Federal budget's housing plans get some qualified praise in N.B.

Canada's new federal budget bets big on increasing housing supply, but some say its plan to do so might not be enough for a province like New Brunswick, an economic development consultant says. 

The 2022 budget presented in the Commons on Thursday would allocate $10 billion for Canadians trying to break into an increasingly unaffordable housing market, as well as to some housing-related initiatives to address the lack of affordable units.

One of the budget's most eye-grabbing plans to address Canada's red hot housing market, which saw home prices rise 20 per cent in the past year, was a pledge to double construction of new units per year. 

Increasing the housing supply is particularly needed in New Brunswick, where apartment vacancy rates in some parts of the province have fallen to nearly zero. 

But boiled down, that $10 billion figure might not be enough for New Brunswick, according to Richard Saillant, an economic development consultant in Moncton.

"Overall, my impression of the housing package was that it's headed in the right direction, but that the overall target of doubling the supply of housing over the next decade, with the kind of means that they're putting on the table, is really, it's pie in the sky," he said.

It'll be "extraordinarily hard" for New Brunswick to jump on the federal government's construction bandwagon, he said, because the influx of immigrants — needed, he emphasized, to replace the retiring baby boomer workforce — plus buyers from Ontario seeking more affordable homes, will only increase demand and drive up prices of new units.

Spread out over all the provinces and over several years, and factoring in how many units will actually be created or subsidized through federal funding, Saillant said $10 billion isn't insignificant, but it is insufficient.

"It will help and it's meaningful progress, but it's not on the scale that is anywhere near what's needed," he said.

Saillant said the federal government may have the right priorities, but the reality is that after going deep into the red during the pandemic to provide relief to provinces and citizens, it doesn't have much spending flexibility.

Other highlights from the federal budget include a tax-free first home savings account, as well as doubling the first-time home buyers' tax credit; initiatives helpful for those in a position to save money.

But aside from a one-time, $500 payment for people struggling with housing affordability — which Saillant said could help offset the high inflation in Canada right now — there isn't much in the new budget that offers any immediate relief for low-income earners.

Saillant said New Brunswick has been able to provide some meaningful support to low-income households. The province has expanded its rental assistance program to include those making under $50,000 a year and brought in a rent-increase cap, although just for a year

"I can't see how this measure will not be extended beyond 2022, simply because I expect the market to worsen considerably," Saillant said.

Speaking to media following the tabling of the federal budget, Premier Blaine Higgs said the federal government's long-term housing plan will be beneficial, but he's waiting to see how the details of the funding will play out.

"We don't know how it's going to be administered, how quickly it'll be available, and what it'll mean for each province. So, I think that's where we have to find out the facts and then decide the impact it'll have on New Brunswick." 

Warren Maddox, executive director of Fredericton Homeless Shelters, said he was encouraged to see that the federal government is considering non-profits as funding partners in its 2022 budget.

"This was a good, positive sign for us in shelters and housing," he said.

The budget has earmarked $200 million for affordable housing projects, including $100 million to support non-profits, co-ops, developers, and rent-to-own companies building rent-to-own units.

Maddox said keeping rent caps in place beyond this year would also be helpful in alleviating some of the housing insecurity in New Brunswick, adding that the lower the rents, the less social development and taxpayers have to subsidize.

After reviewing both the recently passed provincial budget, plus the federal budget, Maddox said he feels positive heading into the rest of 2022. No one government or agency can solve New Brunswick's housing challenges, he said, but he added it's good to see that commitment and recognition are there.