Ottawa's fall economic statement takes aim at housing with suite of affordability measures
The mortgage cliff that will see more than two million home loans up for renewal over the next two years appeared to weigh heavily in the federal government’s fall economic update.
Unveiled Nov. 21 by finance minister Chrystia Freeland, the update revealed a projected budget deficit of $40 billion for 2023-24, down a shade from the $40.1 billion projected in the spring budget, and was heavily focused on a suite of housing affordability measures.
It included a new Canadian mortgage charter that codifies mortgage relief offered by financial institutions to financially strapped homeowners, as well as relief for some borrowers from a mortgage stress test if they switch banks to renew, a move intended to increase competition among lenders and ease the pain of renewals over the next couple of years in a period of significantly higher interest rates.
The economic update also included a commitment of more than $25 billion in low-cost financial to incentivize the build of more than 71,000 new rental homes in Canadian cities through the Rental Construction Financing Initiative, and a further $13 billion commitment to the National Housing Co-Investment Fund aimed at building 60,000 new affordable homes and repairing 240,000 others.
“Our country needs more homes and we need more of them fast,” Freeland said in the House of Commons as she delivered the economic update.
Economists and industry players said the initiatives are a step in the right direction — but only a start — for Canadians dealing with inflation and facing what are expected to be crushing mortgage renewals at higher interest rates.
“It appears that the federal government is aware of the pressures that Canadians are feeling around either being able to afford to buy a
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