Canada’s federal government has tabled a proposal to dedicate $1.7 billion to housing construction, with no strings attached.
The money would be targetted at lowering development fees or other levies on new housing to speed up the pace of construction in Canada.
The fund is in addition to the $13 billion for the Build Canada Homes agency and the more than $50 billion in broader local infrastructure projects introduced by Prime Minister Mark Carney in Budget 2025.
The federal funding is meant to help reduce development fees or other levies on new housing to speed up the pace of construction in Canada.
Finance Minister François-Philippe Champagne, who tabled legislation for the proposed fund on Thursday, said the federal government isn’t attaching strings to how the money has to be spent, only that it must help with efforts to scale up housing stock across the country.
“It’s going to be different in different parts of their country,” Champagne told reporters on Parliament Hill. “With respect to this particular program, we’re going to rely on our provincial and territorial partners to use that money in the most efficient way to increase the supply.”
Carney's Build Canada agency has set a target of building 500,000 new homes per year, a large number compared to the average of about 230,000 new builds per year in recent years, but the program has been plagued by local regulations, zoning restrictions and other legislation at the provincial and municipal levels.
Prior to the official announcement, the Ontario government said it will use the funding to freeze its harmonized sales tax from some newly built homes for one year, forecasting the freeze would take up to $130,000 in tax off the cost of an eligible new home, resulting in the construction of 8,000 additional homes
Champagne said stopping the HST was Ontario’s approach, but other provinces may want to add more funds to their federal allotment for other existing programs or initiating new program.
In a press release, Champagne said the money could also be used to improve productivity in construction as well as reducing internal trade barriers between provinces and territories to get more homes built.
Conservative housing critic Scott Aitchison said in a press release on Thursday the Liberal government is “throwing out billions of taxpayer dollars with no guarantees of results, targets or accountability to build homes.”
Aitchison included a Conservative pitch to remove the federal sales tax from all new homes valued up to $1.3 million, adding municipalities that fail to meet targets should not be rewarded for raising building costs.
How much money from the fund each province or territory receives would be based in part on declining home sales and long-standing housing affordability challenges in each market.
Champagne said the funding would be ready to distribute this spring.
