New mortgage rules took effect on August 1, allowing 30-year insured mortgage amortizations for first-time homebuyers purchasing newly built homes. On September 16, the Minister of Finance announced a broader suite of reforms to make homeownership more affordable for Canadians, particularly younger generations. These reforms target the rising cost of mortgage payments, which has become a significant barrier to homeownership, especially for Millennials and Gen Z.
In an email interview with Irum Khan, the Department of Housing, Infrastructure, and Communities Canada (HICC) acknowledges the multidimensional crisis in the housing industry and outlines the measures to make housing more affordable.
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To increase the housing sector’s capability, the Ministry of Housing, Infrastructure, and Communities has formulated a three-pronged strategy [viz., (a) constructing additional residences, (b) streamlining the rental and ownership processes and (c) assisting Canadians who are unable to purchase a home]. Could you provide some information about these efforts?
In 2017, the Federal Government stepped back into a leadership role in housing with the launch of the National Housing Strategy. With Solving the Housing Crisis: the Canada Housing Plan, the Government of Canada is redoubling its efforts to solve the housing crisis for all Canadians. Working with partners in all Government orders and sectors, we are building on our historic investments to date and changing how we build homes in this country.
The Government announced the Canada Housing Plan in April 2024 to chart a path to ensure there is a place every Canadian can call home. It will:
Build more homes by bringing down homebuilding costs, helping cities make it easier to build houses rapidly, changing how Canadian homebuilders manufacture homes and growing the workforce to get the job done.
Make it more convenient to own or rent a home by ensuring that every renter or homeowner has a home that suits their needs and the stability to retain it.
- Help Canadians who cannot afford a home by building more affordable housing for students, seniors, persons with disabilities and equity-deserving communities, and eliminating chronic homelessness in Canada through its strategy titled Reaching Home: the Canada Homelessness Strategy.
From the upcoming housing design catalogue to the $55-billion Apartment Construction Loan Program, the Government is setting out a wide-ranging policy agenda to help solve the housing crisis and help everyone in Canada access the safe and affordable housing they need. We are calling on provinces, territories, and all other stakeholders involved in home renting or buying to take actions that match our efforts to help everyone in Canada access the safe and affordable housing they need. For more information on the programs that the Federal Government is implementing to carry out these objectives, we invite you to consult the Housing, Infrastructure and Communities web page.
These efforts build on this Government’s historic progress through the National Housing Strategy, administered by the Canada Mortgage and Housing Corporation (CMHC). Since 2015, the Government of Canada has invested over $54 billion to help 1.8 million Canadians get the housing they need. It has supported the creation of over 149,000 new housing units and the renovation of over 288,000 homes. Over 154,000 families have received direct support with the cost of rent through the Canada Housing Benefit. Moreover, the housing needs of over 540,000 households have been reduced or eliminated.
Through the Housing Accelerator Fund (HAF), the Federal Government is delivering a $4.4-billion agreement-based initiative that funds cities directly in exchange for commitments to change zoning and cut red tape to help homebuilders build more housing more quickly. By helping to eliminate barriers to housing construction, the HAF will fast-track nearly 112,000 new homes over the next three years and spur the construction of more than 750,000 homes over the next decade.
2. The pandemic has completely altered housing problems in Canada. Bad credit scores, rising expenses and capacity constraints influence people’s purchasing power. For a large population, credit scores have been negatively affected by COVID-19. Those with good salaries cannot buy homes because of low credit scores. Are these concerns being examined as well?
Canadians work hard to be able to afford a home. However, the high cost of mortgage payments is a barrier to homeownership, especially for Millennials and Gen Z. To help more Canadians, particularly younger generations, buy a first home, new mortgage rules came into effect on August 1, 2024, allowing 30-year insured mortgage amortizations for first-time homebuyers purchasing new builds. On September 16, 2024, the Minister of Finance announced a suite of reforms to mortgage rules to make mortgages more affordable for Canadians and put homeownership within reach.
