Trudeau announces $15B more for apartment construction loans

Trudeau announces B more for apartment construction loans

Prime Minister Justin Trudeau has announced a $15-billion top-up to the federal government’s Apartment Construction Loan Program (ACLP) and says the government plans to leverage the soon-to-be $55-billion program to encourage provincial and territorial partnerships to boost the number of rental units across Canada.

Trudeau’s “Canada Builds” announcement is the latest in a string of campaign-style announcements that are expected to continue until Finance Minister Chrystia Freeland tables Budget 2024 on April 16.

“Canada Builds is going to turbo-charge affordable apartment construction in partnership with provinces and territories,” Trudeau said Wednesday at a news conference in Toronto. “It will provide low-cost loans, help speed up development and build projects of the scale necessary to meet the urgent needs of Canadians.

“We’re going to make the entire pot of funding available for matching partnerships and territories that come to the table with ambitious and fair housing plans.”

WATCH | Trudeau says funds will flow to cities if provinces don’t back ‘ambitious’ housing plan

Trudeau says funds will flow to cities if provinces don’t back ‘ambitious’ housing plan

Prime Minister Justin Trudeau says he wants to work with provinces on housing — but if a province doesn’t step up ‘with ambition’ on needed infrastructure, Ottawa will work directly with municipalities who want to ramp up housing construction.

If provinces and territories want to access the federal financing, they will need to meet benchmarks set by a recent federal-B.C. partnership to build thousands of rental units.

Those benchmarks include committing to building on government, non-profit, community-owned and vacant lands and streamlining processes to cut development approval timelines to no longer than 12 to 18 months.

“Going forward, we’re going to be seeking to enter bilateral deals to meet the local priorities of provincial governments who agree to match us in the same manner that the Government of British Columbia did,” said Housing Minister Sean Fraser.

Asked Wednesday about provinces that have resisted partnering with the federal government on other housing initiatives, Trudeau said his government is prepared to continue bypassing provincial governments.

“Ideally, we’d work with all provinces if they’re sufficiently ambitious on housing. We’re there to be partners with them,” he said. “If a province decides it doesn’t want to be ambitious on housing, that’s their decision. We will work with the municipalities within that province that are ambitious.”

The new $6 billion Canada Housing Infrastructure Fund the Liberal government unveiled Tuesday includes $5 billion set aside for provinces and territories which agree to make certain commitments. If agreements can’t be reached with provinces and territories, the federal money will flow directly to municipalities instead.

Toronto Mayor Olivia Chow, who was present and spoke at Wednesday’s announcement, said the new Canada Builds initiative could lead to the construction of 17,000 new rental units in the city, housing 30,000 people.

“We have the sites … We have the ambition. We have a strong partnership with the federal government and together we can get housing in Toronto back on track,” said Chow.

The $15-billion top-up to the Apartment Construction Loan Program follows another $15-billion top-up announced in the federal government’s fall economic statement. With the new cash infusion, the program now aims to finance the construction of over 131,000 new rental units across Canada by 2031-32.

The government says that since its launch in 2017, ACLP has committed over $18 billion in loans to support the construction of more than 48,000 new rental units.

The federal government also intends to reform eligibility requirements for the ACLP by extending loan terms, extending access to financing to include housing for seniors, and including a portfolio approach to eligibility requirements, allowing builders to move forward on multiple sites at the same time.

In order for home builders to access the federal financing in the ACLP, proposed projects must have at least five rental units, have a loan size of at least $1 million and respond to a need for rental supply in the housing market.

The Canada Mortgage and Housing Corporation, which administers the ACLP loans, says that in many cases — in order to qualify — 20 per cent of a proposed project’s units must have rents below 30 per cent of the median total income for all families for the area, and the total residential rental income must be at least 10 per cent below its gross achievable residential income.

Responding to today’s announcement, NDP housing critic Jenny Kwan said Canadians can’t trust the government that created the housing crisis to fix it.

“Trudeau’s out-of-touch housing strategy is dominated by loans to for-profit developers that don’t help Canadians who need homes they can afford,” Kwan said in a statement provided to CBC News. “Today, the Liberals announced $15 billion for a program where 97 per cent of the units produced are not affordable.”

Prime Minister Justin Trudeau, alongside Housing Minister Sean Fraser (back right) and Toronto Mayor Olivia Chow (right), tours an under-construction condo tower in midtown Toronto, Wednesday, April 3, 2024.
Prime Minister Justin Trudeau, alongside Housing Minister Sean Fraser (back right) and Toronto Mayor Olivia Chow (right), tours an under-construction condo tower in midtown Toronto, Wednesday, April 3, 2024. (Cole Burston/The Canadian Press)

Kwan is referring to a 2022 report produced by the non-profit research organization Blueprint ADE for the National Housing Council, an advisory body to the minister of housing, infrastructure and communities.

That report estimated that only about 3 per cent of units financed by the the 2017-launched Rental Construction Financing Initiative (RCFI), which was renamed the Apartment Construction Loan Program in 2023, would be “both suitable for and affordable to low-income households.”

A 2023 report from the National Housing Council stated that while low-income households comprise the majority of those experiencing core housing need, the RCFI had produced almost no units that could help them.

“Canadians need more affordable homes built more quickly, but Liberals will find a way to disappoint Canadian families again,” said Kwan.

Conservative housing critic Scott Aitchison criticized Trudeau’s announcement as a photo op re-announcing a “failed loan program.”

“Justin Trudeau’s response has been to re-announce a failed loan program which has only resulted in the completion of 11,000 homes over the course of seven years and create more bureaucracy which will raise the cost of housing even more,” Aitchison said in a media statement.

“Trudeau’s photo ops won’t come anywhere close to building the 5.8 million homes that are needed to restore housing affordability for Canadians. Common sense Conservatives will fire the gatekeepers and remove the bureaucracy to build the homes Canadians can afford.”