Standing Committee on Public Accounts (PACP) Department of Finance Appearance on the Public Accounts of Canada 2024

Housing Affordability

Key points

• Public Accounts do not delineate federal spending by theme (e.g., housing).
• CMHC is the primary federal delivery mechanism for housing investments, making it the most reliable source for summarizing housing-related spending.
• $5.43 billion was spent in 2023-24 under CMHC programs.
  • Assistance for housing needs: $2.88 billion
  • Financing for housing: $1.35  billion
  • Housing expertise and capacity development: $1.19 billion
• This includes the following programs that seek to grow housing supply across the housing continuum and provide affordability support to households: the $4 billion Canada Housing Benefit (cost-shared with PTs), the $55 billion Apartment Construction Loan Program, and $15 billion Affordable Housing Fund.   

Blueprint for a Renters' Bill of Rights

Reference to measure in FES

• Text reference: We're also protecting renters with a new Blueprint for a Renters' Bill of Rights to encourage provinces and territories to crack down on excessive rent increases and renovictions, and make previous rent prices transparently available.

Prior announcement

• Budget 2024 proposed "a new Canadian Renters' Bill of Rights, to be developed and implemented in partnership with provinces and territories, to protect renters from unfair practices, make leases simpler, and increase price transparency. The government intends to crack down on renovictions, introduce a nationwide standard lease agreement, and require landlords to disclose historical rent prices of apartments".
• Budget 2024 also announced, under the new Canada Housing Infrastructure Fund (intended to accelerate the construction and upgrading of housing-enabling water, wastewater, stormwater, and solid waste infrastructure that will directly enable new housing supply), "$5 billion for agreements with provinces and territories to support long-term priorities. Provinces and territories can only access this funding if they commit to key actions that increase housing supply:" including implementing "measures from the forthcoming […] Renters' Bill of Rights".

Background

• Applications for renovation and personal use evictions are increasing (e.g., "own use" eviction requests went up 77% in Toronto between 2022 and 2023 according to Ontario's Landlord and Tenant Board). Tenant groups allege that in some cases these types of evictions are used to circumvent rent controls, which typically only limit how much rent can be increased for an existing tenant, but not a new one.
• Many tenants – typically low-income – are eligible for some legal advice and information services via their province's legal services organizations (with financial support from the Department of Justice) for major issues such as evictions, as well as lack of urgent repairs.
• Following the Budget 2024 announcements, Housing, Infrastructure and Communities Canada published a Blueprint for a Renters' Bill of Rights in September 2024.
• The Blueprint acknowledges the challenges renters face (e.g., erosion of protections against unfair rental practices, like renovictions or landlord failure to maintain safe and habitable units), sets out a policy approach for fair and well-functioning renting systems (based on principles of ensuring safe and affordable homes for everyone, fairness, transparency, and non-discrimination), and notes that federal, provincial and territorial governments share a responsibility to fulfill the right to adequate housing.
• In the Blueprint, the Government of Canada calls on provincial and territorial governments and all actors involved in the renting system to take various measures to address renters' challenges and support the Blueprint's principles (e.g., establishing mechanisms to protect against rental market instability, such as rental assistance programs, rent banks, and protections against excessive rent increases).
• Housing, Infrastructure and Communities Canada should be able to provide additional details.

Q&A

Isn't tenancy and renting under provincial jurisdiction?

• Every province and territory has legislation pertaining to and regulating tenancy, including establishing rules around rent, evictions, and recourse mechanisms. These laws vary from province to province.
• Under the "A New Canada Housing Infrastructure Fund", Budget 2024 proposes $5 billion for agreements with provinces and territories to support long-term infrastructure priorities. Provinces and territories can only access this funding if they commit to key action that increases housing supply, which would include implementing measures from the Renters' Bill of Rights.

Adding Secondary Suites to Single Family Homes

Measure and funding announced

• The 2024 Fall Economic Statement proposes that the government will double the amount of loans it plans to provide to successful applicants under the Secondary Suite Loan Program to $80,000, which will be administered by the Canada Mortgage and Housing Corporation.
• Combined with a 15-year loan term at an interest rate of 2 per cent, the government is making it cheaper for homeowners to add secondary suites to their homes.

Prior funding

• Budget 2024 provided $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 (Chapter 1, page 57).

Background

• Canada's Housing Plan and Budget 2024 announced the creation of a Secondary Suite Loan Program, which would provide up to $40,000 in low-interest loans to add secondary suites to their homes.
• Following consultations on program design, the government decided to increase the program's loan amount to $80,000, with a loan term of 15 years, and an interest rate of 2 per cent. 

Questions and answers

When will the program launch and what are the eligibility criteria? 

• The program is expected to launch in the coming months. Further details on eligibility will be made available through CMHC later this year.

If the program's loan capacity is doubling, why is the cost not doubling?

• This is a new program. The government decided to increase the loan value for the program. It would be premature to provide additional funding as demand is unknown.

Why is the government provisioning less for the program than it did previously?

• Much of the funding provided previously to the program is being moved to outer years to facilitate larger loan amounts and 15-year loan terms. These amounts are not reflected in the FES.

