Housing minister says he's undaunted by provincial threats to block housing plan

Federal Housing Minister Sean Fraser said Tuesday he won't stop working directly with municipalities to build more homes faster — even if that upsets premiers who say Ottawa is engaging in jurisdictional creep.

Speaking to reporters on Parliament Hill, Fraser said the federal government's Housing Accelerator Fund, which gives money to towns and cities that commit to reducing red tape, has seen some early success and eventually will help to facilitate the construction of tens of thousands of new homes.

Canadians want to see progress, not a fractious debate over whether Ottawa should be cutting cheques directly to municipalities, Fraser said.

The Canada Mortgage and Housing Corporation (CMHC) estimates the country needs to build 3.5 million more housing units by 2030 to meet explosive demand as the country's population expands, thanks in part to record immigration.

Total housing starts numbered about 260,000 units last year, according to CMHC data. That suggests construction will have to meaningfully accelerate to meet the demand for affordable homes.

"I have no appetite to slow down when it comes to building homes during a housing crisis," Fraser said, adding the accelerator fund already has convinced cities to reform their zoning laws and "increase their ambition" on home building.

"The fund is working and it's working more effectively than I think most people expected it would. When we have a tool that's proving itself as an effective way to get more homes built, there's no good argument, in my view, to take that tool off the table."

The minister's defence of the program comes a day after the country's premiers issued a warning to Ottawa: include provinces and territories in accelerator fund planning or risk facing new provincial legislation that blocks these deals entirely.

The premiers said federal funds should flow first to the provinces before premiers can decide where to put the cash.

That's the deal Quebec negotiated — Ottawa transferred $900 million to that province. Cities and towns in other parts of the country, meanwhile, will have to go directly to Fraser if they want money.

"We need fairness, we need equity and we're not seeing that with the current model," Alberta Premier Danielle Smith said of the accelerator fund.

Alberta Premier Danielle Smith says the federal government's approach to housing lacks "fairness" and "equity." (Jeff McIntosh/The Canadian Press)

Nova Scotia Premier Tim Houston said the "lack of collaboration" on housing has "created duplicate processes" and it "risks pitting provinces and territories against each other."

Ontario Premier Doug Ford said the federal government has been "surprising" premiers by popping up in municipalities unannounced and splashing cash around "when it's not their jurisdiction."

"If the provincial governments want to get onboard by matching funding, they're more than welcome. I would welcome their participation. But there's no circumstance where I'm going to slow down. We need to move as fast as we can," Fraser said.

Provincial legislation to sever the bilateral Ottawa-city relationship would needlessly derail a well-functioning program, he said.

Since late summer, Fraser has signed deals with cities like Calgary, Hamilton, Halifax, London and Vaughan, Ont. — agreements that reward these places with federal cash if they commit to boosting density by allowing more homes to be built.

For example, Fraser recently agreed to hand over some $59 million to Vaughan in exchange for the city agreeing to amend the zoning bylaw to allow up to four residential units to be built on one lot and make other changes to speed up construction.

Fraser said there are 540 applications currently under review. "We're working very quickly to deploy agreements backed by significant federal funding," he said. "My expectation is that Canadians are pleased the government is taking this kind of direct action."

Asked about provincial concerns about the program at a separate housing announcement, Deputy Prime Minister Chrystia Freeland suggested the premiers are not spending enough to get more homes built.

"I think that it would be great for provinces to support municipalities across the country to the extent that is needed," she said.

Treasury Board President Anita Anand said the province's messaging on housing is incoherent. They want Ottawa to step up but then gripe about how Ottawa spends its money, she said.

Freeland, Anand and Public Services Minister Jean-Yves Duclos announced Wednesday that the federal government will make more of its surplus land available for home construction.

Deputy Prime Minister and Minister of Finance Chrystia Freeland and President of the Treasury Board Anita Anand look on as Public Services and Procurement Minister Jean-Yves Duclos speaks during a news conference, Tuesday, November 7, 2023 in Ottawa. (Adrian Wyld/Canadian Press)

Six federal properties will be developed into more than 2,800 new homes in Calgary, Edmonton, St. John's and Ottawa, they said. About 300 of those units will be considered "affordable housing," Duclos said.

That means the Canada Lands Corporation, which manages federal property, is now on track to support the construction of more than 29,200 new homes over the next six years.

Asked if that's the best Ottawa can do when CMHC projects the country will need many more homes than that, Freeland said, "Watch this space."

Freeland defended the government's housing plan to this point, saying 250,000 Canadians have opened a first home savings account in recent months.

The savings account program combines the features of an RRSP and a TFSA in that money added to the account goes in tax-free and can be withdrawn without any taxes owing on investment gains. First-time homebuyers can save up to $40,000 toward a house.