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Federal Budget

Members ContentFEDERAL BUDGET 2024


This year’s housing-focused budget – Budget 2024 – Fairness for Every Generation - contains several key CHBA recommendations and is a direct result of strong and steady advocacy by CHBA on behalf of its members—as was acknowledged by Minister Fraser on Friday on CBC’s Power and Politics, where he specifically thanked CEO Kevin Lee and the Canadian Home Builders’ Association for providing “invaluable advice that helped to lead to policies the federal government is rolling out that [they] believe will to help scale home building production.”
Topping off continuous government relations engagement with the federal government throughout the year, CHBA was invited to yesterday’s embargoed reading of the 2024 Federal Budget, providing CHBA with advance access to the budget documents and the opportunity to engage with Department of Finance officials on the budget and other pre-budget announcements related to residential construction.

The budget comes on the heels of a series of housing announcements as well as the government’s release of its Federal Housing Plan. CHBA published a press release in response to this plan, available here. The priority of housing affordability and supply was demonstrated in the many pre-budget announcements, and the fact that chapters 1 and 2 of the budget—some 53 pages—were dedicated directly to housing affordability and supply. The list of actions related to CHBA recommendations is very lengthy. Below are the highlights.

30-Year Amortizations for First-Time Buyers Purchasing New Builds (pg. 67)
Budget 2024 announces the government is strengthening the Canadian Mortgage Charter to allow 30-year mortgage amortizations (up from 25) for first-time home buyers purchasing newly constructed homes. This will enable more younger Canadians to afford a mortgage and will encourage new supply. This new insured mortgage product will be available to first-time buyers starting August 1, 2024. The government will bring forward regulatory amendments to implement this proposal. Further details will be released in the coming months.

Commentary: Securing 30-year amortizations on insured mortgages for new construction homes represents a huge win for CHBA members and will go a long way to enable the sector to respond to the government’s goal of getting 5.8M homes built over the next decade. CHBA has put forth strong messaging that industry can’t build houses if buyers can’t access mortgages. CHBA had been calling for a return to 30-year amortization periods for insured mortgages for a decade, but refined the recommendation this past year to apply only to new construction, which is exactly what has been announced by the government. CHBA refined the ask this year given a) the need to focus on new supply, and b) concerns by some over potential price increases to existing homes if applied more broadly – this fine-tuned ask will avoid driving up prices in the existing market. Many commentators still do not understand this, so CHBA will continue to drive home this message, and encourages members to do the same.

Changing How We Build Homes (pg. 53) – Industrial Strategy & Supporting Innovative Housing Technologies
In the coming months, the government will engage with industry and other experts to co-develop a Canadian industrial strategy for homebuilding. This will explore all essential inputs into building homes in Canada, including raw and manufactured materials, supply chains, and building techniques to ensure that all orders of government and industry can achieve our ultimate goal of building homes smarter, faster, and at prices Canadians can afford.

Commentary: This component of the budget is another major win for the sector and a direct result of CHBA’s Sector Transition Strategy (STS). The STS gives a detailed explanation of why factory-built construction is not already a bigger part of the sector, explains the hurdles that exist, and provides a roadmap for the government to support increased productivity and enable a fundamental shift in how most homes in the country are currently built.

To spur the development of innovative housing technologies, Budget 2024 proposes $50 million over two years, beginning in 2024-25, for Next Generation Manufacturing Canada (NGen)—one of Canada’s Global Innovation Clusters—to launch a new Homebuilding Technology and Innovation Fund. NGen will seek to leverage an additional $150 million from the private sector, and other orders of government, to support a targeted $200 million investment in housing innovation in Canada.

Related to this, the National Research Council is also being tasked with finding ways to reduce duplication between factory inspections of modular home components and on-site building inspections, and support efforts to address regulator barriers to help scale up factory-built housing.

