Is the 2018 Federal Budget the cure for affordable housing in Canada?

While the number of Canadians looking for affordable housing continues to grow, the supply of housing has not translated to keeping up with demand. The 2018 Federal Budget that was tabled on February 27 aims to help Canadians find affordable housing, among other things such as advancing reconciliation efforts with indigenous peoples, promoting gender equality and to overall creating a stronger middle class.

A high demand and low supply in housing mean it can be difficult for low-income families, young professionals and single-parent households to find affordable housing.

Vacancy rates in cities like Toronto and Vancouver remain low at 1.0% and 0.9%, respectively. These low vacancy rates allow property owners to raise their prices to meet the demand of their market. Toronto’s average cost of a 2 bedroom apartment in 2016 was $1,341, while a 2 bedroom in a smaller market like Winnipeg was $1,068 in 2016, a 25.56% difference in price. Winnipeg’s vacancy rate was 3% in 2016 meaning the demand was lower which helped to create more supply and affordable housing in the market.

In order to combat the issue of supply and demand, the Canadian Government aims to invest $40 Billion over 10 years to Canada’s National Housing Strategy. The aim of this strategy is to remove 530,000 families from housing need, create 100,000+ new housing units, to reduce chronic homelessness by 50%, as well as a myriad of other initiatives.

The budget also saw $4.7 Billion over the next five years being invested into First Nations housing, health and to propelling their communities towards self-government.

Improving relations with First Nations peoples has been an important goal for the current Federal Government, since their election campaign. In his budget speech, Finance Minister Bill Morneau commented that “when it comes to renewing the relationship between Canada and Indigenous Peoples, we have a responsibility to do better, and to do more.”

$600 million will be invested over three years into on-reserve housing, $400 million over 10 years for housing in Inuit regions, and $500 million over 10 years for Métis people.

This is all well and good but the Budget seeks to do more than it is capable of. While the Federal Budget also aims for solid job growth, which means a bonus for the real estate sector, they may be underestimating the new stress test rules and changes to the insurance rules.

This will affect first-time homebuyers quite a bit, who are usually closer to the bottom of the economic ladder. They are the ones who may need to borrow money from their parents or get higher interest alternative loans (in some cases, full private mortgages)

With the creation of over 100,000 new housing units, repairs to 300,000 housing units, reducing chronic homelessness by up to 50% and to investing more in First Nations communities, it will be interesting to see if this budget will ultimately increase supply and meet the demands of the Canadian public in order to make housing more affordable.


This article is for entertainment purposes only and should not be construed as legal advice. If you have any questions with respect to the above information or any other legal matters, please reach out to me directly via email at or via telephone at 613-286-2169.

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