The federal government is set to reduce spending on housing programs by more than half in the next four years, as revealed in a recent report by the parliamentary budget officer (PBO). The report focuses on the impact of Prime Minister Mark Carney’s new housing agency, Build Canada Homes, and other initiatives on the construction of new homes until 2029-30.
According to the PBO report, the $13 billion allocated to housing initiatives will lead to the construction of approximately 26,000 new homes, marking a significant decrease in funding from $9.8 billion in 2025-26 to $4.3 billion annually by 2028-29, a 56% drop. This funding decline is primarily attributed to the expiration of programs like the Housing Accelerator Fund, the Affordable Housing Fund, and Canada Housing Benefit.
The report anticipates reductions or expiration of funding across various government agencies over the next four years. For instance, Crown-Indigenous Relations and Northern Affairs Canada’s housing spending will decrease from $550 million to $350 million by 2028-29. Similarly, the Canada Mortgage and Housing Corporation’s funding is expected to drop from $6.16 billion to $2.16 billion during the same period.
While the report highlights the decline in funding, government officials have emphasized that decisions regarding these programs may change before 2028-29. Finance Minister François-Philippe Champagne stated that future decisions are yet to be made, indicating a possibility of extensions or additional funding for these initiatives.
In response to the housing gap in Canada, Mark Carney introduced Build Canada Homes during the election campaign, aiming to address the construction of 690,000 new housing units by 2035. The agency, launched with an initial investment of $13 billion, is expected to allocate $7.3 billion towards grants, loan concessions, and community support, with the remaining $5.7 billion allocated for financing programs.
Despite the allocated funding, the PBO report suggests that Build Canada Homes’ contribution will be modest, resulting in the construction of only 26,000 new units over the next five years, including 13,000 affordable homes for low-income households. Housing Minister Gregor Robertson expressed optimism about the government’s housing policy attracting private investment, emphasizing the potential for significant affordable housing delivery through collaboration with investors across Canada.