What you need to know about Trudeau's new 'plan to solve the housing crisis'

The federal government has unveiled what it is calling their "plan to solve the housing crisis," outlining both steps they intend to take, as well as issuing a callout to other levels of government and homebuilders to roll up their sleeves.

The 28-page plan includes billions of dollars in spending commitments and is divided into three pillars: building more homes, making it easier to own or rent a home, and helping Canadians who can't afford a home. 

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"Today we are releasing the most comprehensive and ambitious housing plan ever seen in Canada. It builds on the sizeable investments we've made over the years and it goes a lot further," Prime Minister Justin Trudeau said Friday, backed by his lead ministers on the file and dozens of hard-hat-donning students and apprentices at the College of Carpenters and Allied Trades in Vaughan, Ont.

"It's a plan to build housing, including for renters, on a scale not seen in generations. We're talking about almost 3.9 million homes by 2031."

Over the last few weeks the Liberals have been rolling out a series of new commitments aimed at younger Canadians who are having a hard time entering the housing market.

Those pledges are included in this new national housing plan, as are a series of new policy ideas.

Here's what you need to know.

How do they plan to build this many new homes?

First, let's break down Trudeau's "3.9 million homes" pledge.

According to the documents, the real commitment is a minimum of two million net new homes, on top of the Canada Mortgage and Housing Corp.'s forecast of 1.87 million being built by 2031.

One of the main ways the Liberals say they will build more homes is by bringing down the cost of homebuilding and making it easier for homebuilders to manufacture homes.

Related to this commitment, the plan includes a series of tax and policy reforms as well as loans —including the $15-billion Apartment Construction Loan Program — to incentivize builders to get more projects going. This initiative would, of course, build new housing units, not standalone homes. 

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They say they will expand the easing of Goods and Services Taxes on rental housing, to student housing builds, and offer billions to help build new housing-related infrastructure such as waste and water systems. 

And, as part of a new "industrial strategy for homebuilding," the federal government is going to change the national building code, introduce a standardized housing design catalogue, and launch a new fund to support innovative technology that makes it easier to build modular and prefabricated homes. 

Another way the plan proposes to build more homes is by launching a "public lands for homes" strategy that will open up surplus and vacant federal government land across Canada to be used to construct new housing units or subdivisions.

Scaling up building to this degree will require more skilled workers. With this in mind, the federal government plans to roll out new efforts to attract and train more post-secondary graduates to enter the trades.

How do they plan to make it easier to own or rent?

There will be more homes, but until they are built, many Canadians will still be renting as they try to save up. What about them?

In this plan, the Liberals are vowing to launch a tenant protection fund for legal services and tenants' advocacy groups "to better protect tenants against unfairly rising rent payments, renovictions, or bad landlords." Relatedly, a new "Canadian Renters' Bill of Rights" is in the works which will include a national standard lease agreement. 

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The federal government will be changing the rules to allow rental payment history to improve credit scores, helping those with a good rental record to qualify for a mortgage and extending the mortgage amortization rate to 30 years for new buyers buying new builds.

And, the existing "Home Buyers' Plan" withdrawal limit will be increased by $25,000. That means the current $35,000 eligible buyers can withdraw tax-free from their RRSP to purchase their first home is being boosted to $60,000.

How do they plan to help those who can't afford housing?

All of this considered — increasing supply to help improve affordability while offering new rule and savings aids — not all Canadians will be able to afford a home. What are the Liberals offering for them?

According to this new plan, the federal government also intends to take steps to create more affordable rental housing for students, seniors, and other communities, while vowing more work to tackle homelessness.

This includes the pre-pledged $1-billion "Affordable Housing Fund" to build more affordable housing and $1.5-billion Canada Rental Protection fund meant to preserve affordable rent prices by helping finance the purchase of affordable rental buildings that go up for sale. 

