There’s almost $8 billion in Budget 2021 for housing, while this may seem like a huge figure, consider that those resources are for the national housing picture, and keep in mind that overall spending in budget 2021 is over $509 billion. 2021 revenue is at $355 billion. In just two years (2020 and 2021), our federal government borrowed $500 billion. All of this is real money that will have to be paid back, forgiven, printed, or inflated at some point, but that’s another story. As for housing, let’s go back to that $8 billion figure.
Over $2.5 billion will be allocated to the Canada Mortgage and Housing Corporation over seven years, to pay for a number of housing programs. These programs include the Rapid Housing Initiative, the Affordable Housing Innovation Fund, the Canada Housing Benefit and the Federal Community Housing Initiative. Many of these programs were announced months or even years ago, so much of this money will likely be recycled, re-announced, or is simply going to be pushed back and extended over a number of years. Keep in mind that not every dollar of this $2.5 billion will be new.
$1.3 billion will go to build and fix up units and buildings and will see commercial spaces converted into housing – again, not all of this is net new money, much of it has already been announced or deployed. The big chunk of the cash will go to build affordable housing, with over $3.8 billion announced. The feds say that this money will help build, repair and support 35,000 affordable housing units. That comes to about $110,000 per unit, and we’re not sure what kind of housing $110,000 will get you, but let’s see.
As we mentioned in our latest newsletter, a 1% tax on the value of vacant properties will be potentially implemented by 2022, but this will only generate some $700 million. It is unlikely that a 1% vacancy tax will have much of an impact on the national real estate market. Overall, this is not a budget focused on housing. It’s a budget focused on COVID-19 support, child care, and sprinkling money to key electoral groups (families, seniors, parents). Compare this budget to some of the very aggressive and macro measures the New Zealand government has implemented to deal with their supply crisis, and you’ll get the picture.