Prime Minister Justin Trudeau on Tuesday detailed plans to spend $2 billion to create more affordable housing in Canada.
These expenditures include commitments made in the last two federal budgets.
Trudeau said part of that $2 billion would go towards creating 17,000 new homes in Canada, the majority of which would be affordable housing.
He also announced a new five-year rent-to-own stream under the Affordable Housing Innovation Fund, with applications open to developers wanting to use the model starting Tuesday. The 2022 federal budget allocated $200 million for a lease-to-own plan.
While Canada’s housing market has shown signs of slowing since the Bank of Canada began raising interest rates earlier this year, Trudeau acknowledged that soaring rents have been a hurdle for aspiring homeowners. .
“For many renters, it’s getting harder and harder to save to buy a home,” he said from Kitchener, Ont.
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New spending through the Housing Innovation Fund will also be used to build 10,800 homes to help close Canada’s supply gap, which economists have consistently identified as a barrier to affordability and home ownership in the country. Some 6,000 of those homes would be affordable housing, the government said.
No timeline has been given as to when these units will be completed. Arevig Afarian, a spokesperson for Housing Minister Ahmed Hussen’s office, told Global News that more information on the timing was expected by the end of this year.
Trudeau also announced on Tuesday as part of the two-year, $2 billion expansion of the federal government’s Rapid Housing Initiative (RHI), which is not yet open for applications.
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RHI’s third round was tapped for $1.5 billion in spending in the 2022 federal budget. In April, the federal government said the money would support the construction of 6,000 affordable housing units, although the announcement of Trudeau on Tuesday estimated 4,500 new constructions.
Afarian said the decline was due to rising construction costs caused by global inflation, as well as fluctuations in the housing market.
The RHI was launched in 2020 and has so far supported the construction of more than 10,000 units, according to federal government statistics, across two rounds of funding worth $2.5 billion.
The Liberals’ federal budget provided $10.1 billion in housing spending over five years.
Deputy Prime Minister Chrystia Freeland said earlier this month that Ottawa would take “additional steps if necessary” to improve housing affordability in Canada.
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