Budget 2024: What to Expect for Newcomers in Canada

Before the budget announcement, the Liberal government has unveiled plans to inject substantial funding into measures aimed at alleviating the ongoing housing crisis in Canada. This focus on housing promises significant relief for newcomers to Canada, potentially easing the process of finding affordable housing, whether as renters or buyers.

Enhanced Renter Protections and Investments

A pivotal feature of Budget 2024, as revealed by the Prime Minister on March 27, is the introduction of a Renters Bill of Rights. This initiative will bolster the resources available to renters, ensuring they have access to previous rental rates of properties to strengthen their negotiating power and prevent overcharging by landlords.

Moreover, the government intends to consider timely rent payments as part of an individual’s credit score. This change will benefit newcomers who consistently meet their rental payments, potentially improving their credit ratings and qualifying them for better mortgage rates when they decide to buy a home.

Expansive Funding for Apartment Construction

In a recent update, Trudeau announced a significant expansion of the Apartment Construction Loan Program, with an additional $15 billion earmarked, raising the total investment to $55 billion. The program provides low-interest loans to developers for the construction of new apartment units, targeting the creation of at least 131,000 new apartments over the next decade.

$6 Billion for Housing Infrastructure

The government is also setting aside $6 billion for the Canada Housing Infrastructure Fund to expedite the construction and renovation of essential housing infrastructure. This fund will cover services such as water, sewage, and waste management systems essential for residential development.

However, this funding has sparked debates among provincial leaders, as $5 billion is conditional upon provinces and territories adopting policies that the federal government believes will enhance housing supply. These policies include permitting the construction of multi-unit residences such as duplexes, townhouses, and small apartment buildings without extensive zoning changes.

Challenges for Newcomers Renting in Canada

For many newcomers, renting is the first step toward settling in Canada. Data from the 2021 Census indicates that rental housing growth has outstripped home ownership, with a significant number of recent immigrants spending more than 30% of their income on housing, categorizing it as unaffordable.

Underlying Causes of the Housing Shortage

The Canada Mortgage and Housing Corporation (CMHC) identifies insufficient housing supply as the core issue, struggling to keep pace with the demand driven by a booming population. This surge is fueled by high immigration targets set by Immigration, Refugees and Citizenship Canada (IRCC), especially post-COVID-19 pandemic.

In 2023 alone, Canada welcomed over 471,555 new permanent residents, alongside more than two million temporary residents. This population increase coincides with a decline in housing starts, further aggravated by a significant drop in the construction of single-family homes.

The construction sector itself faces challenges, with a June 2023 CIBC report highlighting 80,000 job vacancies that slow down building processes and increase costs.

As Canada approaches 2030, with up to nine million potential retirements, these issues underscore the critical need for increased productivity and capacity in the housing sector. Budget 2024 aims to address these challenges, offering newcomers a glimpse of hope in an otherwise tight housing market.