Canada’s Solution for Adequate Affordable Housing: The National Housing Strategy Act
"Housing construction in Fort McMurray" by Government of Alberta is licensed under CC BY-NC-ND 2.0
When the Government of Canada recognized that the right to adequate housing is a fundamental human right in 2019, affordable housing advocates were happy, but also uncertain on what it would mean in terms of policy. Canada’s housing supply and affordability faces several challenges including a division over provincial and federal powers, difficulties in building adequate Indigenous and remote housing, and unaffordable metropolitan housing. The 2019 National Housing Strategy Act claims to be the first national and comprehensive federal plan to improve housing supply and affordability.
The challenges that the federal government faces with its national-level plan are varied in nature. First, the jurisdictional authority for housing policy primarily lies with the provincial governments, though the federal government can contribute to affordable housing policy through its spending powers. However, federal contributions to housing policy are generally gate-kept by provincial policy due to cost-sharing mechanisms and coordination problems. The current federal Indigenous housing strategy creates a service gap for those living in the urban, rural, and northern parts of Canada since it focuses on First Nations reserve land. Indigenous families and individuals who live in urban, rural, and northern areas of Canada are in “core housing need,” disproportionately represented in the homeless population, and left behind in the federal Indigenous housing policy. Despite the development of affordable housing policy at all government levels, counter-effective policies that have limited housing supply and raised housing costs through taxes and fees leave many Canadians far from their dreams of being homeowners.
What is the National Housing Strategy?
The National Housing Strategy Act (NHS), announced in 2017, is a ten-year plan that aims to reduce homelessness and improve the affordability, availability, and quality of housing for Canadians. The NHS promises to create structural and systemic change, coordinated across federal, provincial, and territorial government actions and policies. As of 2019, the federal government has allocated $55 billion to reduce chronic homelessness by 50%, remove 530,000 families from housing need, modernize 300,000 homes, and build 125,000 new homes. In order to meet these goals, the federal budgets since 2017 included funding to build more affordable housing, grants for non-profit housing organizations and research, and loans for home-buyers and housing providers. Also, a federal housing advocate will be appointed to monitor policy implementation and progress as well as consult with vulnerable groups. This advocate may require the recently established advisory body, the National Housing Council, to respond to any systemic housing issue within the federal jurisdiction through a review hearing. The NHS created a rights accountability framework, funding and loan arrangements, program provisions, and capital projects in order to deliver its promises. The NHS was to publish its first interim report on its progress in March 2021 which has since been delayed.
What are the strengths and weaknesses of the NHS?
One of the strengths of the NHS is its program, Reaching Home, which targets chronic homelessness by funding other levels of government. This program received a substantial increase in federal funding from $157.2 million per year to $236.7 million per year. The strength of this program lies in its community-based structure, which allows for a lot of flexibility to accurately address local needs and priorities. While over 1,200 community-based projects were launched in the first six months of Reaching Home, the progress towards reducing chronic homelessness by 50% by 2028 is still too difficult to quantify. Other initiatives within the NHS, such as First Time Home Buyer’s Incentive and Housing First programs, face considerable challenges but have made substantial progress in achieving their objectives. Another strong program within the NHS is the 2019 Rapid Housing Initiative, which aims to provide 3,000 new housing units by 2022 through dedicated municipal funding and a project grant system. This application-based program, which provides up to 100% of funding for residential housing projects, gathered so much interest among non-profit organizations, Indigenous authorities, and provincial, territorial, and local governments that the demand for project grants and funding has outstripped the supply of funds. This led to the total construction of 4,700 new homes and dedicated funding for 179 projects that will provide 2,951 homes for vulnerable populations. Also, Canadian municipalities are asking for $7 billion in the upcoming federal budget for cities and housing providers to buy disused properties and quickly turn them into affordable housing. This budget proposal would create up to 24,000 permanent affordable housing units in urban and rural communities. This push for more funding is also seven times the $1 billion allocated by Liberals into the Rapid Housing Initiative last year. Overall, the strength of Reaching Home and the Rapid Housing Initiative lies in the programs’ ability to intertwine the powers and abilities of various levels of government, non-profit organizations, private housing providers, and Indigenous governing bodies. The collaboration between these actors collectively addresses Canada’s housing shortage while maintaining their own autonomy in order to address what they see as the priority and most vulnerable in the community.
While there are strengths to the NHS, there are also weaknesses and problems with the programs and initiatives that the federal government has set out. The Federal Lands initiatives, the overall reduced funding and false claims, and the structure of the NHS limit its overall efficacy in lessening homelessness and creating affordable housing for all. First, the Federal Lands initiative is a plan to create affordable housing units by transferring surplus federal lands and buildings to housing providers at low or no cost. While due diligence with Indigenous communities and other stakeholders is a part of this initiative, the federal government uses its own internal processes to determine which of its properties are under-performing or underutilized to turn into surplus federal lands. At this point, there have only been five properties across Canada that have been identified. Next, one of NHS’s main weaknesses is that it promises minimal new spending, in opposition to their claims and promises. According to a 2019 report by the Office of the Parliamentary Budget Officer, the Liberal government promised no increase in federal government funding beyond the ten-year average. While the federal government touts the NHS as a $40 billion federal investment, the NHS promises only $16.1 billion in new federal spending. Most of NHS’s promised spending is in existing loans, existing planned spending, and provincial-territorial cost matching. So, the actual money promised is around $2.6 billion per year, which is around the same as the previous governments. The NHS is only maintaining the current funding levels while decreasing targeted funding for households in need while also lowering funding for Indigenous housing providers. This demonstrates a continued lack of specific and sufficient housing support for Indigenous households despite the need for it. Finally, the federalism divide also significantly hinders the possible federal power and reach of the NHS. The cost-sharing mechanism in the NHS is $11.7 billion of the total federal commitment. This gives the provincial and territorial governments significant power in blocking or allowing federal housing initiatives. Furthermore, the cost-matching requirements have mostly already been met by the current levels of provincial spending, so it is unlikely that the NHS would lead to increases in provincial and territorial housing funding.
Overall, by maintaining its current funding levels but also reducing the funding for households in the most vulnerable sectors, the NHS misses the mark on helping those who need adequate housing the most. This runs the risk of failing to reach its many targets and objectives. The key problems that Canada faces in reducing homelessness and creating affordable housing cannot be solved by the NHS’s current policy mechanisms and levels of funding. Problems such as cost-sharing and gatekeeping, lack of Indigenous housing, and an adequate increase in housing to reduce inflated housing prices are all incrementally dealt with in a way that doesn’t fully address those problems. Federal-provincial policy and fiscal coordination and an increased focus on creating affordable housing for vulnerable populations are possible approaches that could address key pitfalls of the NHS to successfully create affordable and adequate housing for all Canadians.