In addition, to scale-up more innovative housing solutions, Budget 2024 proposes a further $50 million over two years, beginning in 2024-25, on a cash basis, through Canada’s Regional Development Agencies to support local innovative housing solutions across the country, such as designing and upscaling of modular homes, the use of 3D printing, mass timber construction, and panelized construction.

Commentary: These announcements are components of CHBA’s Sector Transition Strategy (STS). CHBA welcomes these first steps, which can help members scale up their productivity, including through modular and panelized systems. Removing barriers and supporting investment are key components of CHBA’s STS. CHBA has additional recommendations in the STS to support and accelerate this transition and looks forward to working with government directly and through consultations on the Industrialization Strategy to move these recommendations to fruition.

A New Canada Housing Infrastructure Fund (pg. 50)
Budget 2024 proposes to provide $6 billion over 10 years, starting in 2024-25, to Infrastructure Canada to launch a new Canada Housing Infrastructure Fund. The Fund will accelerate the construction and upgrading of housing-enabling water, wastewater, stormwater, and solid waste infrastructure that will directly enable new housing supply and help improve densification. To access the funding, there will be requirements to legalize more housing options by adopting zoning that allows four units as-of-right and that permits more “missing middle” homes, and to have a three-year freeze on increasing development charges from April 2, 2024 levels for municipalities with a population greater than 300,000.

Commentary: These are important steps that the Association has been calling for. CHBA has been advocating for much more housing-supportive investment in infrastructure and transit, tied to housing outcomes like densification. CHBA has also explained to government that rising development taxes (having gone up some 700% over the past 20 years) have been an under-recognized major driver of increasing housing costs in new construction, which have also resulted in much higher prices in resale homes—CHBA is therefore pleased to see this addressed as well. The investments are also contingent on provinces adopting forthcoming editions of the National Building Code, and CHBA is heavily engaged in putting an affordability lens on code changes too.

Leveraging Transit Funding to Build More Homes (pg. 51)
Budget 2024 announces that any community seeking to access long-term, predictable funding through the federal government’s forthcoming permanent public transit fund will be required to take action that directly unlocks housing supply where it is needed most by:

  • Eliminating all mandatory minimum parking requirements within 800 metres of a high-frequency transit line;
  • Allowing high-density housing within 800 metres of a high-frequency transit line; and,
  • Allowing high-density housing within 800 metres of post-secondary institutions.
  • Completing a Housing Needs Assessment for all communities with a population greater than 30,000.

Commentary: The Association has long called for an increase to transit investments and tie them to housing supply outcomes, as those above do. CHBA is pleased to see this added to the Budget and is hopeful that this is the incentive that municipalities need to enable the building of more housing stock in areas with access transit that are conducive to densification.

Building Homes on Public Lands (pg. 34)
The federal government will use all tools available to convert public lands to housing, including leasing, acquiring other public lands for housing, and retaining ownership, whenever possible. The federal government is also conducting a rapid review of its entire federal lands portfolio to identify more land for housing. Budget 2024 proposes to provide $5 million over three years, starting in 2024-25, to support an overhaul of the Canada Lands Company to expand its activities to build more homes on public lands. These reforms will seek to:

  • Cut approval times in half, while abiding by constitutional obligations;
  • Initiate redevelopment processes early;
  • Bundle multiple properties to be transferred at once;
  • Provide leases, including long-term, low-cost leases, for housing providers;
  • Transform underused government offices into multi-use properties;
  • Transfer land from the federal government to Canada Lands Company for $1, whenever possible, to support more affordable housing;
  • Enable housing development on actively used federal properties; and,
  • Work with Crown corporations to redevelop their surplus, underutilized, or actively used properties for housing.

Commentary: This Budget measure is intended to enable the development of 250,000 new homes by 2031. This includes land leasing that can be used to subsidize the development of below-market-rate housing. CHBA has called for the release of public lands for housing development, and smart means to subsidize affordable housing without driving up the cost of market-rate housing, so is pleased to see this coming to fruition. CHBA will engage in the consultation process on how best to proceed with the variety of steps that the government is looking to take to make Crown lands available for housing development.

