New financing will help build up to 30,000 more homes annually
The federal government has announced that will be unlocking another $20 billion in low-cost financing for the construction of rental housing across Canada.
Finance Minister Chrystia Freeland announced on September 26 that the funding will be coming from the increase in the annual limit for Canada mortgage bonds, from $40 billion to up to $60 billion.
“This change is the next step in the government’s plan to build more homes, faster, and will unlock low-cost financing for multi-unit rental construction,” the government said. “This new measure will help to build up to 30,000 more rental apartments per year.
Freeland assured that the funding will not affect any other item already budgeted for this year.
“There is no fiscal impact for the government of Canada as a result of this measure,” Freeland told The Canadian Press. “This is fiscally responsible policy using policy tools at our disposal. This is a further measure in our broader and continuing campaign to build more homes for Canadians faster.”
The Canadian federal government has introduced Bill C-56, the Affordable Housing and Groceries Act, as part of its efforts to boost housing supply and stabilize grocery prices.
— Canadian Mortgage Professional Magazine (@CMPmagazine) September 25, 2023
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Feds introducing new raft of housing-focused measures
The announcement came in the wake of Bill C-56, the Affordable Housing and Groceries Act, which will be removing the GST on new rental housing construction across the country.
“This enhancement increases the GST Rental Rebate from 36% to 100% and removes the existing GST Rental Rebate phase-out thresholds, for new rental housing projects,” the federal government said last week. “For a two-bedroom rental unit valued at $500,000, the enhanced GST Rental Rebate would deliver $25,000 in tax relief.”
The feds said that the aim of this new legislation would be to incentivize the construction of more apartment buildings, student housing, and senior residences.
“Our message to builders today is that it's time to get shovels in the ground,” said Housing Minister Sean Fraser. “We are going to leverage all the tools at our disposal to make it easier for you to say yes to build more homes for Canadians… We’re going to address the specific challenges at the root of the housing crisis we’re living through.”
