More than 2,000 new housing units could be built in London, Ont., over the next three years as the city became the first in the country to sign a deal under the new national housing accelerator fund on Wednesday.
Prime Minister Justin Trudeau said he was issuing a challenge to other mayors to “step up with their proposals” and “build more homes faster.”
The announcement comes as the Liberals are facing heavy pressure — from Canadians and their political opponents — to respond to a housing shortage that is compounded by two years of high inflation.
The Liberal caucus is meeting in London for a retreat before the House of Commons resumes sitting next week, and Trudeau is expected to get an earful from his MPs about the party’s flagging fortunes in the polls.
The $4-billion housing accelerator program was first announced in the 2022 federal budget but applications weren’t accepted until July.
Trudeau blamed municipalities for the fact it took 17 months to get a single project approved under the program.
“You’d have to ask different mayors why it took so long,” the prime minister said in French.
Trudeau said London was the fastest to respond to the call for ambitious plans that eliminate municipal barriers to getting homes built more quickly. That includes, for example, zoning rules that limit the kind of homes that can be built in specific areas.
London’s proposal, which Trudeau called “absolutely visionary,” allows for building high-density housing developments without the need for rezoning. It would allow four units to be built on a single property even in low-density neighbourhoods.
London will receive $74 million toward the housing projects.
Federal Housing Minister Sean Fraser said the London announcement “is going to be replicated in the weeks and months ahead” and urged municipalities to allow housing near transit and universities.
“If you want the federal government to show up with financial investments that will directly support your ability to build more homes, give us a reason,” Fraser said at the announcement.
“A new standard has been set and we have new expectations.”
The Canada Mortgage and Housing Corp. said Wednesday that Canada will be short about 3.5 million homes by the end of the decade, compared with what’s needed to restore affordability. Trudeau would not commit on Wednesday to a plan to meet that target.
The housing crisis and other affordability issues are expected to be in the spotlight on Parliament Hill this fall, with the Opposition Conservatives blaming the Liberals for the problem and working to convince Canadians they would do a better job if they win the next election.
The Opposition is not the only source of pressure.
Various media reports have quoted backbench Liberal MPs as saying the party isn’t communicating its accomplishments well and that Trudeau isn’t listening to the concerns of MPs who are not in cabinet.
Quebec MP Brenda Shanahan, the Liberal caucus chair, said Tuesday that her fellow MPs are having “very frank” conversations.
Foreign Affairs Minister Mélanie Joly said those talks are crucial.
“We are going to have conversations that are sometimes not always easy, sometimes difficult, but necessary because we are a government that has been in power for eight years now, a government that has faced several crises and each time, we were able to overcome them.”
Earlier Wednesday, Fraser said there are unprecedented measures coming totackle the housing crisis, working with the private and non-profit sectors.
“We’re going to need to advance measures that are going to help change the financial equation for builders who are dealing with a lot of projects that are actually approved but have been put on pause because of a higher-interest rate environment,” Fraser said.
He also said the federal government will “work to change” how long it takes cities to issue zoning permits and find ways to attract immigrants with construction skills to Canada.
Fraser added the government will need to be “investing in innovation, like building homes in factories so we can actually be more productive with the assets that we have, with the investments that we make.”
The Liberals are also trying to signal they are prudent fiscal managers.
An ongoing spending review calls for a $15-billion cut over five years, and a drop of $4 billion each following year. Treasury Board President Anita Anand insisted that won’t affect priorities such as housing, affordability and support to vulnerable Canadians.
“We’re going to continue to be focused on those priorities while making sure that our own fiscal house is in order. And that’s what all Canadians are doing right now,” she said.
Charles Sousa, a Toronto-area MP and Ontario’s former finance minister, said the party needs to balance building more in the suburbs with managing federal spending.
“We have to do more collaboratively with the provinces and municipalities, and we have to find ways to be constructive,” he said.
“We redistribute wealth where necessary, but we have to promote growth; we have to promote economic vitality.”
MPs are meeting in regional groups on Wednesday to touch base on issues their constituents have raised, as well as unflattering polling numbers in surveys the Liberals commissioned this summer.
Yet Vancouver-area MP Ken Hardie claimed his constituents are generally feeling positive.
“We were talking about this last night. Whatever the polls are saying, we’re not hearing it at the doors,” he said.
“We were expecting to run into some heavy weather; some people are upset. Most people aren’t even paying attention.”
Opposition parties say the Liberals are reacting to a crisis they let fester.
The Conservatives pointed to a comment from Liberal MP Arielle Kayabaga, who told media this week: “I haven’t been able to purchase a home.” Kayabaga, who was elected in 2021, receives an annual salary of nearly $195,000 as a member of Parliament.
“It appears that members of the Liberal caucus are just now starting to notice what their constituents have been facing for the past eight years,” the Conservatives wrote in a statement.
The NDP blamed the Liberals and Tories for decades of gutting investments in public housing.
NDP Leader Jagmeet Singh called on Trudeau to waive federal taxes on projects to build affordable housing, while boosting funding to non-profit and co-op housing providers, and help them buy older properties that are often snapped up by developers.
The caucus meeting is taking place in a convention centre with locked doors and heavy security.
On Tuesday, a dozen protesters gathered outside the venue holding flags with expletives seen during the “Freedom Convoy” protests in 2022. Some in that group were seen that evening lighting off fireworks in the vicinity of hotels where Liberal MPs were staying.