Crown corporation delivers affordable units amid rising rates and labor shortages
Canada's national housing agency said it managed to surpass its affordable housing targets last year despite elevated interest rates and persistent labour shortages.
In its annual report released Monday, Canada Mortgage and Housing Corporation (CMHC) revealed it delivered a total of 494,319 new, repaired or assisted housing units in 2023 through its various programs. That exceeded the agency's overall target of 350,000 units for the year.
"Rising interest rates to tame inflation and labour shortages hindered the country's ability to create much needed housing supply," said Michel Tremblay, CMHC's acting president and CEO. "Yet, even in these challenging times, we met our ambitious goals for 2023."
CMHC also facilitated 153,708 affordable housing units specifically – outpacing the 120,000 unit goal set under the National Housing Strategy (NHS), the country's 10-year, multi-billion dollar plan launched in 2017 to improve housing affordability.
“In 2023, we saw an unprecedented demand for our multi-unit mortgage loan insurance, and we stepped up to meet this demand,” CMHC said. “We also delivered expanded funding for purpose-built rentals through Canada Mortgage Bonds, guaranteeing an additional $5 billion after the Government of Canada raised the annual limit for Canada Mortgage Bonds from $40 billion to up to $60 billion.
“This will help get more rental apartments built, which may further increase the growth in our multi-unit volumes helping to boost supply, improve vacancy rates and ultimately make renting more affordable for Canadians.”
"On the commercial side, our mortgage loan insurance and securitization products are vitally important in these uncertain economic times, helping to stabilize the housing finance system and incentivize more supply," added Nadine Leblanc, CMHC's interim chief financial officer and senior vice president of policy.
Financial performance dips
While hitting its affordable housing marks, CMHC's overall financial performance took a hit amid the economic volatility. Total income before taxes fell 9% from 2022 levels to $1.31 billion, due primarily to a $210 million increase in net losses on financial instruments.
Despite this, the agency still managed to declare dividends of $1.08 billion back to the government using its net income and retained earnings. Total insurance-in-force hit $414 billion by year-end, up $15 billion annually.
More homes still needed
CMHC reiterated Canada still faces a shortage of 3.5 million homes beyond current projections to restore full affordability.
Additionally, with elevated interest rates and persistent labour shortages, new home construction fell short at 241,735 units, down from over 270,000 annually in 2021-2022.
Read more: CMHC reveals housing market outlook for 2024
To address this, CMHC plans to implement new initiatives, including collaborating with the housing industry to create a catalogue of homes to speed up construction.
“Canada’s housing challenges are serious, complex and urgent, but they are solvable,” Tremblay said.
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