Federal economic update includes new funding for housing initiatives


Publishing Date

The federal government released its 2023 Fall Economic Statement with an emphasis on housing announcements that include: $50 million in funding to support municipal enforcement of short-term rentals; new financing for rental construction; new funding for non-profit, co-op, and public housing; and tax changes to support rental housing and to support jurisdictions restricting short-term rentals.

Notably for local governments, the economic statement includes $50 million over three years, starting in 2024-25 to support municipal enforcement of short-term rental restrictions. The money is intended to “support municipalities with strict regulatory regimes that are having a significant and measurable impact in returning short-term rentals back to the long-term housing market”.

Other elements of the federal housing action plan as detailed in the economic statement include:

  • Removing GST from new co-op rental housing, subject to specific conditions.
  • $309.3 million in funding for the Co-operative Housing Development Program to expand co-op housing.
  • An announcement that the federal government intends to deny income tax deductions for expenses incurred to earn short-term rental income, including interest expenses, in provinces and municipalities that have prohibited short-term rentals. Income tax deductions will also be denied for operators that are not compliant with applicable provincial or municipal licensing, permitting, or registration requirements.
  • An additional $15 billion in new loan funding, starting in 2025, for the Apartment Construction Loan Program (formerly the Rental Construction Financing Initiative)
  • An additional $1 billion over three years starting in 2026, to support non-profit, co-op and public housing through the Affordable Housing Fund (formerly the National Housing Co-Investment Fund)