Topping-Up the Housing Accelerator Fund (pg. 45)
Through 179 agreements signed to date under the Housing Accelerator Fund, the government has committed nearly $4 billion to spur the construction of 750,000 new homes across the country over the next decade. Budget 2024 proposes to provide an additional $400 million over four years, starting in 2024-25, to the Canada Housing and Mortgage Corporation, to top up the Housing Accelerator Fund. This will help fast track 12,000 new homes in the next three years.

Commentary: The expansion of the Housing Accelerator Fund, the design of which CHBA informed, is very welcome. CHBA also supported HBAs who were working with their municipalities to access the Accelerator funds, and stands at the ready to help other HBAs whose municipalities may now apply for this additional funding.

Modernizing Housing Data (pg. 56)
To help modernize housing data, Budget 2024 proposes to provide $20 million over four years, starting in 2024-25 for Statistics Canada and the Canada Mortgage and Housing Corporation to modernize and enhance the collection and dissemination of housing data, including municipal-level data on housing starts and completions.

Commentary: CHBA has long called for much more housing data to inform policy decisions around housing supply and municipal processes and is pleased to see the announcement of more support, including a focus on municipal data. CHBA already publishes its bi-annual Municipal Benchmarking Study to identify issues and opportunities at the municipal level to improve housing supply and affordability, and further data will bolster those efforts and more.

Adding Additional Suites to Single Family Homes (pg. 56)
Budget 2024 proposes to provide $409.6 million over four years, starting in 2025-26, to the Canada Mortgage and Housing Corporation to launch a new Canada Secondary Suite Loan Program, enabling homeowners to access up to $40,000 in low-interest loans to add secondary suites to their homes. It will also make targeted changes to mortgage insurance rules to encourage densification and support the efficient functioning of the housing finance market, by enabling homeowners to add more units to their homes. Details of this program will be announced in the coming months.

Commentary: CHBA continues to strongly support the need to support the construction of more accessory dwelling units (ADUs) and secondary suites and welcomes this budget item. It aligns with CHBA recommendations on the need to support ADUs and more gentle densification. CHBA is also very pleased that the government will consult stakeholders on proposed changes to financing ADUs, as this is an issue that has not previously been addressed. While it is encouraging that the government will be providing access to low-interest loans, the amount of $40,000 is not sufficient, given the actual costs to create secondary suites and ADUs—CHBA has already begun engagement on recommendations to increase that amount.

Building Apartments and Accelerating Investment to Build More Apartments (pg. 42 & 58)
To build more rental apartments, faster, Budget 2024 announces an additional $15 billion in new loan funding, starting in 2025-26, for the Apartment Construction Loan Program, bringing the program’s total to over $55 billion. This investment will help build more than 30,000 additional new homes across Canada, bringing the program’s total contribution to over 131,000 new homes supported by 2031-32. Budget 2024 also proposes to introduce a temporary accelerated capital cost allowance, at a rate of 10 per cent for eligible new purpose-built rental projects that begin construction on or after Budget Day, and are available for residents to move in before January 1, 2036.

Commentary: In addition to the top up and the ability for builders to recover costs faster through the accelerated capital cost allowance, CHBA welcomes the new flexibility of the program's energy efficiency and accessibility requirements, for which CHBA has advocated. Representative pro forma show how reducing these cost-increasing requirements increases the viability of the rental development projects. CHBA will monitor the details of these criteria changes closely. However, to truly “turbocharge” development of rental apartments, it would be best to also widen the current eligibility criteria for the enhanced rental GST/HST rebate to accommodate unique development situations, including those that were under construction already as of September 14. This will help reduce the number of rental developments that may be simply sold as individual condominium units as viability has changed over the course of construction.

