HOUSING AND PARLIAMENTARY ACTION
Political and Social Affairs Division
Although the Constitution grants the provinces authority
over housing policy and programs, all levels of government in Canada are involved in
housing. The policies and programs that have evolved address the quantity, quality and
cost of housing.
Prior to 1970 virtually all housing policy was federal.
Government programs assisted a little over one-third of housing starts, fewer than 5% of
which were directed toward low-income housing. During the 1970s, federal assistance
increased to 40% of housing starts. By 1986, government programs had dropped to 14% of
housing completions and 8% of this federal assistance was directed toward low-income
Three federal Acts passed in the 1930s were intended to
increase housing stocks so as to ease shortages and to promote job creation through
stimulating the private housing market. The Dominion Housing Act (1935), the first
national housing legislation, provided $20 million in loans that helped to finance 4,900
units over a three-year period. The 1937 Federal Home Improvement Plan subsidized
the interest rates on loans for housing rehabilitation to 66,900 homes. The 1938 National
Housing Act (NHA) helped to enable the creditworthy to buy houses, make low-income
housing sanitary, and modernize existing housing stock. The Act also provided for
construction of low-rent housing.
During the Second World War, the federal government created
a Crown corporation, the Wartime Housing Corporation, which built 45,930 housing units
over eight years and assisted in the repair and modernization of existing houses. In 1946
its assets passed to the Central Mortgage and Housing Corporation (CMHC), later the Canada
Mortgage and Housing Corporation, to provide home buyers with mortgages at favourable
rates. Today CMHC is the main agency responsible for administering housing policy at the
In 1949, the NHA was amended to provide for joint
federal-provincial programs to construct publicly owned and provincially managed housing
for low-income families, the disabled, and seniors. In 1954, the federal government began
insuring loans for mortgages made by private investors against borrower default.
Amendments were made to the Bank Act to enable chartered banks in Canada to lend
money for mortgages and to allow the federal government to reduce its involvement in
lending. In 1964, the federal government introduced legislation that provided for the
transfer of loans of up to 90% of the cost to the provinces for the construction of
provincially owned public housing. The legislation also authorized CMHC to provide loans
directly to municipal and private non-profit corporations.
In Canada, almost all social housing units are owned by the
provinces, municipal governments or their agencies. The federal role in social housing
consists of long-term contractual commitments to share operating costs with the provinces.
A 1984 CMHC review defines the objective of social housing policy as being to "assist
Canadians whose income is insufficient to gain access to adequate housing by encouraging
and supporting in conjunction with the provinces, municipalities and their agencies, the
provision of low- and moderate-income public housing and by encouraging the establishment
of non-profit and co-operative housing programs." In general terms, public housing is
rental housing at less than market rent that is aimed primarily at low-income households
comprising the working poor, welfare recipients and poor seniors. In 1994, the federal
government spent $1.9 billion on more than 661,000 social housing units, including public,
low rental, rural, native, non-profit, co-operative and rent supplement accommodation.
During the 1970s, incentives to stimulate home buying and
home and neighbourhood rehabilitation were introduced. They included tax-exempt Registered
Homeownership Savings Plans, the Assisted Homeownership Program, and amendments to the Income
Tax Act that excluded principal residences from capital gains tax. Federal funds were
also directed toward residential rehabilitation assistance, neighbourhood improvement and
home insulation programs. The rehabilitation and home improvement funds assisted
homeowners and landlords to upgrade 315,000 homes between 1974 and 1986. It was also
during the 1970s that all provinces established housing departments and began taking on a
stronger role in housing policy development and priority setting.
The public housing constructed prior to the 1970s was 100%
geared to income. The result was the formation of ghettos of poverty that were unpopular
with both tenants and local communities. Amendments to the NHA introduced in 1973 provided
financial assistance for new home buying, loans for co-operative housing, and low-interest
loans of up to 100% of a projects value for municipal and private non-profit
housing. One of the thrusts of the legislation was to integrate different income levels
within housing projects so as to encourage dispersion of low-income families within the
community. One of the consequences of the income-integrated projects, however, was that
two-thirds to three-quarters of the housing went to middle-income families while many
families in need were not accommodated.