Meanwhile, under Canada’s Housing Plan, the Government of Canada’s priority is fairness and transparency in home buying by providing Federal regulatory oversight of banks and insurers and enhancing financial literacy and consumer awareness related to home buying – especially mortgages. The blueprints for the Renters’ Bill of Rights and the Home Buyers’ Bill of Rights, which the Government released on September 16, 2024, lay down these principles clearly to help ensure a level playing field for Canadians who are renting a home or looking to enter the housing market themselves.
With the passing of Bill C-69, the Budget Implementation Act, 2024, the Financial Consumer Agency of Canada (FCAC) officially assumes the responsibility of overseeing, administering and enforcing Canada’s Consumer-Driven Banking Framework. Budget 2024 also called on banks, fintech firms, and credit bureaus to launch tools to let renters report their rent payment history, strengthen their credit scores, and unlock more pathways to homeownership.
3.The housing supply in cities like Toronto, Vancouver, and Calgary is depleting. What immediate problems do small towns and northern regions face due to this?
The need to supply more and a variety of housing is an issue for all communities in all regions of Canada. CMHC’s Housing Market Information Portal provides measures for new home construction and rental markets in all centres with a population greater than 10,000. These provide local officials with the data and information they need to make informed decisions regarding their housing markets.
CMHC also produces an annual Northern Housing Report, which looks at the housing markets and housing issues in Yukon, Northwest Territories and Nunavut, especially in the three northern capital cities of Whitehorse, Yellowknife and Iqaluit.
4.In the upcoming years, which cities do you fear might experience capacity issues?
The Canada Mortgage and Housing Corporation (CMHC) regularly monitors both national and local housing markets through Housing Market Outlooks, Market Outlooks, Rental Market Reports, and Housing Supply Reports. The CMHC is currently undertaking more detailed research on the effects of migration within Canada on housing markets and expects to release an update on this research in the coming months.
5.There are several segments of the Canadian population, including Indigenous peoples, racialized communities, immigrants, seniors, people with disabilities, people escaping gender-based violence, and residents of rural and remote areas. There are also people of diverse economic backgrounds. The ministry recognizes that they have a variety of needs. Many people believe the housing crisis, which has existed for decades, has a history of discrimination and marginalization. What guarantees does the ministry intend to provide to underprivileged communities if housing remains a prolonged struggle for the country’s middle class?
The affordability crisis in Canada requires a broad-based response from all stakeholders – the Federal Government, provincial, municipal, and Indigenous Governments, and the private and non-profit sectors must all work together to restore affordability and fair access to housing for all Canadians.
The National Housing Strategy formulated programs to prioritize Canada’s most vulnerable, including low-income families, and the CMHC has allocated billions of dollars to create and repair affordable housing for vulnerable Canadians through NHS programs like the Rapid Housing Initiative (RHI) and the Affordable Housing Fund (AHF). Through the RHI, for example, the CMHC has committed to support the creation of over 15,500 new affordable units. As of June 30, 2024, across all programs, the National Housing Strategy has committed over $14 billion towards meeting the housing needs of women and their children, including funding for the construction, repair, and support of over 267,000 housing units.
Now, with Canada’s Housing Plan, we are taking further steps to support marginalized people’s diverse needs – and their access to safe and secure housing that meets these needs.
While most rules and regulations related to renting or home-buying remain under provincial and territorial jurisdiction, this Government is committed to playing a leadership role in ensuring that our housing efforts work for everyone in Canada, regardless of their circumstances.
Demonstrating this leadership role, the Federal Government, on September 16, 2024, released the blueprints for a Renters’ Bill of Rights and Home Buyers’ Bill of Rights. Part of the Government’s commitment as part of Canada’s Housing Plan to improve housing access and affordability, these Blueprints set out principles for fair and well-functioning systems for home renting and buying. They include calls to action on measures that will improve fairness and transparency and address the challenges faced by Canadians when renting or buying a home. Addressing inequality and discrimination is an underlying principle of the blueprints, which mandate that housing providers ensure accessible homes – addressing the specific needs of disadvantaged and marginalized groups – and that they account for the expression of cultural identity as needed.
The Government of Canada calls on provinces and territories and all other actors involved in renting or buying homes to take actions that will uphold the principles in the Blueprints and make renting and buying homes fair and well-functioning throughout Canada.
