Prime Minister Justin Trudeau, along with several liberal ministers, has made certain declarations regarding what newcomers can expect from Budget 2024.
The Budget helps set the tone for how Canada will be government in the coming year.
In advance of the Budget, the Liberal Government has disclosed significant new funding. These funds are allocated to initiatives that will help ease the pressure on Canada’s housing crisis.
For newcomers to Canada, it might be less difficult to find an affordable place to live as a renter/ owner.
Renter’s Rights & Increased Investment
What newcomers can expect from Budget 2024? Well, among the new initiatives expected in the Budget on March 27, Justin Trudeau declared that the nation will introduce a Renters Bill of Rights.
The Bill aims to ensure that renters in Canada have more resources available so that they get a fair rental rate. For instance, landlords need to provide potential tenants with previous rental rates for the unit. This will give renters more bargaining power & ensure they aren’t being taken advantage of.
Further, the Canadian government will be working with suitable authorities to ensure that those who pay rent on time have it taken into account in their credit score. This implies that newcomers who pay rent can increase their credit score & might ultimately be eligible for lower interest rates on a mortgage when they are in a position to buy a home in Canada.
Trudeau also recently declared that the Budget will include over $15 billion in investment in the Apartment Construction Loan Program. This will bring the total acquisition in the program to $55 billion.
The ACLP is a low-interest loan to encourage developers to build apartments & increase overall supply in Canada. In Particular, it aims to construct at least 131,000 new apartments in the next ten years.
Moreover, a $6 billion Canada Housing Infrastructure Fund is aimed at accelerating the construction & upgrading of critical housing infrastructure. This includes water, wastewater, stormwater, & solid waste infrastructure to support the construction of more homes.
Well, this has caused some controversy among Canada’s provinces as $5billion of the fund is for agreements with provinces/ territories to support long-term priorities. This implies that territories/ provinces can only access this funding if they can take action that the federal government deems reasonable to increase the housing supply.
One of these requirements is that municipalities broadly adopt four units as of right & allow more ‘missing middle’ homes.
Renting As The Newcomers In Canada
Many newcomers rent their first home while they work on establishing roots in their communities. Census 2021 data demonstrates that growth in rentals outpaced homeownership between 2011 & 2021.
Moreover, according to data from Statistics Canada, one in six immigrants who arrived in Canada from 2016 to 2021 were recent renters. Many of them were in ‘unaffordable’ circumstances.
What Is Causing The Housing Shortage?
What newcomers can expect from Budget 2024? Well, the CMHC states that there is some issue that is leading to the housing shortage. The main issue is that the supply of housing in Canada has failed to keep up with the demand.
The demand comes from Canada’s rapidly growing population. Well, this is directly impacted by IRCC’s high immigration targets for immigration in previous years, specifically following the COVID-19 pandemic. For instance, in 2023, Canada welcomed over 471,555 new permanent residents & around two million temporary residents.
This rapid increase in population comes at a time when the number of housing starts is relatively low. CMHC demonstrates that housing starts were down 7% in 2023.
Moreover, CMHC also states that this deadline is primarily explained by a 25% decline in single-detached starts in 2023. Furthermore, it is expected that up to nine million Canadians will retire by 2030. As a result, many of them will leave job vacancies in high-demand sectors, like construction.
A report published by CIBC in June 2023 found that there were over 80,000 vacancies in the construction sector, leading to less productivity. This implies that it is taking longer to build & the cost is higher, so unit prices are also higher.