Ottawa to launch $6B infrastructure fund to help build homes – with strings attached

OTTAWA — The upcoming federal budget will include a $6-billion infrastructure fund that would require provinces and territories to adopt certain housing policies in order to access the money, Prime Minister Justin Trudeau said Tuesday.

Trudeau was in Dartmouth, N.S., alongside Housing Minister Sean Fraser as part of the government’s pre-budget tour, which aims to drum up attention and win back support for the Liberals on cost-of-living issues.

“Building more homes faster — this is how we’ll address the shortage of housing options for Canadians, and this is how we’ll make it fairer for younger generations who feel like they’re falling behind because housing costs are too high,” Trudeau said.

The federal government plans to make $1 billion directly available to cities for urgent infrastructure needs, with that money flowing in the 2024-25 fiscal year.

The other $5 billion would be allocated to agreements with provinces and territories meant to support long-term priorities. That funding would flow over a longer period of time, with those details hammered out during negotiations.

Municipalities have been aggressively urging the federal government to commit more dollars toward infrastructure, noting their communities cannot significantly ramp up homebuilding to match population growth without things like water supply and roads.

While Tuesday’s announcement appears to respond to that plea, the federal government is also using the infrastructure fund to push provinces and territories to co-operate on the Liberal government’s housing agenda.

To access funding, provinces and territories would have to agree to a set of conditions, including the adoption of the recently announced renters’ bill of rights, which would create a national standard lease agreement and require landlords to disclose previous rent prices.

The federal government is also demanding that provinces and territories freeze development charges for three years and require municipalities to broadly allow the construction of fourplexes.

Finally, it wants provinces and territories to adopt upcoming changes to the national building code as well as automatically approve the construction of homes that follow designs taken from the Liberal government’s upcoming housing design catalogue.

The deadline to secure a deal will be Jan. 1, 2025, for provinces and April 1, 2025, for territories.

If a province or territory doesn’t secure a deal by those deadlines, their funding will be transferred to the municipal stream of the infrastructure fund, the government said.

The announcement is being met with pushback from some premiers who are displeased with the federal government’s decision to place conditions on provinces and territories.

Last week, Ontario Premier Doug Ford said his government would not introduce legislation to automatically legalize fourplexes across the province, arguing that such a move would lead to pushback from some residents.

Following Tuesday’s announcement, a spokeswoman for Ontario Housing Minister Paul Calandra said the provincial government will wait for more details from the federal government and is open to collaboration.

“However, we know that local municipalities know their communities best and don’t believe in forcing them to build where it doesn’t make sense,” said Justine Teplycky.

Saskatchewan blasted Tuesday’s announcement as another attempt by the federal government to wade into provincial jurisdiction.

A spokesman for the provincial government said “while multi-dwelling housing may be a high priority in major urban centres like Toronto and Vancouver, it is not a high priority in most Saskatchewan communities.”

New Brunswick Premier Blaine Higgs said he hadn’t read the details yet but called the threat to redirect funding directly to municipalities if provinces don’t agree to the conditions “a bit unfortunate.”

Meanwhile, British Columbia Premier David Eby welcomed the federal government’s decision to attach strings to the funding.

“If provinces don’t step up … the money should come to the provinces who are doing the work,” Eby said.

Skyrocketing shelter costs have ratcheted up the pressure on all levels of government to do more on housing.

The Liberal federal government, in particular, has faced the brunt of the blame for housing unaffordability, to the benefit of federal Conservatives who are riding high in public opinion polls.

In a statement, Conservative housing critic Scott Aitchison panned Tuesday’s announcement as another “photo-op” that won’t get the homes Canadians need built.

“Canadians can’t live in Liberal photo-ops or announcements. Common sense Conservatives will fire the gatekeepers and remove the bureaucracy to build the homes Canadians can afford,” Aitchison said.

Ahead of the federal budget, which is set to be presented on April 16, Trudeau has promised that one of its major focuses will be on expanding housing supply.

The Canada Mortgage and Housing Corp. estimated in September that the country needs to build 5.8 million homes by 2030 to restore affordability.

Tuesday’s announcement noted the upcoming budget will also add $400 million to the existing housing accelerator fund.

The first $4-billion phase of the fund saw Ottawa striking deals with cities and offering money in exchange for changes to municipal bylaws and regulations that are supposed to boost homebuilding.

The Liberal government also said that future public-transit funding will require municipalities to meet certain criteria.

Requirements would include eliminating all mandatory minimum parking requirements and allowing high-density housing within 800 metres of a high-frequency transit line.

Municipalities would also have to approve high-density housing within 800 metres of post-secondary institutions.

— With files from Allison Jones in Toronto, Hina Alam in Fredericton and Ashley Joannou in Vancouver.

Nojoud Al Mallees, The Canadian Press