The federal government tabled its 2023 budget last week and in many ways, it was characterized as a relatively light budget seeking to provide some relief for Canadians challenged by the current economic conditions of spiking inflation and peaking interest rates, without introducing massive spending that might feed the inflation cycle. The single biggest line item at $2.5 billion is the “grocery rebate” targeted at lower income households as a measure to cope with the sharp increase in the cost of groceries. Other items of note are a GST credit also focused on lower income households, clamping down on “junk fees” such as applied to concert tickets, reining in predatory lenders, direction for banks to work with mortgage holders under stress, clean-tech tax credits, expanded dental care, closing tax loopholes, and among other initiatives planning to standardize charging ports across all manufacturers (how nice is that!!)
What was conspicuously absent were any substantive announcements related to housing and coming in the face of the ongoing housing crisis and supply shortfall, as well as the immigration pressures stemming from the federal policy, is difficult to understand. The budget was 269 pages long with only six directed at housing and much of that touched on programs that have already been announced such as the Housing Accelerator Fund, the Tax Free First Home Savings Account, and reiteration of the Foreign Buyers Ban.
What was missing was any funding for subsidized housing being asked for by the provinces, the freeing up of federal lands for housing, any tax credits on materials, or meaningful ways of mitigating the bureaucracy and convoluted requirements for new construction. The 2022 budget was very “housing centric” and recognized the connection between labour and the need to house the workers required for businesses to succeed. The 2022 budget called for 3.5 million homes in 10 years, or 350,000 per annum. Last year industry produced 262,000 homes, with projections for 2023 at 223,000, and 206,000 in 2024 – this will leave us 359,000 short in the first three years of the plan.
Dr. Mike Moffat of the Smart Prosperity Institute offers the comment: “… the federal government has shown, at best, an incomplete understanding of our current housing crisis.” The federal NDP has already stated that they will be supporting this budget and will continue to prop up the minority Liberal administration as a means of leveraging their agenda into government policy such as the expanded dental care program. We will now have to look to the next federal budget to determine what steps can or will be taken to address the shortfall in housing production and the need to accommodate the influx of newcomers to Canada and our region.
In the same article Dr. Moffat suggests a number of actions that could be undertaken in the next iteration of the federal budget: “If the federal government hopes to achieve a 3.5 million unit housing target, it needs to enact substantive reforms to create the conditions for more private-sector housing investment. These reforms could include measures to make financialization work to enhance affordability rather than detract from it. Refocusing financialization would require changes to the tax code to make it more desirable for investors to build new attainable, family-friendly, and climate-friendly housing rather than buying existing units. One such mechanism would be the introduction of accelerated capital cost provisions for purpose-built rental projects. The federal government could also develop a strategy to lower the price of building materials, including reductions in import tariffs. Or how about an innovation agenda for housing to enhance productivity in homebuilding and accelerate the adoption of new methods and materials, such as mass timber? In short, the government needs more than a simple unit target, it needs a plan, and it needs it immediately.”
HAVAN continues to work with CHBA BC and CHBA to advocate for all levels of government to work together to address the challenges of the housing industry including zoning restrictions, density limits, and NIMBYism.
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Quick Bites …
- On January 3 of this year, I was contacted first thing in the morning by our CHBA National office to enquire if we had received any feedback from our membership on the Foreign Ownership Ban which in addition to prohibiting purchase of homes by foreign purchasers introduced a prohibition of the purchase of any property, or vacant lands for the purposes of development by any entity with more than 3% foreign ownership. This regulation was introduced with no industry consultation and had the unintended consequence of interrupting numerous development initiatives across the country which could further adversely affect the delivery of much needed housing.
CHBA immediately sought to confer with CMHC, Ministry of Finance, and Ministry of Revenue and bring to light the consequences of the regulation as it was released. Last week the government announced a repeal such that the prohibition does not apply to vacant land, an exemption for development purposes, they increased the foreign control threshold from 3% to 10%, and they will allow newcomers with work permits to purchase homes while working in Canada.
This constitutes a significant “win” for the Homebuilders Association, achieved in record time, supported by commentary provided from this jurisdiction and both comments and direct communication with National and Bild-GTA. Well done all around!
- In a good week for CHBA National it was also announced that our federal colleagues have been successful in securing some much-needed clarity, administration-reducing/ cost-saving interpretations, and more time to file on the Underused Housing Tax that was requiring property owners to file a declaration by April 30, 2023. No penalties or interest will be applied to any late filings provided that they are received by October 31, 2023. Access the details via the link above and once again kudos to our national representatives for easing the burden of federal regulation on our sector.
