How does the federal government plan to fix Canada's housing crisis?

In a bid to tackle the escalating housing crisis in Canada, finance minister Chrystia Freeland has underscored the federal government's commitment to resupply the housing market with affordable homes. Central to this effort is the deployment of the Housing Accelerator Fund, a targeted initiative designed to rapidly increase the availability of affordable housing across the nation.

“There isn’t one single solution to Canada’s housing challenge. We need to have a lot of different tools in our toolbox and certainly one of the tools we need is to just get more homes built faster,” Freeland said.

The Housing Accelerator Fund has already shown promise, with agreements in place to fast-track over 21,000 more homes in key cities across Canada. This initiative not only aims to cut through bureaucratic red tape but also to kickstart construction activity.

The housing landscape in Canada continues to be marked by soaring prices and a significant mismatch between supply and demand. In regions like British Columbia, the average home price has surged by 10.5% year over year, pushing the dream of homeownership further out of reach for many Canadians. This trend is not isolated to BC alone—provinces from Quebec to Alberta are witnessing similar patterns of growth, albeit with varying degrees of intensity.

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The government's strategy, as articulated by Freeland, is multifaceted, aiming not just to boost the supply but also to ensure that housing remains accessible to first-time homebuyers.

“We definitely as a government believe we need to support young Canadians in buying that first home. That’s one of the reasons we launched First Home Savings account,” Freeland said.

The First Home Savings Account (FHSA) stands out by offering a dual benefit: the ability to contribute up to $8,000 per year with a lifetime limit of $40,000, combined with the advantage of tax-deductible contributions and tax-free withdrawals for the purchase of a qualifying first home within Canada. Freeland noted that over half a million Canadians have opened an account since FHSA launched in April 2023.

“Our central focus needs to be that houses need to be homes for Canadians to live in. We shouldn’t be thinking about [houses] as a financial asset,” Freeland said.

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