Canadian Government Finalizes Deals With Cities to Help Accelerate Home Building

Canada Housing Minister Sean Fraser announced that the federal government has finalized and signed 179 housing deals via the $4 billion (CAD) housing accelerator fund, The Canadian Press reported (3-4-24). The program has “led to the largest up-zoning movement in Canadian history,” the government said.

Ottawa says the competitive process for funding resulted in 544 applications, but only one-third of them was successful. The agreements, which run until 2026–27, are expected to help fast-track 107,000 permits within the next three years and build more than 750,000 homes over the next ten years. “We’ve allowed communities to advance local solutions in exchange for federal investments,” Fraser said in an interview with The Canadian Press.

Experts often point out Canada’s housing shortage is caused in part by excessive red tape, slow permitting processes, and high development fees at the municipal level. According to the Canadian Home Builders’ Association, average municipal approval timelines for housing projects in 2022 spanned from three months to nearly three years, depending on the city.

The housing accelerator fund offers communities federal dollars in exchange for changes to bylaws and regulations that would boost home construction. Although the specifics of the agreements vary, Fraser says he’s managed to secure significant changes from cities, including the digitalization of the permitting process and an end to exclusionary housing (zoning that limits what you can develop on specific land).

Under the agreements, municipalities receive 25% of their funds upon signing and 25% each year thereafter, provided they reach specified milestones.

Pierre Poilievre, the Conservative Leader, has also suggested that the solution to the Canadian housing crisis requires the federal government to push cities to be more development-friendly. However, he said the current $4-billion fund is funneling money to the same “gatekeepers” contributing to the current bottleneck.