TD Economics analysis reveals what's expected
The federal government is expected to maintain its focus on housing affordability in its 2024 budget by expanding existing initiatives, according to new analysis from TD Economics.
Affordability was a central issue in the previous Fall Economic Statement (FES), with the government promising that it will help support the construction of new housing.
As part of this commitment, the government introduced the Tax-Free First Home Savings Account and enhanced GST rebate on purpose-built rental properties.
For the 2024 budget, TD senior economists Francis Fong and James Orlando said the government won’t likely increase its spending on housing and will instead push for smaller initiatives.
The two pointed to rumours of the Canada Greener Homes Grant being extended. The program was established to incentivize Canadians to invest in green home renovations.
“While the past program was open to Canadians at all income levels, an updated program is expected to focus on helping lower income homeowners and renters,” they said. “If this policy is in the budget, it would help to address both housing affordability and the green transition.”
Fong and Orlando also noted that any new policy tackling housing affordability will likely focus on increasing supply rather than supporting demand.
They cited the government’s decision to slash its first-time homebuyer incentive program with CMHC due to low uptake.
Finance Minister Chrystia Freeland is expected to present the 2024 federal budget on April 16.
“Don’t expect Budget 2024 to be big in terms of new spending commitments, especially in light of Minister Freeland’s recent guidance around ‘creating the conditions’ for interest rates to fall,” said Fong and Orlando in their analysis. “Accordingly, we expect the government to direct any extra fiscal wiggle room towards a few high priority areas – addressing housing/affordability and setting the foundation for national pharmacare.”
What are your thoughts on this story? Feel free to comment below.