"We can't forget that we have a responsibility to help some of the most vulnerable in this country. We're putting additional investments on the table to build out affordable housing, because the cause of homelessness is not a person's family history. It's not just mental health or addictions. It's a lack of adequate affordable housing," Housing Minister Sean Fraser said Friday.

What has the reaction been to the plan?

The Liberals aren't the only national party proposing ways to tackle Canada's housing crisis. For months, both Conservative Leader Pierre Poilievre and NDP Leader Jagmeet Singh have been calling on Trudeau to do more, and offering their own plans as a pitch to prospective voters.

Reacting to the new plan, Conservative MP and housing critic Scott Aitchison said this national housing plan is coming eight years too late.

"Trudeau's vanity announcements and billion-dollar photo ops don't change the fact that his strategy has doubled housing costs over the last eight years," he said in a statement.

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NDP MP and housing critic Alexandre Boulerice said that Trudeau has contributed to the frustrations Canadians are feeling about housing affordability by "delaying measures to keep housing affordable."

"Under the out-of-touch Liberals, rent doubled and for every affordable home built, we lose 11. A recent report by the Parliamentary Budget Officer revealed that Trudeau's housing plan is expected to leave Canadians short 1.2 million homes by 2030. Canadians can't trust the Liberals to fix the problem they created," Boulerice said.

As for how the document is going over with stakeholders, some are welcoming the package of ideas as having the potential to materially impact the housing crisis, while others are offering a reality check on what it will take to turn the current housing situation around.

"I don't know if it's going to make it more affordable. I think it will make homeownership more achievable. There is a slight difference there," GTA mortgage broker Mary Sialtsis said. "My concern is more that it's being restricted to new construction homes, which sometimes can mean that they're buying now and not taking possession for four or five years. Whereas you know, we have a chronic housing shortage that's quite severe in major urban centres. People need homes now."

Mike Moffatt, who the Liberals have directly consulted in recent months on their housing plans and was one of the authors of the 2023 National Housing Accord, said the steps proposed will make it more affordable to rent or buy a home, "in the coming years," while noting there is more to be done. 

"A lot of the stuff that you see in today's plan is based on things that have worked in the past," Canadian Alliance to End Homelessness president and CEO Tim Richter said in an interview on CTV News Channel Friday. "There's nothing here in the short term that's going to support Canadians that are struggling with their rent at this moment, but over time, this will go a long way."

While he called it an important document with achievable commitments, he noted that the current housing landscape in Canada took decades to get to where it is now, and will take much more than government dollars to rectify.

"You need to find a way to get private investment … get the investors investing and the builders building," Richter said. "I'm hopeful that the market is going to respond favourably to what they see today."

How are the feds planning to get around the provinces?

You may have seen over the week or so of smaller teaser announcements leading up to this release, that many of the federal government's housing commitments require provincial cooperation and some provinces are already indicating plans to not buy in.

So what happens then? Well, it's possible Canadians in some provinces won't see some of these measures as a result of this tension. Though, Trudeau has indicated in some cases Ottawa is more than happy to go around a resistant provincial government to offer funding directly to municipalities.

"We are there to work hand-in-hand, in full respect with those provinces who want to solve the problem and ask those provinces that don't want to solve the problem, to just get out of the way," Trudeau said.

"It seems like it was only a few months ago that I pointed out quite accurately, that the federal government doesn't have a whole lot of direct carriage of housing… And over the following weeks and months we heard from a cavalcade of premiers saying 'the federal government needs to step up more,'" Trudeau said. "So we are. Provinces should be careful what they wish for."

As the document explicitly notes in its back pages, various housing responsibilities belong to different levels of government and so in order for this whole vision to become a reality, the Liberals are really pressing for a collective "team Canada" approach.

Fraser stated Friday that the Liberals want all levels of government to match their "ambition," by playing their part. This would include adopting faster permitting processes, allowing more permissible zoning and legalizing more kinds of housing.

What national buy-in will be found, and how the political and economic landscape will shift over the nearly decade it's being projected to take for this plan to become a reality, remains to be seen.