In an effort to address Canada’s ongoing housing crisis, the federal government announced a series of new initiatives designed to increase housing supply, particularly focusing on secondary suites, vacant land taxation, and the conversion of underused federal properties into affordable homes. These measures were revealed on Tuesday, October 9, 2024, by Deputy Prime Minister and Finance Minister Chrystia Freeland, alongside Public Services and Procurement Minister Jean-Yves Duclos.
Refinancing Opportunities for Homeowners to Add Secondary Suites
One of the key measures introduced is aimed at homeowners who want to convert underused spaces like basements or garages into rental suites. The new policy enables homeowners to refinance their mortgages, allowing them to borrow up to 90% of their home’s value, which includes the value of the newly constructed rental unit. This refinancing comes with the option to amortize the mortgage over a period of 30 years, making it easier for homeowners to afford the conversion and increase the housing supply.
To ensure that homeowners across all housing markets in Canada can benefit from this policy, the government has increased the mortgage insurance home price limit to $2 million for those refinancing to build secondary suites. This move is expected to encourage the development of more rental units in urban areas where housing prices are higher, and the demand for affordable rental options continues to grow.
“We must use every possible tool to build more homes and make housing affordable for every generation of Canadians,” said Deputy Prime Minister Freeland in a press release. The initiative is part of the broader efforts by the federal government to make housing more accessible and affordable, particularly for middle-class families struggling with the rising cost of living.
Consultations on Vacant Land Taxation to Incentivize Development
Another key measure announced is the launch of consultations on the taxation of vacant land. The federal government is seeking input from provinces, territories, and municipalities on how best to implement this measure, with the aim of discouraging land speculation and incentivizing the development of homes on vacant land. By taxing land that is sitting unused, the government hopes to motivate landowners to contribute to addressing the housing shortage by building homes on these properties.
This move is seen as critical in cities where land is available but has remained undeveloped, leading to missed opportunities for increasing housing stock. The taxation proposal would allow regions across the country to adapt the policy to their local contexts, ensuring flexibility while addressing a national issue.
Unlocking Federal Properties for Housing Development
In addition to the above measures, Minister Jean-Yves Duclos announced that 14 more underused federal properties have been added to the Canada Public Land Bank, bringing the total to 70. These properties, located in cities such as Ottawa, Quebec City, Cape Breton, and St. John’s, will be repurposed for the construction of affordable housing. This initiative is part of the federal government’s Public Lands for Homes Plan, an ambitious program aimed at unlocking public lands for housing development at an unprecedented pace.
According to Duclos, the initiative is part of an effort to tackle the lack of affordable housing, which has become out of reach for many Canadians. “We are delivering on our promise to continue to add more properties to the land bank and meet the deliverables outlined in Budget 2024 to support a new, ambitious Public Lands for Homes Plan. In doing so, we can build strong communities and more affordable housing across the country,” Duclos said in his statement.
The expansion of the Canada Public Land Bank is expected to provide cities with additional land resources that can be used to create housing, further helping to close the gap between housing demand and supply. By focusing on underutilized government properties, the initiative seeks to speed up housing development while ensuring these lands are put to better use.
Tackling the Housing Crisis
The housing crisis in Canada has been a pressing issue, with rising rents, high property prices, and limited availability creating a challenging environment for many Canadians, especially younger generations. The federal government’s newly announced measures are seen as an attempt to tackle these challenges head-on, by making it easier for homeowners to add rental units, encouraging the development of vacant land, and repurposing federal properties for affordable housing.
While these actions are promising, they come in the context of a broader debate over housing policy, with opposition parties pushing for further reforms. Prime Minister Justin Trudeau and opposition leader Pierre Poilievre sparred in the House of Commons over past housing policies, with Trudeau critiquing Poilievre’s track record as a former housing minister, and Poilievre blaming the government for rising housing costs.
These measures, though, signal a significant effort by the government to address the housing crisis and bring relief to Canadians grappling with the cost of living. With ongoing consultations and commitments to housing development, the federal government aims to create long-term solutions that will make housing more affordable and accessible for future generations.
As more details emerge, and consultations progress on the taxation of vacant land, these initiatives are expected to form a cornerstone of the federal government’s housing strategy moving forward. In the meantime, the focus on secondary suites, vacant land, and federal property redevelopment represents a proactive approach to alleviating the housing shortage across the country.