Canada's National Housing Strategy: Progress, Challenges, and the Road Ahead
September 20, 2024
By Allwyn Dsouza, Senior Analyst, Research and Insights, REIC/ICI
By Allwyn Dsouza, Senior Analyst, Research and Insights, REIC/ICI
Launched in 2017, Canada’s National Housing Strategy (NHS) is a 10-year initiative that initially aimed to invest $72 billion to address the country’s housing crisis. Today, that budget has expanded to $115 billion which reflects the growing scope and ambition of the program. The NHS is designed to tackle key housing challenges through a combination of new housing construction, repair of existing homes, and affordability initiatives. Its ambitious targets include building 240,000 new homes, repairing 300,000 existing units, and reducing chronic homelessness by 50% by 2028. While considerable progress has been made, considerable work remains to fully meet these goals.
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Many NHS initiatives are progressing as planned and some are even ahead of schedule. However, provincial mandates have struggled to consistently meet the targets, underscoring the need for stronger intergovernmental coordination and enhanced funding strategies. This analysis evaluates the status of both existing and newly introduced NHS initiatives.
Evolving Scope of the National Housing Strategy
Since its inception, the NHS has continuously broadened its scope, launching new, targeted programs in response to evolving housing challenges. The government has prioritized feedback, adapting its approach to include funding and financing initiatives that address a wide range of housing needs—from affordable homeownership to emergency shelters for vulnerable populations.
This evolution is reflected in the strategy’s ability to adapt to significant disruptions, such as the COVID-19 pandemic, while navigating the complexities of managing multiple stakeholders, including federal, provincial, and municipal governments. The NHS remains a dynamic framework with a clear focus on providing long-term solutions for Canada's housing needs.
Evolving Scope of the National Housing Strategy
Since its inception, the NHS has continuously broadened its scope, launching new, targeted programs in response to evolving housing challenges. The government has prioritized feedback, adapting its approach to include funding and financing initiatives that address a wide range of housing needs—from affordable homeownership to emergency shelters for vulnerable populations.
This evolution is reflected in the strategy’s ability to adapt to significant disruptions, such as the COVID-19 pandemic, while navigating the complexities of managing multiple stakeholders, including federal, provincial, and municipal governments. The NHS remains a dynamic framework with a clear focus on providing long-term solutions for Canada's housing needs.
Table 1.0 Timeline of Initiatives
Source: placetocallhome.ca
These announcements mark a strategic shift in the government’s focus from primarily demand-side measures (such as support for first-time buyers) to more impactful supply-side measures. This pivot is essential as demand-side approaches have often buoyed property prices without sufficiently addressing underlying housing supply issues.
Key focus areas of NHS spending and progress till date
The NHS prioritizes investments in new construction, modernizing housing supply, and fostering partnerships with local governments to increase housing stock. Notably, the NHS has emphasized social housing as a core area of focus, reflecting a consultative process involving multiple stakeholders. The engagement of civil society in policy development has been a crucial factor in identifying key challenges early and formulating targeted responses to address systemic imbalances.
Key focus areas of NHS spending and progress till date
The NHS prioritizes investments in new construction, modernizing housing supply, and fostering partnerships with local governments to increase housing stock. Notably, the NHS has emphasized social housing as a core area of focus, reflecting a consultative process involving multiple stakeholders. The engagement of civil society in policy development has been a crucial factor in identifying key challenges early and formulating targeted responses to address systemic imbalances.
Figure 1.0
Source: placetocallhome.ca
While governments are frequently criticized for weak implementation, the NHS has been an exception in many respects. Despite a delayed start in fully recognizing the depth of the housing crisis, the program has remained largely on track in meeting several of its core goals. By Q2 2024, the NHS had committed $54.28 billion through federal initiatives, facilitating the creation of 149,650 new units and the repair of 288,183 housing units.
Source : placetocallhome.ca
While there has been notable progress, the slower-than-expected pace of new housing construction remains a significant hurdle. The construction process has been hampered by lengthy planning, permitting delays, and challenges in coordination with provincial and local governments. Labour shortages and rising material costs have further exacerbated these delays. Addressing these issues requires closer collaboration with provincial and local governments to streamline approval processes and accelerate project timelines.
