$72.5 billion national housing strategy fails at promised impact: PBO report

0
343
pbo housing report

Subscribe to the OCN Daily Newsletter!

Receive a free update of the latest Ontario Construction News each morning

The federal government’s $72.5-billion 10-year national housing strategy is not having the impact it promised when rolled out in 2017, Canada’s budget officer says.

In fact, Parliament Budget Officer Yves Giroux says in a new report that “we project that in the absence of additional spending, the number of households in housing need would have increased to approximately 1.8 million households” by 2025.

While the Liberal government has increased spending by 50 per cent — $1.2 billion per year — over the 10-year historical average, he points to factors that “have likely limited the impact” of the strategy over its first three years.

Funding for low-income households is set at “only $192 million per year,” a 15 per cent decline in the “real purchasing power of federal spending,” said Giroux.

Yves Giroux
Yves Giroux

“This caused a 183,019 (42 per cent) reduction in the number of low-income community housing units supported under bilateral agreements between 2015 and the baseline established by new bilateral agreements,” he said.

Giroux says CMHC’s capital contribution programs have faced implementation delays, with less than half the funding over the first three years allocated to two key initiatives: the National Housing Co-Investment Fund and the Rental Construction Financing Initiative.

He says several factors have likely limited the impact of Canada’s National Housing Strategy on housing need over its first three years:

  • Despite the increase in overall spending, funding for CMHC’s assistance for housing need programs intended to help low-income households increased only by $192 million per year (9 per cent) in nominal terms, which represents a 15% decline in the real purchasing power of federal spending.
  • A significant portion of the community housing supported under CMHC’s bilateral agreements with provinces reached the end of their operating agreements. This caused a 183,019 (42 per cent) reduction in the number of low-income community housing units supported under bilateral agreements between 2015 and the baseline established by CMHC’s new bilateral agreements. Table E-1 Federal Program Spending on Housing Affordability in 2021
  • CMHC’s capital contribution programs have faced implementation delays. Over the first three years of Canada’s National Housing Strategy, CMHC spent less than half the funding allocated for two key initiatives, the National Housing Co-Investment Fund and Rental Construction Financing Initiative.

“Finally, we project that in the absence of additional spending the number of households in housing need would have increased to approximately 1.8 million households with a $9.3 billion aggregate affordability gap by 2025-26,” Giroux wrote in his report.

“Over the period of 2021 to 2025, incremental CMHC spending averages 16% of the projected affordability gap and about $63/month per household in housing need.”

LEAVE A REPLY

Please enter your comment!
Please enter your name here

I accept the Privacy Policy

This site uses Akismet to reduce spam. Learn how your comment data is processed.