or do you want to go it alone and adopt measures that restrict housing supply, knowing that a consequence will be a lack of federal infrastructure funding?”

Negotiations could prove more difficult with some provinces than with others.

One of the conditions attached to the money would allow fourplexes to be built “as of right.” Ontario Premier Doug Ford has rejected the idea of allowing fourplexes to be built automatically across the province.

Ontario Premier Doug Ford has balked at the idea of allowing fourplexes to be built automatically across the province. (Christopher Katsarov/The Canadian Press)

“I’m not sure what Premier Ford’s next move may be, but we wanted to incentivize the kinds of changes that are needed to actually solve the national housing crisis,” said Fraser.

Quebec could also present its own distinct challenges. The province has long maintained that municipalities fall under provincial jurisdiction and that any money destined for cities and towns has to flow through the Quebec government.

Quebec has often pushed back on strings attached to federal funding.

Fraser said he has had good experiences negotiating with Quebec and is optimistic a deal can be reached.

“I’m very much looking forward to the discussions that we will have with the provincial government as we mutually work toward securing investments in Quebec that will build infrastructure that make it easier to build homes,” he said.

The federal government is also topping up its housing accelerator fund with an additional $400 million over three years, which it says will help build another 12,000 homes, Trudeau announced Tuesday.

The announcement is the latest in a series of announcements from the federal government as Trudeau and his ministers fan out across the country ahead of the April 16 federal budget.

On Monday, Trudeau announced $1 billion for a national school food program. Last week, he announced new measures for renters, including a renters’ bill of rights.

Fraser said Tuesday’s announcement is part of a larger suite of housing policy announcements that the government plans to reveal in the coming days.

The announcements are expected to continue until Finance Minister Chrystia Freeland tables the budget on April 16.

What issues would you want to see addressed in the next federal budget? Let us know in an email to ask@cbc.ca.