Accelerating Funding to Build Faster

Measure and funding announced

• The 2024 Fall Economic Statement announces that the government is accelerating $2 billion in low-cost financing, under the Apartment Construction Loan Program, to build up to 4,000 homes faster.  

Prior funding

• First announced in Budget 2016 as the Rental Construction Financing Initiative and following the provision of new funding through Budgets 2017, 2018, 2019, and the 2020 and 2023 Fall Economic Statements and Budget 2024, the Apartment Construction Loan Program is providing $55 billion in low-cost loans, representing $3.8 billion accrual, over 15 years, starting in 2017-18, to support the construction of more than 131,000 rental housing units. 

Background

• The Apartment Construction Loan Program provides low-cost loans to boost the construction of rental housing (units of 5 or more). The program does not provide contributions.
  • Eligible borrowers include for-profit developers, non-profit developers, municipalities and provinces. 
  • Of the total $55 billion allocated to the program, over $20 billion has been committed, which has supported the creation of over 53,000 units. 
• Budget 2024 announced Canada Builds, the federal government's intention to leverage the Apartment Construction Loan Program by making it available to support other levels of government launch their own ambitious housing plans, similar to the announced BC Builds initiative, for which $2 billion was committed.
• The 2024 Fall Economic Statement showcases recent changes made to the Apartment Construction Loan Program to make it easier for builders, including
  •  Extending loan terms;
  • Extending access to financing to housing projects for students and seniors;
  • Introducing a portfolio approach so builders can move forward on multiple projects at once;
  • Providing additional flexibility on affordability, energy efficiency, and accessibility requirements; and
  • Launching a new frequent builder stream to fast-track the application process for proven home builders.
• The 2024 Fall Economic Statement indicates that CMHC is considering new ways to make it easier for builder to access financing, informed by recommendations of key housing stakeholders. 

Questions and answers

What other reforms is CMHC considering making to the ACLP?

• Refer to CMHC.

More Financing for Affordable Housing

Measure and funding announced

• The 2024 Fall Economic Statement proposes to provide $50 million over two years, starting in 2025-26, through the Affordable Housing Fund for affordable housing providers to use for pre-development work. This funding would be sourced from existing departmental resources.
• The 2024 Fall Economic Statement notes the government's aim, through the Rapid Housing Stream of the Affordable Housing Fund, to scale up projects similar to Dunn House in Toronto.

Prior funding

• First announced in Budget 2017 as the National Housing Co-Investment Fund, the Affordable Housing Fund has a total funding envelope of $15 billion over ten years, starting in 2018-19.
  • This funding includes $1 billion announced in Budget 2024 (Chapter 1, page 77) for a new Rapid Housing stream specifically designed to support deeply affordable housing projects.

Background

• The Affordable Housing Fund provides low-cost and forgivable loans/contributions for the construction and revitalization of mixed-income, mixed-tenure, and mixed-use affordable housing to deliver 60,000 new housing units and repair or renew 240,000 housing units.
  • Of the $15 billion program budget, CMHC has committed $10.34 billion to support the creation of 40,501 new units (25,688 under 80% median market rent) and the repair/renewal of 166,889 units (131,559 under 80% median market rent). Of the $10.34 billion, $6.41 billion are loans and $3.92 billion are contributions/forgivable loans. (Source: CMHC, as of September 2024)
• Eligible applicants include community housing providers, municipalities, provinces and territories, Indigenous governments and organizations, and private developers. 
• The Rapid Housing Stream of the Affordable Housing Fund supports the construction of low cost-rental housing and single-room occupancy units – specifically, shelters, transitional and supportive housing projects. (Source: CMHC).
• The Rapid Housing stream launched in Fall 2024 and provides additional contribution funding to housing providers and developers.
• CMHC has an existing Seed Funding program which provides contributions and interest-free loans for pre-development costs (Source: CMHC). Due to overwhelming demand, the Seed Funding contribution budget for 2024 has been fully allocated. Applications for interest-free loans continue to be accepted.
  • Proponents apply for up to $350,000 in interest-free loans and a maximum of $150,000 of non-repayable contributions to assist with early development expenses.
  • These expenses can include things like the formulation of a business plan, creation of preliminary design concepts and conducting environmental site assessments.

Dunn House

• In October 2024, the City of Toronto launched Dunn House, Canada's first social medicine supportive housing initiative. This groundbreaking model integrates housing with health care and was made possible by a $14 million investment from the Government of Canada's Rapid Housing Initiative (Source: CMHC)
• Located in Toronto's Parkdale neighbourhood, the new four-storey modular housing building includes 51 new rent-geared-to-income and supportive homes for people experiencing homelessness who are also University Health Network (UHN) patients with high volumes of emergency department visits and in-patient admissions.
• Through the Social Medicine Initiative, UHN and Fred Victor (social service charitable organization in Toronto) will work with the City's shelter and street outreach teams to identify individuals who are unhoused and are frequently admitted to the hospital through the UHN emergency departments. Tenants at Dunn House will have access to a range of health and social services to be delivered onsite and will also be connected to primary care and other health services within UHN's Parkdale campus. 
• Future tenants of Dunn House will pay no more than 30  per cent of their income or the shelter allowance of their social assistance on rent.

