The 2024 federal budget tabled by the Liberal government focuses on fairness among generations and aims to make the housing market more affordable, particularly for younger Canadians. Experts believe that the budget offers hope in improving access to the often unaffordable housing market. However, there is acknowledgment that there is no quick fix to the long-standing issue of rising home prices outpacing wage growth, creating barriers for many young people trying to break into the housing market. Despite this, the recognition of generational differences in the budget is seen as a positive step towards addressing these issues.
The budget proposed $8.5 billion in new housing initiatives with a promise to build 3.87 million homes by 2031. Measures such as tax incentives to encourage rental construction and making federal lands available for developing non-market housing aim to stimulate the supply of new housing in Canada. These are considered long-term policies that will take time before renters and homebuyers see the impact of expanded supply in the market. While the boosts to housing supply may take years to make a significant impact on affordability, they are seen as important investments for the future of the housing market.
Senior economist Francis Fong from TD Bank acknowledges that restoring housing affordability has been a challenging task for the government. The success of the government’s ambitious homebuilding targets will depend on the cooperation of provinces and municipalities to increase construction. While there is cautious optimism about the government’s efforts, it is acknowledged that there is no immediate fix for Canadians struggling to buy a home or qualify for a mortgage. The increase in withdrawal amount for the RRSP Home Buyers’ Plan and changes to amortization periods are seen as positive steps to assist potential buyers.
Mortgage broker Leah Zlatkin raises concerns about the limited impact of the proposed changes in the housing market, as they mainly apply to insured mortgages and new builds. Policies aimed at increasing demand may not be effective in restoring affordability, as they can lead to heightened competition and increased prices. The proposed Renters’ Bill of Rights is highlighted as a critical element of the budget, aiming to empower renters by providing protections against unfair practices by landlords. However, there are differing opinions on the effectiveness of these policies in addressing the root causes of high rents and home prices in Canada.
While the focus of the budget is primarily on the ownership market, there are also proposals for a Canadian Renters’ Bill of Rights to address issues such as renovictions and improve tenants’ negotiating power with landlords. The budget also includes measures to allow renters to build their credit score using their rent payments. While some believe these actions will empower renters, others question their effectiveness in addressing the high rents and home prices in the rental market. Overall, the 2024 federal budget represents a significant step towards addressing generational differences and affordability challenges in the Canadian housing market, but long-term solutions and cooperation between all levels of government are essential to achieve lasting change.