More Skilled Trades Workers Building Homes (pg. 59)
Budget 2024 proposes to provide $100 million over two years, starting in 2024-25, to Employment and Social Development Canada for the following:

  • $90 million over two years, starting in 2024-25, for the Apprenticeship Service to help create placements with small and medium-sized enterprises for apprentices. Of this amount, $10 million in 2025-26 would be sourced from existing departmental resources.
  • $10 million over two years, starting in 2024-25, for the Skilled Trades Awareness and Readiness Program to encourage Canadians to explore and prepare for careers in the skilled trades. This funding would be sourced from existing departmental resources.

Commentary: CHBA applauds the introduction of the Skilled Trades Awareness and Readiness Program focusing on high school students and encourages the government to leverage the many great initiatives of CHBA members across the country. CHBA also appreciates continued funding for the Apprenticeship Service and looks forward to working with government colleagues to ensure wider use in the residential construction sector.

Recognizing Foreign Construction Credentials and Improving Labour Mobility (pg. 60)
Budget 2024 proposes to provide $50 million over two years, starting in 2024-25, to Employment and Social Development Canada for the Foreign Credential Recognition Program. At least half of this amount will be to streamline foreign credential recognition in the construction sector to help skilled trades workers build more homes, and the remaining funding will support foreign credential recognition in the health sector.

Commentary: CHBA also welcomes the dedicated investment in the Foreign Credential Recognition program for those in the residential construction sector, recognizing that this will also facilitate interprovincial mobility among Canadians. However, in order for this to be effective, the Government of Canada must first modernize the immigration selection program to ensure that those with the skills and aptitude for home building can garner enough points in the Express Entry system to gain entry to Canada in the first place. This should start with further enhancing the trade-based category system in Express Entry to bring in more construction labourers and assistants (TEER 5 level).

Cautionary Items
CHBA will of course continue to engage with government on all of the above, and on items that could prove problematic, including:

Adopting forthcoming changes to the National Building Code
Provinces and territories can only access the New Canada Housing Infrastructure Fund if they adopt forthcoming changes to the National Building Code to support more accessible, affordable, and climate-friendly housing options.

Commentary: This is the government’s push to include more climate change elements (e.g. embodied carbon, climate resiliency) and accessibility elements in the code, all of which, if not done properly, can increase the cost of housing. CHBA continues to engage on many fronts in these areas. At the same time, CHBA commends the intention in the Federal Housing Plan to make changes to the National Building Code to build homes smarter, faster and at prices Canadians can afford. CHBA has long called for housing affordability to be a core objective of the building code, which, through increased stringency without cost-effective solutions, has been driving up the cost of housing for years. To that end, CHBA will continue to caution that efforts to drive more climate-change and accessibility measures into the code, if not done strategically, will continue to drive up the cost of construction. Smart approaches will be required to find cost-effective solutions to these and other measures being considered or already being integrated into the code – looking at code changes through an affordability lens will be essential.

Taxing Vacant Lands to Incentivize Construction
Budget 2024 announces that the government will consider introducing a new tax on residentially zoned vacant land. The government will launch consultations later this year based on a concern that some landowners in Canada may be sitting on developable land, hoping to profit from rising land values when the land could instead be used for immediate residential development.

Commentary: The issue of land banking continues to come up in discussions with some officials and this will be a challenge but also an opportunity to potentially educate policy makers. The measure is certainly of potential concern depending on how it is done, and CHBA will be actively engaged in the upcoming consultations on this front to make sure a proper approach is taken so that any such action won’t instead increase the cost of land development and housing development.

Next Steps
After Deputy Prime Minister and Finance Minister Chrystia Freeland tables Budget 2024 in the House of Commons and delivers her budget speech, all parties will have an opportunity to participate in debate of the document. Following debate, the government will introduce a budget implementation bill which will go through further debate and votes. If the government loses the budget vote – which is considered a matter of confidence – the government could fall, and an election called. However, with the Liberal Party’s Supply and Confidence Agreement with the NDP, it is unlikely that this will happen.