Questions and answers

Is this investment topping up the existing Seed Funding program or will this create a separate program specific to pre-development costs for projects eligible for the Affordable Housing Fund? Will eligible expenses be the same as those under CMHC's existing program?

• The Fall Economic Statement announces that $50 million from within the Affordable Housing Fund will be made available to support pre-development costs for projects eligible under the Fund. This would supplement CMHC's existing programming. Specific eligible expenses will be announced in due course by CMHC.

Supporting Women and their Children Fleeing Violence

Measure and funding announced

• The 2024 Fall Economic Statement announces that $50 million from the Affordable Housing Fund's Rapid Housing Stream will be accelerated in 2025-26 to build more women's shelter spaces. This will help ensure the safety and security of vulnerable women, and their children. This funding would be sourced from existing departmental resources.

Prior funding

• First announced in Budget 2017 as the National Housing Co-Investment Fund, the Affordable Housing Fund has a total funding envelope of $15 billion over ten years, starting in 2018-19.
• This funding includes $250 million announced in Budget 2021 (Chapter 6, page 195) for the Women and Children Shelter and Transitional Housing Initiative which was estimated to fund the construction, repair, and operating costs of 560 transitional homes and shelter spaces for women and children fleeing violence. Capital funding expired in 2022-23. The program's annual subsidy component will end no later than 2030-31 for supported proponents.

Background

• Part of the National Housing Strategy, the Affordable Housing Fund provides low-cost and forgivable loans/contributions for the construction and revitalization of mixed-income, mixed-tenure, and mixed-use affordable housing to deliver 60,000 new housing units and repair or renew 240,000 housing units.
• The Strategy overall has a goal of 33 per cent of its investments, with a minimum of 25 per cent, being put towards serving the unique needs of women and their children (Source: Serving Women and their Children through the National Housing Strategy | CMHC).
• As of September 30, 2024, the NHS has committed an estimated $14.86 billion towards meeting the housing needs of women and their children, which includes funding for the construction, repair and support of 285,536 housing units.
  • Of the $14.86 billion, at least $2.31 billion is targeting the needs of women and their children,
    • These are projects and units that are specifically funded to appropriately house women and their children or women living alone.
  • and at least $12.54 billion is supporting the needs of women and their children.
    • This includes funding for projects and units with features that are considered desirable to women, based on engagement sessions held in 2019. Features include: security features, on-site support services such as childhood education services, etc.
  • This represents 29 per cent of all NHS funding committed.
• Through this support the National Housing Strategy has committed funding to create 3,366 new homes for survivors of gender-based violence (includes shelter and transitional homes); and the repair of 1,971 more. This is primarily through:
  • 2,193 new homes (including 1,461 shelter spaces or transitional housing units) and 1,971 repaired homes through the Affordable Housing Fund.
  • 1,043 new homes through the Rapid Housing Initiative.

Questions and answers

Is this investment creating a separate program or sub-stream specific to women's shelters?

• At this time, the Rapid Housing Stream supports the construction of shelters, transitional and supportive housing for those in greatest need.
• Today's announcement commits that at least $50 million in 2025-26 will be used to support the renovation, acquisition, and building of women's shelters.

Supporting Non-Profit and Co-Op Housing Residents

Measure and funding announced

• The 2024 Fall Economic Statement proposes to provide $362.7 million, starting in 2028-29, to extend the Federal Community Housing Initiative for another five years.

Prior funding

• Budgets 2016 and 2017 provided $500 million over 10 years to renew operating agreements with community housing providers whose agreements expired or would have expired between April 1, 2016, and March 31, 2028 (FCHI-1).
• Budget 2021 provided $118.2 million over seven years to extend the FCHI to community housing providers whose agreements expired prior to April 1, 2016 (FCHI-2).  

Background

• The Federal Community Housing Initiative (FCHI) is a $618.2 million fund to support federally administered community housing projects reaching the end of their operating agreements from past social and affordable housing programs. The program has two funding streams:
  • Rental Assistance: The rental assistance stream provides financial assistance for low-income households. Housing providers may apply for this rental support, which aims to fund the gap between 30% of an assisted household's gross monthly income and the occupancy charge.
  • Transitional Funding: The transitional funding stream is available to housing providers having trouble transitioning to the new program. The temporary funding covers eligible operating costs for up to 24 months following the expiration of past federal agreements. This funding stream has a limited budget and is reserved for the most vulnerable groups, such as deep subsidy projects or urban Indigenous projects. Transitional funding is provided alongside the rental assistance stream as a separate, additional form of assistance.
• Budget 2024 introduced flexibilities to the Federal Community Housing Initiative to ensure that eligible housing providers can access funding to maintain housing affordability for low-income tenants and co-op members.

Questions and answers

Will more housing providers become eligible?

• The proposed measure does not change the program's eligibility requirements.