- We have touched on the aggressive federal immigration policy many times and it is widely seen as essential to meeting our demands for labour and particularly skilled labour as we move our economy and the housing sector forward. Ontario has adopted policies that will provide a greater opportunity to allow “ … more foreign-trained workers with specialized skill sets and skilled trades experience to immigrate to the province in order to fill positions in construction and other industries.” This policy change will help to ease the skilled labour shortage in the construction sector and streamline the administrative process for new immigrants. It is an initiative that BC might wish to examine in order to ensure the newcomers invited into BC can contribute to fill our specific labour requirements
- While we are looking at issues on the National radar, we would like to broach the subject of the Pileated Woodpecker, a woodpecker species under threat and federal jurisdiction in regard to protection. We have recently been apprised of members running directly into significant delays and disruption of plans on account of this issue. Lifting directly from the Provincial EO briefing of last week: “Members have recently cited issues related to recently adopted federal Migratory Birds Regulations, 2022, specifically the significant permitting timelines associated with Damage or Danger Permits for Nest Destruction of Pileated Woodpecker nesting cavities. As per this regulation, a significant 36-month waiting period may be required if nesting cavities are discovered on sight, having the potential to slow down supply significantly. As a federal policy, CHBA BC is working with the National team to submit a letter to the Canadian Minister of Environment and Climate Change and the Minister of Housing. To help inform us for the letter, members are encouraged to contact Carmina@chbabc.org with comments.” The issue at hand is not insignificant and members need to be aware of the regulations. Please follow the links and we will keep you apprised of progress on this file which is a clear example of how efforts to expedite the provision of housing is frustrated by overlapping layers of obstacles.
- CHBA- BC Director of Government Relations, Carmina Tupe has provided a summary of the BC Government Growing Communities Fund and touches on the nature of the fund, eligibility, and most importantly the actions we need to pursue in order see that such funds can actually be applied to addressing the needs and priorities of growth in the communities receiving the funds. Particularly we need to “seek member feedback” on how the money should be best used to support housing objectives and then advocate municipal council and staff to achieve those ends while looking for accountability. A case in point is the $89 million received by the City of Surrey which was immediately applied to offsetting a 10.9% municipal tax increase and does nothing for housing or accommodating growth in that community.
- In this article from the Globe and Mail, the issue of a slowdown in the renovation market is touched on. While the article focuses on the situation in Toronto, we have heard similar comments from members locally that while very busy currently in fulfilling previously contracted works, the outlook points to a potential slowdown. We would be pleased to receive some member feedback on this issue as well and comments can be left with email@example.com
- To follow up on comments on Vancouver’s Broadway Plan and the seeming disconnect between a bold plan to increase density and intensify use surrounding the rapid transit line being currently constructed and staff recommendations to follow a limiting pace of change of five projects year, last week Vancouver council voted to not accept the proposal limit implementation. “… Council argued housing crisis demands building as fast as possible” This seems to signal a clear intent that council wishes to expedite progress and that pace will inevitably be regulated by “… factors both inside and outside city hall’s control limiting the pace of development, such as interest rates and economic factors, the labour market, and city hall’s capacity to process rezoning applications and issue permits”.
- There has been much debate in relation to the relative capacity of BC Hydro to affect a wholesale electrification of our BC energy needs in providing for EV’s, space heating, and domestic water heating, as well as LNG production leading to lowering our carbon footprint. In two articles, one from the Globe and Mail, and the second from Keith Baldrey in Burnaby Now the issue of capacity is outlined and raises some questions despite the assurances offered by BC Hydro. The numbers presented would suggest otherwise, and we are aware of sub-division applications in Surrey and the Township of Langley potentially being stalled or sidelined on account of hydro capacity and infrastructure unable to meet projected demand in a fully electrified energy profile.
The inroads to gentle densification are also being impeded by inflated demand load calculations that cannot be satisfied by available capacity, and requirements to include EV charging stations in all new condo builds are adding substantial if not prohibitive costs to construction. This is not a positive contribution to the provision of affordability in housing.
The reduction or elimination of carbon footprints and GHGI are essential to our collective future, but a proper and realistic evaluation of infrastructure and capacity must be applied prior to “putting all the eggs in one basket.” All stakeholders need to evaluate the capacities and opportunities to achieve our climate targets using all of the tools available to us and maintaining choices. It would be a very poor strategy to commit to a single-source energy provider only to find that needs cannot be met, or that costs are prohibitive.
- The Daily Hive on April 1 posted a comprehensive article on the announcement of a $3.8 billion plan for a Boundary Road Bridge across the Fraser River to provide an additional link between Vancouver/Burnaby and Richmond. A very detailed plan that calls for integration with the 91 Connector the plans appear well thought out and introduce ideas that would be very welcome despite being a bit “out there” – Spoiler Alert: it was an April Fools prank. Too bad!!
- Daily Hive also reviewed some of the best April Fool’s jokes that our friends in the media thought would be funny if not provocative – enjoy!!