Prime Minister Justin Trudeau detailed plans Tuesday to spend $2 billion to create more affordable housing in Canada.
This spending includes commitments made in the last two federal budgets.
Trudeau said part of that $2 billion will go toward creating 17,000 new homes in Canada, most of which will be affordable housing.
It also announced a new five-year rental stream under the Affordable Housing Innovation Fund, with applications open for developers looking to use the model from Tuesday. The 2022 federal budget allocated $200 million for a rent-to-own plan.
While Canada’s housing market has shown signs of cooling since the Bank of Canada began raising interest rates earlier this year, Trudeau acknowledged that rising rents have been a barrier for aspiring homeowners.
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“For many renters, saving to buy a home is becoming increasingly difficult,” he said from Kitchener, Ont.
Read more: Canada’s housing market cools as interest rates rise. But rents have never been hotter
New spending through the Housing Innovation Fund will also go towards building 10,800 housing units to help address Canada’s supply shortage, which economists regularly identify as a barrier to home affordability and ownership in the country. About 6,000 of those units will be affordable units, the government said.
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No timetable has been given for when these units will be completed. Arevig Afarian, a spokesman for Housing Minister Ahmed Huysen’s office, told Global News that more information on the weather is expected by the end of this year.
Trudeau also announced Tuesday as part of a $2 billion, two-year expansion of the federal government’s Rapid Housing Initiative (RHI), which is not yet open for applications.
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Read more: Canada needs ‘all hands on deck’ to close housing supply gap: CMHC
The third round of the RHI was earmarked for $1.5 billion in spending in the 2022 federal budget. In April, the feds said the money would support the construction of 6,000 affordable units, although Trudeau’s announcement Tuesday estimated 4,500 new buildings.
Afarian said the decrease was due to increased construction costs caused by global inflation as well as a volatile housing market.
The RHI launched in 2020 and has so far supported the construction of more than 10,000 units, according to federal government statistics, in two rounds of funding worth $2.5 billion.
The federal Liberal budget earmarked $10.1 billion in spending over five years targeting housing.
Deputy Prime Minister Chrystia Freeland said earlier this month that Ottawa will take “further action if necessary” to improve housing affordability in Canada.
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