Trudeau signs $59M deal with Vaughan, Ont. to build 1,700 homes over three years

Prime Minister Justin Trudeau says his government has struck a $59 million deal with the city of Vaughan, Ont. to fast-track the construction of thousands of new housing units over the next three to 10 years. 

PM says deal also will help build 40,000 more homes over coming decade

Prime Minister Justin Trudeau, in profile, outside
New construction is seen behind Prime Minister Justin Trudeau during a housing announcement in Vaughan, Ont. on Thursday, Oct. 5, 2023. (Nathan Denette/The Canadian Press)

Prime Minister Justin Trudeau says his government has struck a $59 million deal with the city of Vaughan, Ont. to fast-track the construction of thousands of new housing units over the next three to 10 years.

The deal is the second such agreement the Liberal government has signed under its Housing Accelerator Fund. 

According to a media statement, the funding will "fast-track over 1,700 new housing units" over the next three years and "help spur the construction of more than 40,000 homes" over the next decade.

"This is going to be really powerful here in Vaughan, but we also need to see this kind of thinking, this kind of leadership, right across the country," Trudeau said in Vaughan Thursday.

Vaughan Mayor Steven Del Duca described the announcement as "phenomenal" for the people of his city.

"Thank you so much for making this investment in our city ... to help make sure that we have more affordable and accessible housing options for the people that call this incredible community home," Del Duca said.

Trudeau said the agreement will allow for the construction of high-density housing near public transit, including both GO train and subway stations.

The deal will also prioritize the building of apartments and affordable housing, fix "outdated permitting systems to speed up development," said a government statement.

"This will literally mean that our extraordinary team at Vaughan can help improve our system [and] deal with applications quicker and more seamlessly," Del Duca said.

The Housing Accelerator Fund

The Housing Accelerator Fund, first announced during the 2021 election campaign and introduced in the 2022 federal budget, allocates $4 billion until 2026-27 to encourage more homebuilding in cities.

The Housing Accelerator Fund's stated objective is to build 100,000 more units across the country than would have been built without the fund, by streamlining land-use planning and development approvals. 

Municipalities with populations of more than 10,000 can apply by pitching initiatives to increase the annual rate of home building in their cities by at least 10 per cent.

Last month, Trudeau announced the first deal under the Housing Accelerator Fund with the City of London, Ont. Under that deal, the city got $74 million to help build 2,000 new homes over three years.

A day after that announcement, Trudeau said his government would be eliminating the GST from the construction of new rental apartments to spur new development.

Canada's housing need

When asked if his government's efforts to tackle the housing crisis are coming too late to make a significant difference, Trudeau defended his government's record.

"We have been investing over the past many years in a national housing strategy that has delivered homes for two million Canadian families, but there's lots more to do," he said.

Trudeau accused Conservative MPs of holding up legislation in the House of Commons to strip the GST from rental construction.

"We're moving forward as quickly as possible on this bill ... the Conservative Party of Canada is choosing to obstruct debate on this … We know we need to deliver this quickly," Trudeau said. 

Deal with Quebec for $900M in funding 

Speaking later in the day, Housing Minister Sean Fraser said there re too many communities in Canada that have made it illegal to build "the kinds of homes that are going to help us get to where we need to be."

Fraser said cities need to build up housing density.

He also said his government is working to finalize Housing Accelerator Fund deals with Calgary, Edmonton, Halifax and Brampton, Ont.

"We're seeing ambitious cities step up with extraordinary growth plans," he said. 

He also said discussions between Ottawa and Quebec on unlocking $900 million in accelerator funding might soon be completed. 

"We have a little bit of work left to do to finalize the details, but I strongly sense we want the same thing," he said. 

Deputy Prime Minister and Finance Minister Chrystia Freeland said the Liberal government's new Tax-Free First Home Savings Account, rolled out in April of this year, has seen significant uptake.

"More than 150,000 Canadians have already opened their Tax-Free First Home Savings Account," she said.

The program allows Canadians to contribute up to $8,000 per year to the accounts, with a maximum lifetime contribution limit of $40,000.

Contributions to the account provide people with tax rebates. Growth in the accounts is not taxed and money can be taken out tax-free for a down payment. 

Overall home construction in 2023 flat: CMHC

Earlier Thursday, the Canada Mortgage and Housing Corporation (CMHC) issued a report showing that while new home construction inched up by one per cent in the first half of this year, that increase was largely driven by growth in Toronto and Vancouver, while homebuilding almost everywhere else contracted.

Of the six cities examined, CMHC said, Vancouver and Toronto recorded growth in housing starts over last year of 49 per cent and 32 per cent respectively. Montreal saw 58 per cent fewer housing starts compared with the first half of 2022, Edmonton and Ottawa saw decreases of 29 per cent and 18 per cent respectively, and Calgary's housing starts were flat.

The booming construction in Toronto and Vancouver can be attributed to projects that got started a while ago, before interest rates rose, said Kevin Hughes, CMHC's deputy chief economist.

Last month, CMHC released a new report estimating that another 3.5 million housing units will be required by 2030, over and above the number of units expected to be built by that time, in order to restore housing affordability to 2004 levels. 

That report said that in 2003-2004, an average household in Ontario spent about 40 per cent of its disposable income to cover the annual costs of owning a house, while that figure was 45 per cent in B.C. By 2021, that had risen to 60 per cent.


Peter Zimonjic

Senior writer

Peter Zimonjic is a senior writer for CBC News. He has worked as a reporter and columnist in London, England, for the Daily Mail, Sunday Times and Daily Telegraph and in Canada for Sun Media and the Ottawa Citizen. He is the author of Into The Darkness: An Account of 7/7, published by Random House.