Spending on housing programs is set to reduce by more than 50% in the next four years, as outlined in a recent report by the parliamentary budget officer (PBO). The report focuses on Prime Minister Mark Carney’s new housing agency, Build Canada Homes, and its role in constructing new homes until 2029-30.
According to the PBO, the federal government’s investment in housing initiatives will decrease from $9.8 billion in 2025-26 to $4.3 billion annually by 2028-29, marking a 56% decline. This funding cut is mainly attributed to the expiration of programs like the Housing Accelerator Fund, the Affordable Housing Fund, and Canada Housing Benefit.
Furthermore, cuts in the budget, such as the discontinuation of the secondary suite loan initiative and other programs not directly boosting housing supply or aiding Canadians in housing need, also contribute to the funding reduction, as per the PBO.
The report anticipates that several funding envelopes for housing will either expire or diminish over the next four years. These include reductions in spending from Crown-Indigenous Relations and Northern Affairs Canada, the Canada Mortgage and Housing Corporation, Housing, Infrastructure and Communities Canada, and Indigenous Services Canada.
Government officials have emphasized that assuming these programs will not be extended or supplemented due to their expiry dates may be premature. Finance Minister François-Philippe Champagne underlined that decisions for 2029 should not be made in 2025.
In a report released earlier, the PBO highlighted the need for Canada to construct 690,000 new housing units by 2035 to meet the country’s housing demands. To address this gap, Carney introduced Build Canada Homes during the election campaign, with an initial investment of $13 billion to facilitate housing construction in Canada.
According to the recent report, Build Canada Homes is expected to allocate $7.3 billion of the $13 billion towards grants, loan concessions, contributions to provincial programs, and community support for low-income rentals by 2029-30. The remaining $5.7 billion will be directed towards financing programs.
The PBO suggests that this allocation will lead to the construction of approximately 26,000 new units over the next five years, including 13,000 affordable homes for low-income households, equating to around 3.7% of the housing gap identified by the PBO in August.