The Parliamentary Budget Officer (PBO) has released an updated assessment of spending on housing affordability and the sufficiency of that funding to achieve the overall target of the federal government’s National Housing Strategy (NHS).
The PBO’s latest report, Federal Spending on Housing Affordability in 2024, estimates that there are currently 2.4 million households in core housing need. This number is projected to rise to 2.6 million by 2027, which represents an increase of about 926,000 households compared to the start of Canada’s NHS in 2017. The overall target of the NHS is to remove 530,000 households from housing need by 2027-28.
“The increase in core housing need for homeowners is driven by higher interest rates,” explains Yves Giroux, PBO. “While the slow adjustment of the housing stock to higher immigration has increased the number of renters in core housing need.”
The report also finds that Canada’s NHS programs have helped to mitigate the rising number of households in core housing need.
“Without NHS programs, we estimate there would be about 78,000 more households in core housing need by 2027,” adds Mr. Giroux. “Most of that reduction is attributable to federal contributions towards the fiscal capacity of provinces and territories to deliver rent-geared-to-income housing to low-income households.”
Over the 10-year term of the NHS from 2018-19 to 2027-28, the federal government plans to spend an average of $6.1 billion annually on programs to address housing affordability. This represents a 50% increase in the purchasing power of federal spending compared with the prior 10 years. When also including tax expenditures, the PBO estimates the federal government is spending a total of $17.5 billion per year to support housing affordability.