At the beginning of the 1980s, three temporary federal
programs were introduced to assist middle-income families. The Canadian Home Ownership
Stimulation Program provided grants to home buyers. The Canada Mortgage Renewal Plan
assisted homeowners in paying the portion of their mortgage and property tax that, as a
result of mortgage renewal at higher interest rates, caused their payments to exceed 30%
of their income. The Graduated Payment Mortgage Plan helped homeowners to reduce their
monthly mortgage payments.
During the first five years of the 1980s, 1.7% of total
federal government budget went to housing. During the latter half of the decade, this
figure dropped to 1.4%. Of all the program areas of the federal government, housing has
had and continues to have one of the smallest expenditures. Most of the decline in housing
expenditures during the 1980s was in market housing (e.g. home ownership and rental
construction assistance) rather than social housing programs. Over 90% of federal housing
funds are spent on subsidizing social housing projects.
In 1986, the federal government introduced its New Housing
Directions, which made two changes related to public housing policy. Social housing was
directed to households in "core need" (a shift away from mixed-income housing
projects), and the delivery of social housing programs was devolved to provincial and
In early 1992, the federal government tabled a
constitutional proposal calling for an end to its financial involvement in a number of
areas of provincial jurisdiction (for example, tourism, mining, urban affairs and
housing). Experts in the housing field viewed this development as a blow to social housing
programs. In the budget of February 1992, the federal government terminated its federal
co-operative housing program. Over its lifetime, the program had built nearly 60,000 homes
for low and moderate-income Canadians. A little over a year later, in its April 1993
budget, the federal government froze expenditures for social housing and restricted its
future financial support in this area to 1993 levels.
The 1995 federal budget proposed a 6% ($128-million)
decline in CHMC spending by fiscal year 1997-98. Because more than 90% of federal support
for housing is directed at social housing programs, this sector will be the one most
affected by the reduction in federal funding.
1935 The Dominion
Housing Act, the first national housing legislation, provided $20 million in loans and
helped finance 4,900 units over three years.
1937 The Federal Home
Improvement Plan subsidized the interest rates on loans for housing rehabilitation to
1938 The National
Housing Act provided assistance to home buyers, helped to make low-income housing
sanitary, and provided for the modernization of existing stock.
1946 The assets of the
Wartime Housing Corporation passed to the Central Mortgage and Housing Corporation (CMHC),
later the Canada Mortgage and Housing Corporation, to provide home buyers with mortgages
at favourable rates.
1949 The National
Housing Act was amended to provide joint federal-provincial programs to construct
1954 The federal
government began insuring loans for mortgages made by private investors against borrower
default and the Bank Act was amended to enable chartered banks to lend mortgage
1964 The federal
government introduced legislation that allowed for loan transfers of up to 90% of the cost
to the provinces of constructing provincially owned public housing.
1969 The federal Rent
Supplement Program provided low-income households in private rental accommodation with the
difference between market rent and 25% of income.
1973 Amendments were made
to the National Housing Act to provide financial assistance for new home buying,
loans for co-operative housing, and low interest loans for municipal and private
non-profit housing. One of the thrusts of the amendments was to integrate different income
levels in social housing projects.
1974 The Rural and Native
Housing Program provided new housing and renovation assistance for low-income native and
non-native people living in rural areas and towns with populations of 2,500 and less.
1976 Habitat, the United
Nations Conference on Human Settlements, was held in Vancouver. Governments collectively
proclaimed the international communitys commitment to promoting decent shelter and
living conditions throughout the world.
1986 The federal
government introduced its New Housing Directions, which, among other things, directed
social housing programs to households "in core need" and devolved the delivery
of housing programs to the provinces and territories.
1987 The UN International
Year of Shelter for the Homeless focused attention on the homeless and on the need for
national and international efforts to improve the shelter and neighbourhoods of the
1989 The federal Housing
Minister indicated that he hoped to have a plan in place by fall 1989 to assist first-time
home buyers. The proposal would reduce to 5% the current 10% down-payment required for
homes purchased with the backing of CMHC.
1990 In its February 1990
budget, the federal government cut the amount of new money promised for low-cost housing
by $51 million over two years.
1992 In its February 1992
budget, the federal government terminated the federal co-operative housing program. Over
its lifetime, the program built nearly 60,000 homes for low- and moderate-income
1993 In its April 1993
budget, the federal government announced that it would not increase its funding for social
housing beyond the current level of $2 billion per year.
1995 The 1995 federal
budget proposed a 6% or $128-million decline in CHMCs spending by fiscal year