A recent report by the Parliamentary Budget Officer (PBO) reveals that government spending on housing programs is set to decrease by more than half in the next four years. The report highlights that the federal government’s flagship housing initiative, Build Canada Homes, will only result in the construction of approximately 26,000 new homes by 2029-30.
The PBO report focuses on the impact of Build Canada Homes and other programs on the construction of new homes in the coming years. It indicates that the government’s housing expenditures will drop from $9.8 billion in 2025-26 to $4.3 billion annually by 2028-29, representing a 56% decrease. This funding reduction is primarily attributed to the expiration of financial support for programs like the Housing Accelerator Fund, the Affordable Housing Fund, and the Canada Housing Benefit.
The report predicts that several housing funding envelopes will either shrink or expire by 2028-29. For instance, Crown-Indigenous Relations and Northern Affairs Canada’s housing spending will decrease from $550 million to $350 million, while the Canada Mortgage and Housing Corporation’s allocation will drop from $6.16 billion to $2.16 billion. Additionally, funding for Housing, Infrastructure and Communities Canada is expected to decline to zero by 2028-29, and Indigenous Services Canada’s housing budget will reduce from $1.36 billion to $310 million.
Government officials have stressed that the expiry dates of these housing programs do not necessarily mean they will not be extended or augmented in the future. Finance Minister François-Philippe Champagne emphasized that decisions regarding housing funding beyond 2025 will be made at a later date.
In response to the PBO report, Housing Minister Gregor Robertson highlighted the government’s commitment to addressing the housing gap. He mentioned that the initial investment of $13 billion in Build Canada Homes is just the beginning, with an additional $51 billion earmarked for housing-related infrastructure to attract private investment. Robertson expressed confidence in the government’s ability to deliver affordable housing and leverage investments from various sources across the country.
The PBO report underscores the modest impact Build Canada Homes is expected to have on housing supply and affordability, estimating the construction of 26,000 new units over the next five years. This includes 13,000 affordable homes for low-income households, representing about 3.7% of the housing gap identified in a previous PBO report.
Overall, the government remains optimistic about its housing initiatives and the potential for public-private partnerships to address the housing shortage in Canada.