Trudeau Unveils $15B Plan for Apartment Loans

Nikita Pradhan
Nikita Pradhan News
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Prime Minister Justin Trudeau has proclaimed a $15-billion add-on to the federal government’s Apartment Construction Loan Program (ACLP) and articulates the government’s intention to exploit the forthcoming $55-billion program to stimulate provincial and territorial collaborations aimed at amplifying the number of rental units across Canada.

Trudeau’s declaration of “Canada Constructs” stands as the freshest in a series of campaign-style proclamations anticipated to persist until Finance Minister Chrystia Freeland introduces Budget 2024 on April 16.

Canada Constructs: Revolutionizing Affordable Housing

“Canada Constructs is poised to revolutionize affordable apartment fabrication in tandem with provinces and territories,” Trudeau asserted on Wednesday during a press briefing in Toronto. “It will furnish economical loans, expedite development, and erect undertakings of the magnitude requisite to fulfil the pressing requirements of Canadians.

“We are poised to render the complete reservoir of funding accessible for reciprocal alliances with provinces and territories that proffer ambitious and equitable housing blueprints.”

Federal Flexibility and Municipal Collaboration

For provinces and territories to access federal funding, they must adhere to benchmarks established by a recent federal-B.C. collaboration aimed at constructing thousands of rental units.

These benchmarks entail a commitment to construct on government-owned, non-profit, community-owned, and unoccupied lands, as well as streamlining procedures to reduce development approval timelines to no more than 12 to 18 months.

“In the future, we will seek to forge bilateral agreements to address the specific priorities of provincial governments that are willing to match our efforts, mirroring the approach taken by the Government of British Columbia,” explained Housing Minister Sean Fraser.

When questioned on Wednesday about provinces that have been reluctant to collaborate with the federal government on other housing initiatives, Trudeau affirmed that his government is prepared to continue sidestepping provincial authorities.

“In an ideal scenario, we would collaborate with all provinces provided they demonstrate sufficient ambition in the realm of housing. We are ready to work alongside them as partners,” he stated. “If a province chooses not to pursue ambitious housing goals, that is their own. We will instead collaborate with municipalities within that province that exhibit ambition.”

The new $6 billion Canada Housing Infrastructure Fund, unveiled by the Liberal government on Tuesday, allocates $5 billion for provinces and territories that agree to meet certain criteria. Should agreements fail to materialize with provinces and territories, the federal funds will be directed straight to municipalities.

Toronto’s Perspective: A Hopeful Outlook

Toronto Mayor Olivia Chow, present and addressing Wednesday’s announcement, expressed optimism regarding the potential impact of the new Canada Builds initiative, foreseeing the construction of 17,000 fresh rental units in the city, accommodating 30,000 individuals.

“We possess the suitable sites, the requisite ambition, and a robust partnership with the federal administration. Together, we can reinvigorate Toronto’s housing sector,” Chow asserted.

The $15-billion augmentation to the Apartment Construction Loan Program, succeeding a previous $15-billion increase announced in the federal government’s autumn economic declaration, elevates the program’s objective to finance the establishment of over 131,000 novel rental units throughout Canada by 2031-32.

According to government figures, since its inception in 2017, the ACLP has pledged over $18 billion in loans to facilitate the creation of more than 48,000 new rental units.

Reforming Eligibility Criteria

Additionally, the federal government plans to revise the ACLP’s eligibility criteria by extending loan durations, broadening financing accessibility to encompass housing for seniors, and implementing a portfolio approach to eligibility standards, enabling developers to proceed with multiple projects concurrently.

For housing developers to secure federal financing through the ACLP, proposed ventures must encompass a minimum of five rental units, possess a loan magnitude of at least $1 million, and address the demand for rental accommodation in the housing marketplace.

The Canada Mortgage and Housing Corporation, responsible for administering ACLP loans, notes that in numerous instances, to qualify, 20 per cent of a proposed project’s units must feature rents below 30 per cent of the median total income for all families within the locality, with the total residential rental income mandated to be at least 10 per cent below its gross attainable residential income.

In response to the latest announcement, NDP housing critic Jenny Kwan voiced scepticism, asserting that Canadians cannot entrust the government, which she claims facilitated the housing crisis, to rectify it.

“Trudeau’s detached housing strategy predominantly favours loans to profit-driven developers, failing to aid Canadians seeking affordable housing,” Kwan asserted in a statement furnished to CBC News. “Today’s announcement earmarking $15 billion for a program wherein 97 per cent of the produced units are deemed unaffordable only compounds the issue.”

Kwan cites a 2022 report by the non-profit research organization Blueprint ADE for the National Housing Council, an advisory body to the minister of housing, infrastructure, and communities. The report estimated that only approximately 3 per cent of units financed by the Rental Construction Financing Initiative (RCFI), initiated in 2017 and later renamed the Apartment Construction Loan Program in 2023, would be deemed suitable and affordable for low-income households.

A 2023 report from the National Housing Council highlighted that while low-income households represent the majority of those facing core housing needs, the RCFI had yielded minimal units that could cater to their requirements.

“Canadians require more affordable housing constructed at a swifter pace, yet the Liberals appear poised to once again disappoint Canadian families,” remarked Kwan.

Conservative Critique: Rehashing Failed Programs

Scott Aitchison, a Conservative housing critic, criticized Trudeau’s announcement as merely a photo opportunity, essentially reiterating support for a “failed loan program.”

“Justin Trudeau’s response entails rehashing a failed loan program, which has resulted in the completion of only 11,000 homes over seven years, while also introducing further bureaucratic hurdles that will inevitably inflate housing costs,” stated Aitchison in a media release.

“Trudeau’s photo ops will hardly make a dent in the 5.8 million homes needed to restore housing affordability for Canadians. Sensible Conservatives advocate for the removal of gatekeepers and bureaucratic barriers to facilitate the construction of homes within reach for Canadians.”

Last Updated on by Nikita Pradhan

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