Feds seek to convert dozens of government properties for affordable housing

The federal government has added 56 properties to a new public lands bank of locations that are suitable for long-term leases so developers can build housing, a move the Housing Minister says will help boost the supply of homes Canadians can afford.

Sean Fraser made the announcement Sunday in Halifax just ahead of a three-day cabinet retreat intended to prepare for the upcoming fall sitting of Parliament.

“Making public lands available for home construction is going to reduce the cost of construction and in turn reduce the cost of living,” Fraser said.

Former military bases, Canada Post sites and federal office buildings are among the properties currently included in the public lands bank, many of which were previously set aside for sale as they are no longer in use.

The new plan is to offer most of them for long-term lease rather than one-time sale to keep the lands in public hands and ensure housing built on them remains affordable.

The current list includes properties in 28 municipalities in seven provinces but will grow over time through an ongoing review of underused or vacant federal land and buildings.

Five properties — first identified in the April budget — are now moving into the development phase with the government asking developers for expressions of interest or requests for proposals.

Four of them are on former military bases in Calgary, Edmonton, Toronto and Ottawa, while the fifth is the site of a former National Film Board building in Montreal.

The new land bank and an accelerated plan to turn federal property into housing was part of the Liberals wide-ranging housing plan announced in April, with some details released in the spring budget.

Housing will be a key issue at the cabinet retreat as Canadians continue to grapple with high costs and limited availability.

The annual end-of-summer cabinet session comes three weeks before Parliament returns for the fall sitting and is likely the last such event for this cabinet before the next election.

It may be the last real chance this government has to reset itself with voters before asking them for another mandate.

The meeting may be overshadowed by lasting tension with the country’s railways following a work stoppage that began on Thursday and is set to end on Monday. Labour Minister Steven MacKinnon directed the Canada Industrial Relations Board to begin a binding arbitration process with the railways and the Teamsters union representing 9,300 workers at Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC).

The Teamsters union has vowed to fight the decision in court, and president Paul Boucher said Sunday he was en route to Halifax with other union leaders to “protest this decision at the Liberal caucus retreat.”

He is asking for members in the area to join the protest.

The dispute is the latest in a string of supply-chain and labour issues the Liberals have or continue to face including at ports, railways and airlines.

Post-Covid-19 supply chain disruptions contributed heavily to high inflation that has also led to an affordability crunch in Canada and many places around the world.

Canada’s housing crisis — driven by high interest rates and rapid immigration that exceeds housing supply growth — is another big factor causing widespread dissatisfaction with the Liberal government.

A year ago, a cabinet retreat in Charlottetown had a heavy focus on housing as rapid immigration and lacklustre housing starts drove availability down and prices up.

But the Liberals left that retreat without anything concrete to announce, and their poll numbers continued to suffer as they failed to convince Canadians they have the recipe to fix a problem that has become critical under their watch.

This time around they intend to put plenty in the window for Canadians including Sunday’s housing announcement.

Former Liberal chief of staff Marci Surkes, now the chief strategy officer at government relations firm Compass Rose, said housing will be central to this retreat and the Liberal agenda going forward.

“Frankly the government has certainly made significant policy moves and investments since last year and some of them are beginning to bear fruit, but the reality is that the focus on supply needs to remain in place,” she said. “There is no real relief yet.”

The government intends to spur construction of 3.87 million new housing units in the next seven years.

It’s estimated between 3.1 million and 3.5 million new units are needed by 2031 to solve the housing crisis that has left Canada with some of the least affordable housing among developed countries.

The Canada Mortgage and Housing Corporation warned earlier this year that the housing affordability crunch is likely to last into 2026, though housing starts may begin to improve in the coming months thanks to falling interest rates.

Housing demand spiked in Canada in the first two years of the COVID-19 pandemic. Between March 2020 and March 2022, the average price of a home in Canada grew more than 50 per cent to $835,000. That has since fallen, as high interest rates drove up borrowing costs and fewer people were in the market to buy a home.

Average rents are up nearly 25 per cent in the last five years.

The Organization for Economic Co-operation and Development reports the home price to income ratio in Canada has fallen since it peaked in early 2022, but overall the cost of a home has increased 40 per cent more than Canadian incomes have since 2015.

The government’s overall plan includes new protections for tenants, loans to build more apartments and a spate of programs to massively expand the number of affordable units available.

This retreat is also expected to see the government discuss immigration and temporary foreign workers, industrial strategies including for the electric vehicle market, child care and Canada-U.S. relations.

The meetings start on Sunday evening with a working dinner and a discussion about global issues with Jake Sullivan, national security advisor to the U.S. government.

Two full days of meetings will follow. Monday will see cabinet hear from experts and advisers on housing, immigration and middle class economics. They will include Kevin Lee, CEO of the Canadian Home Builders’ Association, Sen. Hassan Yussuff, the former president of the Canadian Labour Congress, and Maya Roy, the former CEO of the YWCA Canada.

Tuesday’s discussions will shift to Canada-U.S. relations, with the upcoming presidential election holding major significance for Canada which relies heavily on U.S. trade for its economic stability. Canada’s U.S. Ambassador Kirsten Hillman will address the cabinet Tuesday, as will former ambassadors Frank McKenna and David MacNaughton.

This report by The Canadian Press was first published Aug. 25, 2024.

— With files from Lyndsay Armstrong in Halifax.