New report outlines what it would take to fully implement the National Housing Strategy
The National Housing Strategy, which is intended to significantly increase the supply of affordable housing across Canada, will cost the government more than $89 billion, according to a new report from the Parliamentary Budget Office.
This is significantly higher than the federal administration’s initial budget of $82 billion.
“Our analysis indicates that only a fraction of the $89 billion total investment in the NHS comes at a net fiscal cost to the federal government,” said Yves Giroux, parliamentary budget officer. “As well, a portion of the program funding announced to date is not new spending but part of spending for pre-existing programs in place prior to the NHS.”
In particular, the steady pace of growth in residential construction costs — which increased by 2.5% in Q3 2022 and then by 1% in the succeeding quarter — will be the most likely roadblock in NHS projects, the PBO said.
“While federal spending to provide affordable housing and address homelessness has increased, so too has the cost of residential construction, reducing the real purchasing power of federal spending,” Giroux added.
Moreover, “across specific programs, there is no standard definition of affordability,” the PBO stressed. “Certain definitions can lead to the construction of units presented as ‘affordable’, but which in reality may require households to devote more than 30 per cent of their income to housing.”
