The federal government is eyeing underutilized Canada Post and National Defence properties as a way to deliver affordability and supply to the country’s housing market.
In its federal budget released Tuesday, it announced plans to free up lands held by both entities in order to build housing at a pace and scale “not seen in generations” and help younger Canadians get into the real estate market.
The goal is creating a supply of 3.87 million new homes — adding two million net new homes to the 1.87 million the country was already on track to build — by 2031.
The Canadian Mortgage and Housing Corp. has said the country needs to build 3.5 million more homes by 2030 to restore affordability to levels seen in 2003 and 2004.
In order to close the gap between housing supply and demand, the Parliamentary Budget Officer has said the country needs to build 181,000 additional units on average each year until 2030, leaving the nation with 3.1 million net housing units.
To get to 3.87 million houses, the plan adds new initiatives meant to secure more land to build on to previously announced moves like 30-year amortization periods for first-time buyers, a ban on foreign investors, a crackdown on short-term rentals and a $400 million top-up to a $4 billion fund that fast-tracks construction.
One of the plan’s cornerstones is freeing up vacant public land and leasing it to builders to build homes the party claims will be “affordable forever.”
Some of that vacant public land will come from Canada Post, which is sitting on a portfolio of 1,700 post offices across the country.
The government said it is assessing six Canada Post properties — three in Quebec, two in B.C. and one in Alberta — for housing development potential and named another 33 areas where the mail service has land that could be used for building.
National Defence’s 622 properties are also a target. Sites in Halifax, Toronto and Vancouver have been identified for either civilian or military uses and another 14 have been deemed surplus and ideal for housing. (To build 1,400 new homes for military members and renovate 2,500 existing units, $6.9 million has been allocated over the next four years.)
To smooth the ability to make use of public land, the budget proposes spending $5 million over three years on an overhaul of the Canada Lands Co., the Crown corporation that manages federal properties.
The Liberals imagine the overhaul could make it possible to transfer land from the federal government to Canada Lands for $1, wherever possible, cut approval times in half, bundle multiple properties to be transferred at once and provide long-term low cost leases for housing providers.
The government reasons that more land freed up for building will help push down housing costs for average Canadians, which it wants to see spend no more than 30 per cent of their income on shelter.
The budget said the average rent was up 8.2 per cent year-over-year in February, its fastest pace since the early 1980s.
To bring down prices, the government will aim to get more rental housing built for middle-income Canadians through the launch of Canada Builds.
The new initiative relies on partnering with provinces and territories to leverage $55 billion from the existing Apartment Construction Loan Program, which provides repayable, low-interest loans to developers and municipalities.
To access federal funding under the program, provinces and territories will have to show they are building on government, non-profit and vacant land, cutting development approval times and considering access to child care in the development process.
Other budget highlights
Taxes
High-worth individuals, corporations and trusts will pay more in capital gains taxes. The inclusion rate increases to 66 per cent, up from 50 per cent, on capital gains above $250,000 for individuals and on all capital gains for corporations and trusts. The change is expected to yield an additional $19.4 billion over four years.
Excise taxes on tobacco and vaping products are going up: $4 on a carton of cigarettes and by 12 per cent on vape supplies — for a total of nearly $1.7 billion in revenue over five years.
Healthcare
The first programs to cover contraceptives and diabetes medication and supplies, part of the government’s new pharmacare plan, are expected to cost $1.5 billion over five years.
The budget also includes $150 million over three years for an Emergency Treatment Fund to help municipalities and Indigenous communities deal with the opioid crisis.
It also provides $6.1 billion over six years and $1.4 billion a year thereafter for the Canada Disability Benefit and related costs.
On mental health, the government will:
-set up a $500-million fund to help community health organizations give more mental-health care to young people
-legislate a “right to disconnect” for federally regulated workplaces
-put $630 million towards access to mental-health services for Indigenous Peoples.
Indigenous peoples
The budget includes up to $5 billion in “sector-agnostic” loan guarantees for resource projects undertaken by Indigenous communities.
It’s spending close to $1.2 billion on primary and secondary education and infrastructure in First Nations reserves, and $918 million for housing and infrastructure.
The government is also developing an alert system for missing Indigenous women, girls and gender-diverse people.
Students
The government will spend $48 million over four years and $15.8 million thereafter to forgive the loans of early childhood educators.
Another $253.8 million over four years, plus $84.3 million a year thereafter, will go towards loan forgiveness for a host of health and education workers, including hygienists, pharmacists, teachers and social workers.
School food program
Ottawa is spending $1 billion over five years on a national school food program that aims to provide meals for 400,000 additional children.
Public safety and justice
The government plans to amend the Criminal Code to create new criminal offences for auto theft involving violence or with links to organized crime.
They also plan to take steps to criminalize the possession or distribution of electronic devices used to steal cars and regulate such devices.
It will cost $52 million over five years to enact and enforce the new Online Harms Act, which requires large online platforms to act responsibly, and creates a new commission and ombudsperson for digital safety.
There’s new money to combat hate, including:
-$273.6 million over six years for community outreach, law enforcement, counter-radicalization and victim support
-$32 million over six years and $11 million a year thereafter for the Security Infrastructure Program, which funds physical security for community and religious hubs
-$7.3 million over six years for each of the Special Envoy on Preserving Holocaust Remembrance and Combatting Antisemitism and the Special Representative on Combatting Islamophobia.
Environmental policies
More than $900 million over six years for greener homes and energy efficiency programs.
Ottawa also plans a national flood insurance program by 2025, providing $15 million to the Canada Mortgage and Housing Corp.
And it is creating several new parks and wildlife preserves, including in British Columbia, Prince Edward Island and Windsor, Ont.
For businesses:
-a 10 per cent tax credit for the cost of buildings used for key parts of the electric-vehicle supply chain over the next 10 years
-a 15 per cent tax credit over the same period for eligible investments in new equipment or refurbishments for clean electricity
-a new tax credit for about 600,000 small and medium-sized businesses worth $2.5 billion that disburses fuel charge proceeds dating back to 2019.
Foreign policy and defence
The Liberal government plans to boost military spending to 1.76 per cent of GDP by 2030, including $8.1 billion over the next five years and $73 billion by 2044.
The budget earmarks $1.6 billion over five years for lethal and non-lethal military aid for Ukraine.
It includes $350 million over two years to respond to large-scale humanitarian crises and $159 million over five years to support the “transformation” of Global Affairs Canada.
—By Tara Deschamps, The Canadian Press