Alternative federal budget 2026-27: Affordable housing and homelessness

This is from a larger publication, Alternative federal budget 2026-27: Bridge to independence

Introduction

Year after year, housing affordability remains a top concern for Canadians. Governments at all levels repeatedly promise to prioritize housing investments, yet conditions on the ground remain largely unchanged.

The federal government, under Mark Carney, created a new housing agency, Build Canada Homes (BCH), with the stated goal to “get the federal government back into the business of home building.” Thus far, the BCH is a black box. Some projects have been announced, but little is known about how they were selected, and the agency seems to focus simply on fast-tracking planned projects.

The federal government also introduced a costly GST/HST rebate for new homes that will support the real estate industry but have little impact on affordability, especially for those who need it most. Meanwhile, programs funded through the National Housing Strategy (NHS) and Canadian Mortgage and Housing Corporation (CMHC) are set to expire with no plan to extend them. On housing, the current government is heading in the wrong direction.

Overview

To redirect federal government efforts from corporate welfare to housing affordability, the AFB would give the BCH a clear mandate, immediately begin consultations on renewal of the NHS, and turn the Blueprint for a Renters’ Bill of Rights into strong legislation.

A transparent and focused Build Canada Homes

Thus far, the BCH has adopted what appears to be an ad hoc approach to increasing the supply of affordable homes. No detailed plans or programs have been announced. While the definition of affordability has improved, using median incomes rather than median market rents, which makes it more likely that completed housing will be affordable to moderate-income households, the new agency has not identified targets or outcomes. The agency also seems to negate the importance of supportive and social housing, emphasizing more ambivalent terms like affordable and non-market housing. Similarly, it remains unclear whether BCH will prioritize funding For-Indigenous, By-Indigenous Community Housing Providers.

Researchers at various institutions have documented the housing needs of population groups across the country.¹ The evidence is available. The BCH should use it to set clear targets and outcomes, ensuring that housing built or acquired with federal support meets existing needs. The BCH should prioritize people over profit.

A new and revamped National Housing Strategy

Existing legislation, and specifically Canada’s National Housing Strategy Act s. 5, requires the federal government to renew the NHS, taking into account key principles of a human rights-based approach to housing. Consultations must begin immediately and focus on identifying clear goals for addressing homelessness and core housing needs, and on ways of channelling all available resources to programs that deliver housing that meets documented needs.

The NHS had directed too much effort towards supporting private housing developments, which offered little or no affordability.² While the CMHC should continue low-cost lending to fuel purpose-built construction, the NHS should focus its efforts on programs that have a direct and quantifiable impact on unhoused populations and households experiencing core housing needs. The new iteration of the NHS should also exclude populist and costly tax expenditures that protect homeowners.

A strong and enforceable renters’ bill of rights

The federal government’s most palpable omission in housing has been its unwillingness to protect tenants. Hiding behind the tired excuse of jurisdictional authority, the government has repeatedly refused to intervene in the widely documented profiteering in rental housing and related human rights violations. It has also lacked the courage to address the well-documented, negative impacts of the financialization of housing.³

A strong renters’ bill of rights should establish a standard set of enforceable rights for all renters.

It would include a national maximum cap on rent increases. Like the criminal rate of interest, the cap would not interfere with provincial acts, but would set a legal ceiling, grounded in the federal government’s authority and responsibility to protect Canadians against predatory financial practices.

Actions

The AFB will prioritize investments in community and social housing for people experiencing core housing need and homelessness, upholding Canada’s commitment to the right to housing for those disproportionately affected by high housing costs, including Indigenous Peoples, racialized and immigrant families, women and gender-diverse people, seniors, veterans, lone parents, and people fleeing domestic violence.

The AFB will ensure that BHC prioritize partnerships with community housing providers and governments, and doesn’t become a public-private development matchmaker whose primary role is to entice private developers. It will include specific targets for BCH funding and financing for Indigenous-led housing providers serving urban, rural, and northern communities.

The AFB will triple the Liberal government’s proposed $6 billion investment in new community and co-op housing to $18 billion, building one million new non-market and co-op housing units over the next decade, with 500,000 of these units set aside for rent-geared-to-income.

The AFB will double the investment in the Canada Rental Protection Fund.

The AFB will increase Canada Housing Benefit (CHB) funding by 50 per cent while requiring provinces to report on efforts to improve tenant protections.

The AFB will create a new funding stream to assist the operating costs of supportive complex care housing that provides wraparound support for people experiencing homelessness, people experiencing drug-related harms, and people with voluntary mental health or other support needs. The initial amount of the fund will be $100 million.

The AFB will ensure public land remains in public hands by: allocating $100 million annually to support other governments in developing a continuum of community and social housing on public land; investing $10 billion in multi-year funding to redesign and expand the Public Land Acquisition Fund to include the acquisition of private land for social housing construction.

The AFB will also support a federally backed Tenant Opportunity to Purchase (TOPA) program and right-of-first-refusal legislation, which will give tenants—or community housing providers and a land trust representing them—the right of first refusal to purchase the residential property they occupy before the landlord can sell it on the market.

The AFB will establish a public reporting mechanism to ensure that funding delivered through the Unsheltered Homelessness and Encampment Initiative is directed to communities using a rights-based approach consistent with the federal housing advocate’s recommendations.

The AFB will develop and enact a robust renters’ bill of rights, including protections against displacement and a national cap on rent increases. It will create additional funding conditions for the Canada Housing Infrastructure Fund to advance the bill’s implementation.

The AFB will allocate $4 million annually to the Federal Housing Advocate’s Office at the Canadian Human Rights Commission, double the Tenant Protection Fund to $30 million over five years, and work to ensure that the funding reaches tenant unions acting locally.

The AFB will eliminate preferential tax treatment for Real Estate Investment Trusts, ensuring they are taxed as operating businesses rather than passive investments.

The AFB will implement a vacant land tax to deter landowners from holding idle, developable land.

The AFB will remove the principal residence capital gains exemption and replace it with a lifetime $1 million principal residence exemption. Canadians can make up to $1 million in profits from selling their principal residences over their lifetime and keep those funds tax free. However, once they’ve made a million in profit on buying and selling the houses they live in, they’ll have to pay tax on it.

The AFB will raise the capital gains inclusion rate on the sales of secondary properties to 100 per cent (as with all capital gains, see the Taxation chapter).

The AFB will create a deferrable property surtax on properties valued at more than $1 million and invest the revenue in community and social housing. The surtax would start at a rate of 0.2 per cent on the portion of assessed value between $1 million and $1.5 million, 0.5 per cent on value between $1.5 million and $2 million, and one per cent on assessed value above $2 million. The surtax would be fully deferrable until time of sale and purpose-built rental properties would be exempt. It would also be net of any wealth taxes paid, (see the Taxation chapter).