Article
Target Practice: Are Canadian Provinces Hitting Their Housing Targets?
April 9, 2024 4 Minute Read
Whether you are renting or looking to buy, accessing housing has never been more challenging in Canada.
New immigration targets set by the Federal Government added 1.3 million new Canadians in 2023, the largest amount in 66 years. That is creating challenges for a housing market constrained by a decreasing number of trade workers and less construction due to high interest rates and rising material costs.
The vacancy rate in purpose-built apartment buildings is the lowest since the 1980s, at 1.5%, according to Canada Mortgage and Housing Corporation (CMHC).
And rents are rising astronomically, increasing by more than 8.0% since last year. Homeownership is even more challenging with The Bank of Canada reporting that housing affordability reached the worst level in 41 years at the end of 2023.
CMHC has projected that Canada will need 3.5 million additional housing units by 2030 to accommodate the country’s population growth.
CIBC World Markets economist Benjamin Tal estimates that the real number should be closer to 5 million. With people struggling to access and afford housing, there has been a stream cycle of construction targets announced and revised promises from various levels of government.
Here’s a look at how some Canadian provinces plan to address housing in the coming years.
British Columbia
B.C. has set targets to develop 60,103 units in the next five years. The province introduced the Housing Supply Act in 2022, targeting municipalities with the greatest projected growth and housing needs.
Ten municipalities were selected, including Vancouver, Victoria, Abbotsford, Delta, Port Moody and Kamloops, and the province is nudging them to update zoning bylaws and improve the development approval process. More municipalities will be selected in a second round to come.
Alberta
Alberta’s Stronger Foundations strategy aims to expand the province’s affordable housing supply by building an additional 25,000 homes above current construction levels over the next 10 years.
This will increase the total units delivered annually to 82,000. But CMHC data indicates that 130,000 new housing units are needed by 2030 to close Alberta’s supply gap.
Ontario
Ontario has earmarked $1.8 billion to build 1.5 million homes by 2031. The province is aiming to create 110,000 new homes each year, and in 2023 came very close with 109,011 new homes completed.
The province has also set housing targets for Ontario’s 50 largest municipalities, 19 of which reached or exceeded their goals for 2023.
Municipalities are incentivized through the Building Faster Fund, a $1.2 billion fund that provides up to $400 million per year to reward municipalities that have achieved at least 80% of their annual target, with a bonus for those exceeding their annual goals.
Quebec
Quebec needs to build 860,000 housing units by 2030 to restore affordability in the province, according to CMHC. This represents about 107,500 units per year above current construction levels. There were fewer than 40,000 housing starts in 2023.
Last fall the Quebec government budgeted $1.8 billion to build approximately 8,000 social housing units over the next five years. Earlier this year CMHC announced that the governments of Canada and Quebec would support the construction of 2,574 homes across 47 projects across the province.
Nova Scotia
The Nova Scotia government in 2023 launched its Our Homes, Action for Housing plan. Representing a $1 billion provincial investment, the strategy aims to create the conditions for 40,000 new housing units over the next five years.
The plan is based on three prongs: increasing housing supply, growing and sustaining affordable housing, and providing programs for people in need.
The government has also provided each of the province’s 49 municipalities with recommendations. At the current pace of construction the supply gap in Nova Scotia could exceed 41,200 housing units in the next five years, or 80,400 in the next decade. So urgent action is needed.
Urgent Action Needed
Canada’s housing market is facing significant changes and provinces are responding with ambitious construction targets and strategies to improve housing affordability.
How it will all play out remains to be seen but one thing is certain: millions more new Canadians are streaming in each year and they will all need to live somewhere. Time may not be on our side.
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