The Government of Canada announced this month that it has launched Build Canada Homes, a new federal agency that will build affordable housing at scale. At the centre of the government’s plans, the use of factory-built homes is expected to catalyze the creation of an “entirely new” Canadian housing industry.
The announcement states that Build Canada homes will be capitalized with an initial $13-billion to enable financing, provide land and help builders get big projects off the ground. Canada Lands Company will be transferred under the Build Canada Homes portfolio, giving the project access to the government’s land portfolio, including properties suitable for housing.
“Build Canada Homes will deploy capital, create demand and harness innovative housing technologies to build faster and more sustainably, 365 days a year. Build Canada Homes will place an intense focus on using cost-efficient and modern methods of construction such as factory built, modular and mass timber. Through bulk procurement and long-term financing, Build Canada Homes will mainstream these advanced methods of construction,” the government states. They add that building timelines are expected to be cut by 50 per cent, while costs are expected to come down 20 per cent.
A rental protection fund worth $1.5-billion, meanwhile, is expected to acquire at-risk rental apartment buildings to preserve existing housing supply. Build Canada Homes is also planning to deploy $1-billion to build transitional and supportive housing.
“Build Canada Homes will scale up housing construction and build an entirely new Canadian housing industry,” they add. “Canada’s new government is relentlessly focused on bringing down housing costs. Central to that mission is rapidly scaling up the supply of homes,” Prime Minister Mark Carney is quoted as saying.
Build Canada Homes, currently a special operating agency within Housing, Infrastructure and Communities Canada, will evolve into a standalone federal entity reporting to the Minister of Housing and Infrastructure in the new year, “at which point the federal government will re-evaluate early successes and consider additional long-term funding as necessary.”
Insurers willing to play a key role
In response to the consultation about the launch of Build Canada Homes, the Canadian Life & Health Insurance Association (CLHIA) urged the government to see insurance industry players as long-term investors willing to play a key role in scaling up infrastructure projects, including affordable housing.
“The need to enhance investments in infrastructure, especially housing infrastructure, is more urgent than ever. There is a significant opportunity for institutional investors, such as those in the life and health insurance industry, to finance the federal government’s efforts to scale up investment in affordable housing.”
Climate resilient infrastructure
Following that, the CLHIA also encouraged the government to create the conditions necessary to incentivize private investment in climate resilient infrastructure to protect Canadian homes.
“Public funds should not be used to finance infrastructure projects that could be financed by the private sector,” they write.
“To leverage our industry’s investment capacity, we recommend that Build Better Homes leverage long-term financing structures to bring in the life and health insurance industry’s sustainable debt capacity to finance affordable housing. This can be accomplished by leveraging federal land and allowing private sector consortiums to bid for the opportunity to design, build, maintain, operate and finance affordable housing on behalf of the Government of Canada.”
