Prime Minister Justin Trudeau detailed plans Tuesday to spend $2 billion to create more affordable housing across Canada.
That spending includes commitments made in the last two federal budgets.
Trudeau said part of that $2 billion would go towards the creation of 17,000 new homes in Canada, the majority of which would be affordable housing units.
He also announced a new five-year rent-to-own stream under the Affordable Housing Innovation Fund, applications for which are open to developers looking to use the model starting Tuesday. The 2022 federal budget allocated $200 million towards a rent-to-own plan.
While the Canadian housing market has shown signs of cooling since the Bank of Canada began raising interest rates earlier this year, Trudeau acknowledged that soaring rents have been a barrier for aspiring homeowners.
“For a lot of renters, saving to buy a home is increasingly difficult,” he said from Kitchener, Ont.
New spending via the housing innovation fund will also go towards building 10,800 housing units to help address Canada’s supply gap, which economists have regularly identified as a barrier to affordability and home ownership in the country. Some 6,000 of those units would be affordable units, the government said.
No timeline was given on when those units would be completed. Arevig Afarian, a spokesperson for Housing Minister Ahmed Hussen’s office, told Global News more information on timing was expected by the end of this year.
Trudeau also announced Tuesday as part of the $2 billion a two-year expansion to the federal government’s Rapid Housing Initiative (RHI), which is not yet open for applications.
The third round of RHI was tapped for $1.5 billion in spending in the 2022 federal budget. In April, the feds said that money would support the construction of 6,000 affordable units, though Trudeau’s announcement Tuesday estimated 4,500 new builds.
Afarian said the decrease was due to increased construction costs caused by global inflation, as well as the fluctuating housing market.
The RHI launched in 2020 and has so far supported the construction of more than 10,000 units, according to the federal government’s statistics, across two rounds of funding worth $2.5 billion.
The Liberals’ federal budget set aside $10.1 billion in spending over five years aimed at housing.
Deputy Prime Minister Chrystia Freeland said earlier this month that Ottawa will take “additional action if necessary” to improve housing affordability in Canada.
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