Though the federal government provides funding and strategic direction, housing is constitutionally the responsibility of the provinces. As federal entities increasingly assert control over housing policy, the role of the provinces—both in terms of political accountability and policy leadership—must remain central to achieving national housing goals.
Other concerning aspects in recent years are the decline in both commitments and expenditure. Ensuring that the housing inventory planned under the NHS is built efficiently is critical to offsetting the current slowdown in housing starts.
Though the federal government provides funding and strategic direction, housing is constitutionally the responsibility of the provinces. As federal entities increasingly assert control over housing policy, the role of the provinces—both in terms of political accountability and policy leadership—must remain central to achieving national housing goals.
Other concerning aspects in recent years are the decline in both commitments and expenditure. Ensuring that the housing inventory planned under the NHS is built efficiently is critical to offsetting the current slowdown in housing starts.
Figure 3.0
Source: NHS Q2 2024 Progress Report
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Figure 4.0
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*These numbers include the following initiatives: Affordable Housing Innovation Fund, First Time Home Buyers Incentive, Apartment Construction Loan Program, Affordable Housing Fund, Rapid Housing Initiative, Federal Lands Initiative and Shared Equity Mortgage Provider Fund.
Impact of New Initiatives: The Housing Accelerator Fund (HAF)
Launched in 2023 with an outlay of $4.4 billion, the Housing Accelerator Fund (HAF) is a key part of the NHS strategy to increase housing supply by incentivizing municipalities to reform zoning regulations and expedite housing approvals. As of Q2 2024, the following progress had been made under HAF:
The introduction of the HAF marks a significant step toward addressing supply-side issues by encouraging local governments to implement policy changes. The fund supports greater housing density, student housing, transit-oriented development, and affordable housing, helping to deliver more homes at accessible price points.
With HAF’s backing, municipalities are actively working to end exclusionary zoning, remove barriers to development, and streamline the approval processes for housing proposals. This is particularly beneficial for rural municipalities, where efforts are focused on upgrading infrastructure and introducing more flexible zoning rules.
Role and performance of provinces and territories
A cornerstone of the NHS is the partnership between federal, provincial, and territorial governments. Provinces and territories (P/T) tailor the delivery of housing initiatives based on local needs, supported by federal funding. The Housing Partnership Framework (HPF), established through bilateral agreements with all thirteen provinces and territories, represents $15.4 billion in joint funding over 10 years (2018/19-2027/28). This funding aims to protect, renew, and expand community housing while addressing provincial priorities like housing repair, construction, and affordability.
Despite this partnership, there has been a significant shortfall in meeting regional NHS targets with some regions struggling to keep pace.
Impact of New Initiatives: The Housing Accelerator Fund (HAF)
Launched in 2023 with an outlay of $4.4 billion, the Housing Accelerator Fund (HAF) is a key part of the NHS strategy to increase housing supply by incentivizing municipalities to reform zoning regulations and expedite housing approvals. As of Q2 2024, the following progress had been made under HAF:
- $3.9 billion has been committed, fast-tracking 105,862 units for approval.
- 544 applications have been received, with 178 signed agreements.
- Larger cities such as Toronto and Vancouver have seen tangible benefits, while rural municipalities have used HAF to update local infrastructure and explore density options to meet their communities' needs.
The introduction of the HAF marks a significant step toward addressing supply-side issues by encouraging local governments to implement policy changes. The fund supports greater housing density, student housing, transit-oriented development, and affordable housing, helping to deliver more homes at accessible price points.
With HAF’s backing, municipalities are actively working to end exclusionary zoning, remove barriers to development, and streamline the approval processes for housing proposals. This is particularly beneficial for rural municipalities, where efforts are focused on upgrading infrastructure and introducing more flexible zoning rules.
Role and performance of provinces and territories
A cornerstone of the NHS is the partnership between federal, provincial, and territorial governments. Provinces and territories (P/T) tailor the delivery of housing initiatives based on local needs, supported by federal funding. The Housing Partnership Framework (HPF), established through bilateral agreements with all thirteen provinces and territories, represents $15.4 billion in joint funding over 10 years (2018/19-2027/28). This funding aims to protect, renew, and expand community housing while addressing provincial priorities like housing repair, construction, and affordability.
Despite this partnership, there has been a significant shortfall in meeting regional NHS targets with some regions struggling to keep pace.
