Spending on housing programs is set to decrease by more than half in the next four years, according to a new report from the parliamentary budget officer (PBO). The report highlights that the federal government’s $13-billion housing initiative, particularly Prime Minister Mark Carney’s Build Canada Homes agency, will result in the construction of only 26,000 new homes by 2029-30.
The PBO report indicates that the $9.8 billion allocated for housing initiatives in 2025-26 will dwindle to $4.3 billion annually by 2028-29, marking a 56% decline. This reduction in annual funding is primarily attributed to the expiration of funding for key programs like the Housing Accelerator Fund, the Affordable Housing Fund, and Canada Housing Benefit.
Additionally, cuts outlined in the budget, such as discontinuing the secondary suite loan initiative and other programs deemed unrelated to boosting housing supply or aiding Canadians in housing need, will further contribute to the decrease in funding, as per the PBO analysis.
The report forecasts that several funding envelopes for housing will either expire or diminish over the next four years. This includes reductions in spending from Crown-Indigenous Relations and Northern Affairs Canada, the Canada Mortgage and Housing Corporation, Housing, Infrastructure and Communities Canada, and Indigenous Services Canada.
Government officials have emphasized that assumptions about the termination of these programs may not necessarily hold true, as decisions on extending or topping up funding could be made before 2028-29, according to Finance Minister François-Philippe Champagne.
To address the housing gap in Canada, Carney introduced the Build Canada Homes initiative during the election campaign, with an initial investment of $13 billion. The report projects that Build Canada Homes will allocate $7.3 billion for grants, loan concessions, and community support for low-income rentals, while the remaining $5.7 billion will be directed towards financing programs.
The PBO report underscores that Build Canada Homes is anticipated to make a limited contribution towards housing supply and affordability, resulting in the construction of approximately 26,000 new units over the next five years, including 13,000 affordable homes for low-income households.
Housing Minister Gregor Robertson expressed satisfaction with the PBO’s scrutiny of housing matters but cautioned that the report may not fully consider the impact of the government’s housing policy on private investment in homebuilding. Robertson highlighted the significant investments in housing-enabling infrastructure, totaling $51 billion, designed to attract private investment and emphasized that this is just the beginning of efforts to deliver affordable housing and leverage investments across Canada.