Press review of early April

In our early April press review, we look at the sums allocated to housing in the budgets presented by the Quebec and Canadian governments.

By Corinne Laberge

Housing partners’ mixed reactions to Quebec budget

The Journal de Québec reviews the main points of the provincial budget for the real estate industry. The introduction reads: “In the short term, the Legault government will not be able to make up for the lack of affordable housing, but it will put money back into the pockets of those most affected by the rent increases.”

Minister Girard states in his budget that one of the “preferred solutions” to the province’s housing shortage is to build more social and affordable housing. It is expected that 5,250 housing units will be built over five years. The article notes that “this figure includes only 1,500 new units, in addition to funding to support the creation of 450 units through a federal government program,” and that, during the election campaign, Coalition avenir Québec committed to creating 11,700 new affordable housing units. When questioned about this, Minister Girard “indicated that the remaining units would be covered in future budgets.”

The article goes on to say that the government is “playing catch-up” as “it will invest $191.5 million this year to build 3,300 housing units already planned under the AccèsLogis program. Their construction has been slowed by rising interest rates and labour shortages.” In addition, another 3,300 units announced under the program will not be built with this new investment. The article notes that, “To date, $1.1 billion has been invested in AccèsLogis.”

As for the public housing stock, which is “so old that some units are no longer fit to live in,” the budget will allocate $105 million in 2023, but only for renovations. It should be noted that,
“according to the Plan québécois des infrastructures, 37% of social and affordable housing is in ‘poor’ or ‘very poor’ condition.”

The provincial budget also includes “measures to mitigate the impact of the housing crisis until it is resolved.” This includes an improvement in the housing component of the solidarity tax credit, and $53.2 million over five years to add 2,000 units to the rent supplement program for households in financial need.

In an article in Les Affaires entitled “Presque rien pour améliorer l’offre sur le marché locatif” (Almost no help to improve the rental market supply), the author argues that there is “no help for contractors and investors trying to rebalance the mathematics of project financing, made even more difficult by high interest rates, which is delaying or simply blocking real estate projects.”

While the Association des professionnels de la construction et de l’habitation du Québec (APCHQ) estimates the inventory shortfall at 100,000 units, and the Canada Mortgage and Housing Corporation (CMHC) proposes building 60,000 additional units per year until 2030 to restore supply, “it’s a sprinkling of measures that are not very effective,” André Castonguay, Executive Director of the Réseau québécois des OSBL d'habitation, is quoted as saying.

According to Marc-André Plante, Director of Public Affairs at CORPIQ, “the 2023 provincial budget is a weak response to the demands of the industry’s players. The increase in interest rates is an obstacle to the renovation of the rental housing stock. Unfortunately, the Quebec government did not use the budget as an opportunity to send a message to revive construction in 2023 and stimulate the renovation of aging units. Let’s hope for other announcements soon, because the situation could be very trying in the short term.”

Lastly, this article from the Journal de Montréal reports on the statements made by France-Élaine Duranceau, Minister Responsible for Housing, following criticism from Valérie Plante, Mayor of Montreal, who described the amounts announced as “clearly insufficient.”

Industry players disappointed by housing investment announced in federal budget despite needs on the ground

This article in Les Affaires begins: “With the budget clearly prioritizing green industries and dental care, there was little money left for other discretionary spending, such as housing.”

In the midst of declining housing starts, the APCHQ makes recommendations worth considering, such as “substantially improving the GST rebate for new housing and fully exempting social and affordable rental housing from the GST.” The article also states: “To encourage the construction of buildings with more than four units, which is being held back by rising interest rates, the terms of several advantageous CMHC programs could be combined (in particular, MLI Select and the Rental Construction Financing Initiative).”

And this Radio-Canada article discusses the high expectations for housing in the 2023 federal budget.

Le Droit also published an article on the subject, which begins: “The federal budget of Justin Trudeau’s government, announced on Tuesday, left elected officials and organizations disappointed when it comes to housing.”

The article later reports the Twitter post by Daniel Champagne, Municipal Councillor, Versant District: “The crisis is undeniable and serious. We cannot face it without you. No extra money. Having nice teeth is important, but not as important as having a place to live.”

Ottawa Mayor Mark Sutcliffe’s office expressed “some satisfaction” that the new Housing Accelerator Fund has “the potential to help Ottawa,” and that it “could help municipalities overcome the most significant local barriers to housing supply, such as access to funding, land availability and cost, and the regulations and systems in place to review and approve development applications.”

For CORPIQ, “Ottawa’s 2023 budget is not in line with CMHC’s objectives designed to stimulate housing supply and thereby restore some balance to Quebec’s real estate market. Unfortunately, without support for the industry and our members, the housing crisis will continue for some years to come.”