Unlocking housing affordability: 15 federal programs poised to reshape Canada's real estate landscape

4 federal government initiatives aimed at helping housing affordability

Here are four federal government iniatives, announced or rolled out in 2024, aimed at helping housing affordability.

#1. 30-year mortgage amortization for new builds

First-time homebuyers of new builds can now access 30-year mortgage amortizations, allowing for lower monthly payments and helping more young Canadians enter the housing market. This measure is part of a broader effort to restore generational fairness in housing, as announced in the Federal Budget 2024.

• Announced: June 11, 2024
• Start Date: August 1, 2024
• Who it helps: Homebuyers
  
  

#2. Investments in Canada Mortgage and Housing Corporation (CMHC)

The Canada Mortgage and Housing Corporation (CMHC) is Canada's national housing agency, focused on making mortgage loans more affordable. A key part of the 2024 Action Plan is increasing the CMHC's annual financing limit by raising the issuance limit of the Canada Mortgage Bond (CMB) from $40 billion to $60 billion per year. This increase helps financial institutions provide more affordable loans by insuring mortgage loans on multi-unit rental projects like apartments, student housing and senior residences. CMB bonds are issued through Canada Housing Trust No. 1 (CHT) and sold to investors globally. The proceeds are used to purchase insured eligible residential loans through the National Housing Act Mortgage-Backed Securities Program. This increase will enable CMHC to support up to 30,000 additional rental apartments each year, making more financing available for rental housing providers.

• Announced: December 12, 2023
• Start Date: TBD
• Who it helps: Homebuyers
  
  

#3. Introduction of the Canadian Mortgage Charter

Introduced as part of the 2023 Fall Economic Statement, the Canadian Mortgage Charter outlines how banks and other financial institutions should assist Canadian homeowners, particularly those facing financial challenges due to rising mortgage rates. It serves as a guiding framework so that homeowners can access relief when necessary and get information in a timely manner. Some of the measures include not charging interest on interest in the event that mortgage relief measures results in a temporary period of negative amortization; allowing temporary extensions of the amortization period; waiving fees and costs charged for mortgage relief measures; and contacting homeowners in advance of their mortgage renewal to inform them of their options.

• Announced: Fall 2023
• Start Date: 2024
• Who it helps: Homeowners
  
  

#4. Removal of the mortgage stress test requirement for insured mortgage holders

The federal government removed the mortgage stress test requirement for homeowners who chose to switch lenders when renewing their insured mortgage. This change allows insured mortgage holders to requalify at their original contract rate, rather than the higher mortgage stress test rate, when switching lenders at renewal. This makes it easier for homeowners to shop around for better rates without facing additional qualification hurdles.​

• Announced: Budget 2024
• Start Date: August 1, 2024
• Who it helps: Homeowners
  
  

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5 federal government initiatives to increase housing supply

Here are five federal government iniatives, announced or rolled out in 2024, aimed at helping with housing affordability by increasing housing supply.

#1. Public Lands for Homes Plan

This program focuses on converting surplus federal properties into housing developments. The aim is to leverage every public site and use it for affordable housing construction.

• Announced: June 11, 2024
• Start Date: Rolling out in 2024
• Who it helps: Developers
  
  

#2. Fast-tracking the building process

The Housing Accelerator Fund (HAF) is a $4 billion federal initiative aimed at fast-tracking the construction of at least 100,000 new homes across Canada by providing incentive funding to local governments. The funding can be used for projects in four main areas: affordable housing, housing-related infrastructure, community infrastructure supporting housing and HAF Action Plans.

Local governments responsible for land use planning were eligible to apply for funding between March and August 2023, with different application streams for urban and rural areas. Nine cities, including London, Calgary and Halifax, have already secured HAF agreements, which will contribute to the building of over 21,000 homes within the next three years. More agreements are expected, with the federal government anticipating it will exceed its goal of 100,000 homes, as evidenced by a $1.8 billion agreement with Quebec.

Each municipality develops its own action plan for using HAF funding, allocating it to initiatives like affordable housing projects or infrastructure improvements. For example, Hamilton applied for $123 million and was granted $93.5 million, which it plans to distribute among affordable housing development, infrastructure and other housing-related projects.

• Announced: December 12, 2023
• Start Date: 2023 (in progress)
• Who it helps: Developers
  
  

#3. Support for the Canada Infrastructure Bank

A program launched through the Canada Infrastructure Bank will aim to support the needs of communities seeking to develop the infrastructure required to build more homes.

