Prime Minister Mark Carney announced plans to bring back a long-discontinued tax credit aimed at encouraging rental housing construction, despite its past criticism as inefficient and overly generous to wealthy investors.
Blacklock's Reporter says the program, known as the Multi-Unit Residential Building Tax Incentive, or MURB, was scrapped in 1981 after costing taxpayers the equivalent of $11,000 per apartment built.
“I am not a career politician,” said Carney. “I am a pragmatist. I am here to get things done.”
He argued the program had previously spurred tens of thousands of new rental units, and framed its revival as part of a broader plan to tackle the housing crisis with “ambitious but pragmatic” policy.
Originally launched in 1974, the MURB program allowed speculators to claim generous tax credits through depreciation and capital cost allowances on apartment buildings. Though it did stimulate a construction boom — 563,000 apartments were built between 1974 and 1981 — critics pointed to massive inefficiencies and rising costs.
A 1981 report by the Canada Mortgage and Housing Corporation titled Tax Expenditures: Housing found that the true beneficiaries of the MURB provision were developers, promoters and wealthy investors taking advantage of tax shelters.
The report warned that many buyers lacked real estate knowledge and were motivated solely by tax breaks, often overpaying for inflated projects with poor long-term prospects.
“The MURB provision is not considered to be an efficient mechanism for promoting rental investment,” the report concluded, noting that many of the projects wouldn’t stand on their own merit without tax incentives.
CMHC consultants estimated the program cost taxpayers $242 million at the time — roughly $832 million in today’s dollars. While 170,000 of the apartments were believed to have been built with the intention of being sold or held by private investors, the report acknowledged that it was difficult to verify exact figures.
“There is little question MURBs were an important component of the recovery in rental construction in the mid to late 1970s,” said the CMHC, but it also suggested the market might have corrected itself without government intervention.
Carney gave no explanation for reviving the policy now, more than four decades after it was abandoned, but made clear he sees it as part of a practical solution to address Canada’s housing shortage.
