On 7 April 2022, Canada’s Minister of Finance tabled Canada’s 2022 Federal Budget. It included important commitments for climate change, dental care, Indigenous Peoples and Ukraine. Additionally, it included measures requiring financial institutions to assist with Canada’s post-COVID recovery effort. But it also had a very strong housing focus.
Here are 10 things to know.
1. The budget introduced a Multigenerational Home Renovation Tax Credit. This will provide up to $7,500 to support the construction of a secondary suite for a relative of the homeowner—typically a senior or an adult with a disability. Specifically, it will allow families “to claim 15 per cent of up to $50,000 in eligible renovation and construction costs incurred in order to construct a secondary suite.”
2. The budget introduced the Tax-Free First Home Savings Account. It will give first-time home buyers the ability to save up to $40,000. Like an RRSP, contributions will be tax-deductible, and withdrawals to purchase a first home will also be non-taxable. In the words of the budget document: “Tax-free in, tax-free out.”
3. The budget announced $1.5 billion over two years for the Rapid Housing Initiative. This initiative, introduced during the pandemic, provides support for up-front housing costs. It supports new modular housing, the acquisition of land, and the conversion of existing buildings into affordable housing. Its deep per-unit subsidy levels have allowed it to be effective at creating housing for persons experiencing chronic (i.e., long-term) homelessness.
4. The budget announced changes to both the National Housing Co-Investment Fund and the Rental Construction Financing Initiative (RCFI). It pledges to make the Co-Investment fund “more flexible and easier to access, including with more generous contributions and faster approvals.” The budget announced that the RCFI would now encourage the creation of more energy-efficient units, as well as units with lower rent levels than previously.
5. Two ‘green buildings’ initiatives were announced. First, $150 million over five years, was announced for Natural Resources Canada “to develop the Canada Green Buildings Strategy. The strategy will incentivize building code reform to accelerate the adoption and implementation of performance-based national building codes and promote the use of lower carbon construction materials. Second, $200 million over five years was announced for Natural Resources Canada to create the Deep Retrofit Accelerator Initiative, which will support deep retrofits, including for housing that supports low-income households.
6. Rent-to-own initiatives were announced. The budget announced “$200 million in dedicated support under the existing Affordable Housing Innovation Fund. This will include $100 million to support non-profits, co-ops, developers, and rent-to-own companies building new rent-to-own units….Examples of eligible projects…could include the repair and renewal of housing for rent- to-own purposes, innovative financing models, and programming that assists rent-to-own participants in preparing for homeownership.”
7. Housing-focused funding commitment were announced for Indigenous peoples. The budget announced “$4 billion over seven years, starting in 2022-23, to Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada to accelerate work in closing Indigenous housing gaps…” This includes: $2.4 billion over five years to support First Nations housing on reserves; $565 million over five years to support housing in First Nations Self-Governing and Modern Treaty Holders communities; $845 million over seven years to support housing in Inuit communities; and $190 million over seven years for housing in Métis communities.
8. The budget announced the doubling of the Home Accessibility Tax Credit. It announced the doubling of “the qualifying expense limit of the Home Accessibility Tax Credit to $20,000 for the 2022 and subsequent tax years. This will mean a tax credit of up to $3,000—an increase from the previous tax credit of up to $1,500—for important accessibility renovations or alterations.” This supports the following types of renovations: the purchase and installation of wheelchair ramps, walk-in bathtubs, and wheel-in showers; the widening of doorways and hallways; the building of a bedroom or bathroom to permit first-floor occupancy; and the installation of non-slip flooring.
9. Annual federal funding for homelessness has roughly doubled since Trudeau became Prime Minister. The budget announces $562.2 million over two years, beginning in 2024-25, for Reaching Home (the Government of Canada’s main funding vehicle for homelessness). When Trudeau came to power in 2015, annual funding for this initiative was just $119 million. Reaching Home’s base funding for 2022-23 (not including COVID-related funding) is $241 million. That means that, in nominal terms, annual federal homelessness funding has more than doubled since Trudeau first took office—and that’s not counting important COVID-related funding for homelessness.
10. An assortment of other measures are worth noting. For example: $4 billion was re-announced for the Housing Accelerator Fund (which Steve Pomeroy has previously written about here); $500 million will be reallocated from the National Housing Co-Investment Fund “to launch a new Co-operative Housing Development Program aimed at expanding co-op housing in Canada;” $1 billion in loans have been reallocated from the RCFI to co-op housing; $150 million in new funding over two years will “support affordable housing and related infrastructure in the North;” there will be $500 one-time payments to low-income tenants, worth $475 million in 2022-23 (details to follow); the value of the First Time Home Buyers’ Tax Credit will double from $750 to $1,500; new funding was announced for veterans’ homelessness ($62.2 million over three years, beginning in 2024-25) for a new Veteran Homelessness Program “that will provide services and rent supplements to veterans experiencing homelessness…;” and funding was announced for homelessness research ($18.1 million over three years for research on chronic homelessness).
In sum. Two factors may have induced the Government of Canada to include so many housing-related measures in this year’s budget—namely, Canada’s hot housing market, and the Liberal deal with the NDP. Nevertheless, the budget contains many initiatives that will improve housing affordability for some households.
La version française de ce billet se trouve ici.
I wish to thank George Fallis, Steve Pomeroy, Shayne Ramsay, Sylvia Regnier, Tim Richter, Vincent St-Martin, Alex Tétreault and one anonymous reviewer for assistance with this blog post.