Trudeau government plans to lease 56 properties for affordable housing

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The federal government has added 56 plots of land suitable for long-term leases to a new database of public lands so developers can create affordable housing.

Housing Minister Sean Fraser made the announcement today in Halifax, just before a three-day cabinet meeting to prepare for the upcoming autumn session of Parliament.

The properties currently included in the public lands include former military bases, Canada Post sites and government agency buildings, among others. Many of these properties were previously earmarked for sale because they are no longer in use.

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The new plan calls for most of them to be offered for long-term lease rather than through a one-time sale, in order to keep the land in public hands and ensure that the housing built on it remains affordable.

The current list includes properties in 28 municipalities in seven provinces, but will be expanded over time through an ongoing review of unused or vacant federal land and buildings.

Five properties first identified in the April Budget are now entering the development phase and the Government is asking developers for expressions of interest or requests for proposals.

Four of them are located on former military bases in Calgary, Edmonton, Toronto and Ottawa, while the fifth is on the site of a former National Film Board building in Montreal.

The new land bank and an accelerated plan to convert federal property into housing were part of the Liberals’ comprehensive housing program announced in April, details of which were released in the spring budget.

Housing will be a key topic at the cabinet meeting as Canadians continue to struggle with high costs and limited availability.

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The annual end-of-summer Cabinet meeting takes place three weeks before Parliament returns for its autumn session and is likely to be the last summer retreat for this Cabinet before the next election.

This could be the last real chance for this government to realign its position with voters before asking them for another mandate.

The meeting could be overshadowed by ongoing tensions with the Canadian railway company stemming from a work stoppage that began Thursday and is set to end Monday. Labour Minister Steven MacKinnon directed the Canada Industrial Relations Board to begin binding arbitration with the railway company and the Teamsters union, which represents 9,300 workers at Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC).

The Teamsters union has announced it will challenge the decision in court, and President Paul Boucher said Sunday he was on his way to Halifax with other union leaders to “protest this decision at the Liberal caucus retreat.”

He asks all members of the region to join the protest.

The conflict is the latest in a series of supply chain and labor issues the Liberals are currently facing or will continue to face, including in ports, rail and air travel.

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Supply chain disruptions following Covid-19 contributed significantly to high inflation, which has also led to a food affordability crisis in Canada and many other places around the world.

Canada’s housing crisis – caused by high interest rates and rapid immigration that outpaces housing supply growth – is another major factor leading to widespread dissatisfaction with the Liberal government.

A year ago, the focus at a cabinet meeting in Charlottetown was heavily on housing construction, as rapidly increasing immigration and sluggish construction activity led to a decline in housing supply and a rise in prices.

But the Liberals left the retreat without making any concrete announcements, and their poll numbers continued to decline as they failed to convince Canadians that they had a recipe for solving a problem that had become critical under their leadership.

This time they want to offer Canadians a lot, including the announcement about housing construction on Sunday.

Former Liberal chief of staff Marci Surkes, now chief of strategy at government relations firm Compass Rose, said housing would play a central role in that retreat and the Liberals’ future agenda.

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“Frankly, the government has certainly made significant policy actions and investments since last year and some of these are starting to bear fruit, but the reality is that the focus must remain on care,” she said. “Real relief is not yet in sight.”

The government intends to stimulate the construction of 3.87 million new housing units over the next seven years.

It is estimated that between 3.1 and 3.5 million new housing units will be needed by 2031 to solve the housing crisis that has resulted in Canada having some of the least affordable housing among developed countries.

The Canada Mortgage and Housing Corporation warned earlier this year that the housing affordability crisis was likely to last until 2026, although housing starts could increase in the coming months thanks to falling interest rates.

During the first two years of the COVID-19 pandemic, demand for housing in Canada skyrocketed. Between March 2020 and March 2022, the average price of a home in Canada rose more than 50 percent to $835,000. Since then, that price has fallen as high interest rates drove up borrowing costs and fewer people wanted to buy a home.

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Average rents have increased by almost 25 percent in the last five years.

The Organisation for Economic Co-operation and Development reports that Canada’s home price-to-income ratio has declined since its peak in early 2022, but overall the cost of owning a home has risen 40 per cent more than Canadian incomes since 2015.

The government’s overall plan includes new tenant protection measures, loans for the construction of additional housing and a series of programs to massively increase the number of available affordable housing units.

At this meeting, the government is also expected to discuss immigration and temporary foreign workers, industrial strategies – including for the electric vehicle market -, child care and Canada-US relations.

The proceedings begin with a working lunch on Sunday evening, followed by two days of discussions. On Monday, Cabinet will hear from experts and advisers on housing, immigration and the middle-class economy. They include Kevin Lee, CEO of the Canadian Home Builders’ Association, Sen. Hassan Yussuff, former president of the Canadian Labour Congress, and Maya Roy, former CEO of YWCA Canada.

Tuesday’s discussions will focus on Canada-US relations, as the upcoming presidential election is of great importance to Canada, as the country’s economic stability depends heavily on trade with the US. Canada’s US Ambassador Kirsten Hillman will address Cabinet on Tuesday, as will former ambassadors Frank McKenna and David MacNaughton.

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