The 2022 Federal Budget was recently released, and affordable housing is a clear primary focus. Since 2015, substantial housing investments have been made through the National Housing Strategy, and the federal government plans to invest more than $72 billion into the Strategy by 2028 ($24.2 billion has been invested to date). The 2022 Federal Budget builds upon this existing framework, outlining additional funding to go towards specific housing initiatives and mechanisms designed to create much needed houses and rental units as quickly as possible.

Renovations and Repairs

$2.9 billion is being allocated under the National Housing Co-Investment Fund, which will allow for the creation of 4,300 units and repairs to 17,800 units for vulnerable Canadians. Targets for affordability and energy efficiency have been set for the Rental Construction Financing Initiative, and those developers who exceed targets will be eligible to have repayable loans converted to non-repayable loans. A Multigenerational Home Renovation Tax Credit has been proposed under the new budget, which would provide up to a $7,500 tax credit for constructing secondary suites for a senior or an adult with a disability.

New Construction

To create more units faster, several measures have been proposed in the 2022 budget. The Community Infrastructure and Housing Accelerator Fund will provide a flexible and streamlined option for municipalities to speed the construction of needed infrastructure such as non-profit housing, hospitals, and community centres. The Fund aims to create 100,000 net new units within 5 years. Existing infrastructure programs will be given increased flexibility for provinces, territories, and municipalities who take steps to increase housing supply to access additional infrastructure funding. The Rapid Housing Initiative will be extended for a third round, with a goal of 6,000 new units over 2 years, with at least 25% of the new funding being specifically allocated to women-focused housing. $150 million is being provided over 2 years to the northern territories to support affordable housing and related infrastructure. Funds are also being reallocated from certain housing initiatives to form a new Co-operative Housing Development Program, with the intention to create 6,000 co-operative housing units. And, especially in light of individuals struggling with rent and mortgage payments due to the pandemic, $475 million is being allocated in 2022-23 to give those facing housing affordability issues a one-time payment of $500 to ease financial strain.

Greener Homes and Communities

Several Natural Resources Canada initiatives have been announced in the 2022 budget to create greener buildings and communities. Focuses include updating building codes, promoting the use of lower carbon construction materials, making buildings climate-resilient, and supporting retrofits to make existing housing units greener. Significant funding has also been allocated to conducting research on innovative environmentally friendly construction options, and providing low-interest loans and grants to low-income housing providers to retrofit their buildings. A Greener Neighbourhood Pilot Program will also be instituted based on the Energiesprong model adopted in the Netherlands, the UK, France, Germany, and the United States. The Energiesprong model would collectively retrofit entire neighbourhoods at the same time, with the pilot focused on 6 community housing neighbourhoods in Canada.

Addressing Homelessness

Investments are being made in those organizations providing supports to chronically homeless individuals to ensure they have the resources required to maintain housing. $18.1 million will also be invested over 3 years for Infrastructure Canada to conduct research into what more can be done to address homelessness across the country. Recognizing that veterans experience homelessness at a higher rate than the average citizen, $62.2 million will be invested over 3 years for Infrastructure Canada and Veterans Affairs Canada to launch a new Veteran Homelessness Program to provide rent supplements and targeted supports specific to the needs of veterans.

First Time Home Buyers

The First-Time Home Buyer Incentive has been extended to March 31, 2025, and the government is exploring options to make the program more receptive to the needs of first-time home buyers, and especially for single-led or single-income households who are typically at a disadvantage in attaining home ownership. The First Time Home Buyers’ Tax Credit will also be doubled to $10,000, and will be applied to homes purchased on or after January 1, 2022. $200 million has been allocated to rent-to-own programs across a variety of housing types, providing a pathway to homeownership for renters. And most notably, a Tax-Free First Home Savings Account (TFFHSA) has been proposed, which would allow individuals to put aside $8,000 per year to a maximum of $40,000, with contributions being tax deductible and withdrawals being non-taxable.

Protections for Buyers and Renters

A Home Buyer’s Bill of Rights will be developed by the office of the Minister of Housing and Diversity and Inclusion, in consultation with provinces and territories over the next year. One objective of the Home Buyer’s Bill of Rights is to propose a plan to end blind bidding. It will also ensure the legal right to home inspections and transparency on historical sales prices on title searches, among other things. It is highlighted in the budget that corporate acquisition of large real estate portfolios can drive up rent and home prices, and while definitive measures are not outlined in the budget, there is a commitment to examining options for ensuring that residential real estate is primarily used as affordable housing for Canadians.

Curbing Foreign Investment

The 2022 budget proposed new rules targeted at house-flippers to ensure that the sale of properties flipped within 12 months would be taxed as business income. Assignment sales (where a house is resold before it has been lived in, or even constructed) are also to be uniformly taxable for GST/HST purposes as of May 7, 2022. And most notably, foreign investment in Canadian Housing has been banned for 2 years. Refugees and those authorized for emergency travel are exempted from this ban.

Resources:

• 2022 Budget: A Plan to Grow Our Economy and Make Life More Affordable