Affordable housing is big news these days, because everything’s become so darn expensive. But there’s very little the federal government can actually do to help alleviate the problem.
They can help Canadians save, which they’ve done with the first-time homebuyers savings tool. In the recent budget, they’ve also come up an Apartment Construction Loan program, which provides loans to developers and builders for construction of rental housing. A program that has been in effect since 2017, and has provided 48,000 new rental homes. Also in the 2024 budget, are measures formalizing halal (or interest-free) mortgages.
There are three big things the federal government can’t do. They can’t control interest-rates- that’s up to the Bank Of Canada, and the the major banks. They can’t dictate where, and when things get built; that’s up to the municipalities. And they can’t directly fund any projects themselves.
The last two are important distinctions because of jurisdiction. The responsibilities of each level of government are spelled out in sections 91-95 of the constitution. Municipalities are a construct of the province, and provincial governments. The provinces through legislation including the Municipal, and planning acts control the structure, and planning policies of the municipalities.
That brings me to a tweet from Housing, Infrastructure, and Communities Minister Sean Fraser. He says:
“Development charges increase the cost of homes for everyone. They are a housing tax. During a housing crisis, we don’t think you should raise taxes on housing. That’s why provinces and cities must raise the fees in order to get federal infrastructure funding. Conservatives have no plan to address these taxes.”- Sean Fraser, May 21 2024.
Development charges are not a tax. They’re a fee charged by municipalities to developers in order to help pay for growth-related infrastructure such as roads, transit, water/sewer infrastructure. They actually form part of a revenue stream for municipalities. Calling them taxes, and fees at once is disingenuous, and purposefully confuses for voters.
Development Charges are a provincial/municipal responsibility. That’s why the Conservative Party doesn’t have a plan for them. Fraser’s statement above is nothing more than cheap, distraction politics.