• Announced: 2023
• Start Date: Rolling out in 2024
• Who it helps: Developers and municipalities
  
  

#4. Support for the development of Indigenous housing strategies

The strategy will be developed with Indigenous partners and launched in 2024, and aims to complement the three existing distinction-based housing strategies: First Nations Housing and Related Infrastructure Strategy, the Inuit Nunangat Housing Strategy and the Métis Nation Housing Sub Accord.

• Announced: 2023
• Start Date: 2024
• Who it helps: Indigenous communities
  
  

#5. Increasing labour to build homes

The federal government will work to remove barriers to international labour mobility, with the construction sector one of the key areas of focus. For instance, in May 2023, a new selection process was implemented under the Express Entry immigration system that prioritized permanent residency applicants with specific skills and work experience in the construction sector. Removing barriers will also help with the interprovincial movement of tradespeople and construction workers allowing skilled workers to find work in different parts of the country.

• Announced: 2023
• Start Date: 2023
• Who it helps: Developers
  
  

6 federal government initiatives to help increase rental housing supply

Here are six federal government iniatives, announced or rolled out in 2024, with an aim to help with rental housing costs by increasing rental unit supply.

#1. Mortgage refinancing for secondary suite program

The Canadian federal government has introduced new mortgage financing rules aimed at helping homeowners add secondary suites to their properties, addressing the country’s tight housing market. Effective January 15, 2025, homeowners can refinance up to 90% of their property’s value, including any value added through the creation of new rental units like basement apartments or laneway homes. These changes are designed to promote "gentle density" by encouraging the development of additional housing units while providing homeowners with opportunities to increase their property value and generate rental income.

• Announced: October 8, 2024
• Start Date: January 25, 2025
• Who it helps: Homeowners
  
  

#2. Canada Builds Initiative

A new approach combining federal low-cost loans with investments from provinces and territories to accelerate the construction of affordable homes across the country. This initiative targets underutilized lands and is intended to rapidly scale up rental housing for middle-class Canadians.

• Announced: June 11, 2024
• Start Date: Rolling out in 2024
• Who it helps: Developers
  
  

#3. Apartment Construction Loan Program

An additional $15 billion was allocated to this program, which provides low-interest loans to developers to build rental apartments. The goal is to create at least 30,000 new rental units.

• Announced: June 11, 2024
• Start Date: New funding starting in 2025-2026
• Who it helps: Developers
  
  

#4. Removal of GST on new rental and co-op housing

The federal government removed the Goods and Services Tax (GST) on new rental housing projects, such as apartments, student housing and seniors’ residences. The goal is to incentivize developers to build purpose-built rental projects by removing a significant cost associated with new projects. This incentive applies to projects started by the end of 2030 and completed by 2036.

• Announced: December 12, 2023
• Start Date: September 14, 2023 (ends in 2030)
• Who it helps: Developers
  
  

#5. Increased funding to the Apartment Construction Loan program

The Apartment Construction Loan Program is set to receive $15 billion in new funding starting in 2025-2026 as part of a revamp of the existing Rental Construction Financing Initiative. (Originally launched as the Rental Construction Financing Initiative (RCFI) in 2017.) This latest funding promise brings the total funding for this program up to $40 billion. The program aims to provide low-cost loans to developers for residential projects that meet specific affordability, energy efficiency and accessibility criteria. The program supports both for-profit and nonprofit developers, as well as municipalities, with loans of at least $1 million. Priority is given to projects involving partnerships with Urban Aboriginal Groups or municipalities. Borrowers can access up to 100% financing for residential construction and 75% for non-residential projects. The loans have a fixed interest rate for a 10-year term, and payments are interest-only until the project stabilizes​.

• Announced: December 12, 2023
• Start Date: Funding starts in 2025-2026
• Who it helps: Developers
  
  

#6. Local restrictions on short-term rentals + enforcement of these restrictions

The federal government will deny income tax deductions for expenses incurred to earn short-term rental income — including interest expenses — for short-term rental businesses in municipalities that have prohibited short-term rentals. Deductions will also be denied in cities where short-term rentals are permitted if the taxpayer has not complied with provincial or municipal licensing, permitting or registration requirements. Plus, $50 million will be allocated over three years starting in 2024, to support municipal enforcement of restrictions on short-term rentals.

• Announced: 2023
• Start Date: January 1, 2024
• Who it helps: Renters
  
  

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Bottom line

These measures aim to help housing affordability by addressing supply challenges, reducing construction barriers and encouraging innovation in the housing sector.

While not all programs are focused on the individual homeowner — with many targeting municipalities, distinct groups or developers — the overall aim of these programs is to make housing more accessible and give families some breathing room when it comes to finding an affordable place to live.