Table 2.0 Funding for Key Provincial Territories
Source: NHS Q2 2024 Progress Report
Table 3.0 Joint Funding Commitments
Source: NHS Q2 2024 Progress Report
While Ontario and British Columbia are leading in terms of housing creation, Quebec, the Prairies, and the Northern Territories face significant challenges. High construction costs, logistical difficulties, and climate-related factors are impeding progress in these regions.
Despite the substantial federal funding support, several provinces have encountered challenges in identifying how their housing units are categorized under different NHS initiatives, leading to inaccuracies in reported data. This has created hurdles in planning as local governments struggle to combine and leverage multiple funding sources. Furthermore, reporting inefficiencies have been noted with provinces and territories expressing concerns over the capacity and infrastructure required to meet federal reporting standards.
Despite the substantial federal funding support, several provinces have encountered challenges in identifying how their housing units are categorized under different NHS initiatives, leading to inaccuracies in reported data. This has created hurdles in planning as local governments struggle to combine and leverage multiple funding sources. Furthermore, reporting inefficiencies have been noted with provinces and territories expressing concerns over the capacity and infrastructure required to meet federal reporting standards.
Table 4.0 Progress against NHS targets
Source: NHS Q2 2024 Progress Report
Strengthening provincial partnerships
Given that joint funding is the second biggest component of the NHS strategy, this partnership needs to be further strengthened and expanded to speed up the creation of housing stock. Many P/T governments have called for greater flexibility in how funds are used, particularly for expanding mixed-income housing, supporting homeownership repair programs, and addressing Indigenous housing needs.
While greater flexibility in fund allocation could enhance progress, it must be balanced against the NHS’s core objective of ensuring adequate investments in social and community housing. A joint task force for planning and implementation, involving federal, provincial, and territorial representatives, could help streamline decision-making and ensure that both short-term and long-term housing targets are met.
Given that joint funding is the second biggest component of the NHS strategy, this partnership needs to be further strengthened and expanded to speed up the creation of housing stock. Many P/T governments have called for greater flexibility in how funds are used, particularly for expanding mixed-income housing, supporting homeownership repair programs, and addressing Indigenous housing needs.
While greater flexibility in fund allocation could enhance progress, it must be balanced against the NHS’s core objective of ensuring adequate investments in social and community housing. A joint task force for planning and implementation, involving federal, provincial, and territorial representatives, could help streamline decision-making and ensure that both short-term and long-term housing targets are met.
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Figure 6.0
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Canada’s National Housing Strategy (NHS) has made significant strides, particularly in the repair of aging housing stock and in providing critical support to vulnerable populations. However, it is evident that the full achievement of its 2028 goals hinges on stronger collaboration and engagement from provincial and local governments. Persistent challenges in new housing construction, regional disparities, and affordability gaps in major urban centres underscore the need for renewed and intensified efforts. The coming years will be pivotal in determining whether the NHS can close these gaps and meet its ambitious targets for affordable and accessible housing nationwide. Ensuring success will require streamlined processes, enhanced intergovernmental partnerships, and targeted strategies to address regional and market-specific housing needs.
The Real Estate Institute of Canada (REIC) has long been a champion of transformational policy initiatives aimed at addressing the housing shortage. In line with the goals of the National Housing Strategy, REIC emphasizes the importance of ethical leadership in creating lasting value for all stakeholders in the housing sector. Through its courses and designations, REIC equips its members with the knowledge and skills to uphold the highest standards of professionalism across the real estate industry. This commitment ensures that REIC members play a pivotal role in developing innovative solutions that meet the housing needs of Canadians, while contributing to the broader objective of improving housing affordability and accessibility.
The Real Estate Institute of Canada (REIC) has long been a champion of transformational policy initiatives aimed at addressing the housing shortage. In line with the goals of the National Housing Strategy, REIC emphasizes the importance of ethical leadership in creating lasting value for all stakeholders in the housing sector. Through its courses and designations, REIC equips its members with the knowledge and skills to uphold the highest standards of professionalism across the real estate industry. This commitment ensures that REIC members play a pivotal role in developing innovative solutions that meet the housing needs of Canadians, while contributing to the broader objective of improving housing affordability and accessibility.
Allwyn Dsouza is REIC’s Senior Analyst, Market Research and Insights. He can be reached at [email protected]. Media enquiries can be directed to [email protected]