Carney unveils signature housing plan he says will double pace of home building in Canada

Liberal Leader Mark Carney unveiled his signature housing policy Monday, promising to double the number of homes built annually in Canada to nearly 500,000.

“My new Liberal government is flipping the script on housing with a new approach to build faster, build smarter and to build more affordably,” Carney said during a campaign stop in Vaughan, Ont. 

“We’re going to unleash the power of public/private co-operation at a scale not seen in generations,” he added.

To get that done, a Carney-led Liberal government says it would create an entity called Build Canada Homes (BCH) that would act as a developer overseeing the construction of affordable housing in Canada. 

Describing BCH as a “lean, mission-driven organization,” Carney said it will provide tens of billions in financing for new affordable housing projects across the country. 

Carney explained that BCH will be a stand-alone entity, rather than being placed under the stewardship of the Canada Mortgage and Housing Corporation (CMHC), because big organizations “work better if they have a sole purpose.”

To get affordable home building started, BCH will supply $25 billion in debt financing and $1 billion in equity financing to “innovative Canadian prefabricated home builders.”

A Liberal party backgrounder explained that BCH will also issue bulk orders of housing units from Canadian modular and prefabricated home builders in order “to create sustained demand.”

‘Deeply affordable’ housing 

Under Carney’s plan, BCH will also provide $10 billion in low-cost financing and capital that it will then funnel into different affordable home building streams. 

Initially, $4 billion of the $10 billion will be directed into long-term, fixed-rate financing for affordable homes. The other $6 billion will be earmarked for quickly building “deeply affordable housing, supportive housing, Indigenous housing and shelters.”

About $2 billion of that $6-billion “deeply affordable” housing money will be used to help build housing for students and seniors, in partnership with the provinces and territories. 

“We will immediately develop homelessness reduction targets with every province and territory to inform housing-first investments, improve access to treatment and end encampments community by community,” the Carney campaign said in a statement. 

Watch | Carney says Liberal plan would help boost construction to 500,000 new homes a year:

Carney says Liberal plan would help boost construction to 500,000 new homes a year

Liberal Leader Mark Carney announced if elected prime minister his government would get back in the business of building homes to ‘double the pace’ of construction to half-a-million new builds per year.

Carney’s housing plan also includes a number of proposals that he says will make the existing housing market work better.

The first of those proposals is a promise to cut municipal development charges in half for a period of five years by helping cities make up the cost of that lost revenue. The proposal, Carney said, would reduce the cost of a two-bedroom apartment in Toronto by $40,000. 

A future Liberal government is also pledging to reduce the tax liability for owners of existing structures when they sell their properties to a developer that converts those buildings into affordable housing. 

The Liberals are also planning to bring back a tax incentive that was introduced in 1974 and ended in 1981 called the Multiple Unit Rental Building (MURB) cost allowance.

The MURB scheme allowed investors to claim depreciation and certain other costs of an apartment building against unrelated income. It was credited with encouraging the construction of about 195,000 units at a cost of $2.4 billion in forgone taxes, although the CMHC said there are some questions about the program’s true influence.

Carney said he would also boost the Housing Accelerator Fund, pledging to speed up approval timelines and publicly report on its progress. 

The Housing Accelerator Fund, first announced during the 2021 election campaign and introduced in the 2022 federal budget, allocates $4 billion in funding until 2026-27 to prompt more home building in cities.

Its objective is to build 100,000 more housing units across the country than what would have been built without the fund by streamlining land-use planning and development approvals.

Carney said when the Second World War ended, Canada faced a housing crisis with not enough homes for returning troops, but the country overcame that challenge by getting into the home building business. He said it’s time to do that again. 

“The Liberal government of William Lyon Mackenzie King had a plan, they created new agencies to oversee the construction of homes,” Carney said. “They found a way to cut costs and cut the time to build.

“They built, in the process, entirely new industries and it worked,” he added. “Canada built its way out of that crisis into postwar economic strength…. We solved a housing crisis before in our past, we can solve the housing crisis now.”   

Carney previously pledged to remove the GST on the purchase of a home at or under $1 million for first-time buyers. 

The Conservative housing plan

Conservative Leader Pierre Poilievre announced last week that a future Conservative government would eliminate the GST on homes worth $1.3 million or less. 

In the fall of 2023, Poilievre introduced his own housing plan that he said would “build homes not bureaucracy.”

Under his proposals, cities would have to increase the number of homes built by 15 per cent each year. If they fail to meet that target, those municipalities would see their federal grants withheld at a commensurate rate.

A city that increases the number of homes built by only 10 per cent in a given year would see five per cent of its federal funding withheld or clawed back.

If municipalities build more than the 15 per cent target, they would get a “building bonus” under Poilievre’s plan.

The Conservative program is not unlike the Housing Accelerator Fund, except the Liberal fund does not withhold money from municipalities that are slow to approve housing.

Poilievre’s plan also calls for withholding bonuses from CMHC staff if they fail to quickly approve financing for projects. 

Jagmeet Singh and the NDP’s housing proposals

Speaking at a campaign stop outside a Toronto apartment complex Friday, NDP Leader Jagmeet Singh pledged to ban large corporate landlords from buying up affordable homes.

The plan is similar to a bill the NDP proposed last year that would have restricted such sales to individuals, non-profits, municipalities, agencies and co-ops.

Singh also said an NDP government would stop financial supports, such as low-interest federal loans and mortgage loan insurance, for corporate landlords who gouge tenants.

The NDP is also promising more money for the Rental Protection Fund — a federal program that supports community housing projects.