OTTAWA — The Carney government’s signature housing agency will make only a small dent in the country’s needs, even as the government cuts other affordable housing funds by more than half, Canada’s Parliamentary Budget officer argues in a new report.
The new agency, Build Canada Homes, is central to the government’s housing strategy, with plans to build social housing on government land relying largely on modular construction that can be completed more quickly than by traditional methods.
But in a report issued Tuesday, interim Parliamentary Budget Officer Jason Jacques found the roughly $7.1 billion the government has allocated for that purpose won’t be enough to significantly move the needle.
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“We anticipate that the contribution of Build Canada Homes will likely be modest and estimate that the program will add about 26,000 units over five years, representing a 2.1 per cent increase in housing completions relative to our baseline projection,” the report said.
The PBO took the amount of money the government has set aside for building housing and divided it by the previous construction cost per unit to come up with the 26,000-unit figure.
Housing Minister Gregor Robertson said the PBO is only looking at the federal dollars available, while the government intends to use those dollars to attract other investments. He said the government is also hoping to lower the cost of every house built by relying on modular builds.
“It’s not based on attracting a lot of investment from provinces, from the private sector, and making sure that we’re modernizing the industry and delivering more homes per dollar,” Robertson said. “We’re doing factory-built housing that’s cheaper. We can build faster, we can get more value for Canadian dollars.”
Mike Moffatt, a housing expert and founding director of the Missing Middle Initiative, said the government has been vague about its plans for Build Canada Homes. So far, he said, the agency doesn’t have a target for the number of new homes or how quickly they should be built, so the PBO’s numbers are fair.
“There are no accountability measures. There are no key performance indicators,” said Moffatt. “There is no way for Canadians to know what they’re getting in return for that money.”
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Moffatt said the government has talked about attracting provincial or municipal dollars for housing, but there is no indication provinces are on board with the plan yet, so that funding stream can’t be counted on.
“If I’m coming up with my household budget, I’m going to leave out winning the lottery,” he said.
In addition to its $7.1 billion in funding, the government has also suggested Build Canada Homes will use loans to get more housing built.
Robertson said the agency is just beginning to do its work, and is being designed to build projects with partners.
“There’s not enough capital coming to invest in affordable housing, so we’re looking at crowding in investment from other levels of government and private sector and scaling up the work for affordable housing,” he said.
The PBO also flagged a number of programs that are set to expire in the coming years, including programs to build on-reserve housing, programs targeting homelessness directly and the government’s Housing Accelerator Fund, which provides incentives for municipalities to build more housing and cut red tape.
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The report points out annual housing spending will drop from $9.8 billion next year to $4.3 billion in 20-2029 if those programs expire as scheduled. Finance Minister François-Philippe Champagne said it is too soon to say what will happen with those programs.
“You don’t take decisions for 2029 in 2025. You work with what you have today, and we’ve done historical investment in the country,” Champagne said.
Moffatt said he doesn’t think the government is likely to spend less on housing in the current environment, but given that it hasn’t been transparent about its future plans, the PBO’s current analysis is accurate.
“There are a number of programs that are expiring and we simply don’t know what comes next,” he said.
Conservative housing critic Scott Aitchison said the report is evidence that the Carney government is adding to bureaucracy rather than increasing housing starts.
“The Liberal ‘Ottawa knows best’ approach is what got Canada into the housing crisis; today’s report confirms Liberals will never get us out of it,” Aitchison said in a written statement.
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