The Federal government recently announced¹ another sequel to its “Cash for housing density” program. This latest one called the “Canada Housing Infrastructure Fund” is targeted at provinces. It is even larger than the previous “Housing Accelerator Fund”, which was targeted at municipalities.^{2 3} This program aims to remove both the infrastructure and zoning roadblocks which prevent housing from being built.

It can be tempting to blame municipalities for causing this housing crisis by not doing upzones, but the truth is upgrading infrastructure on former suburban streets is extremely expensive⁴. As we saw from the recent kerfuffle in Ontario over Bill 23, municipalities universally protested upzones over finances more than classic NIMBY issues like shadows and character⁵. The municipalities complained they were not able to afford the infrastructure, low incoming housing and amenities that new neighbors would require⁶. The Canada Housing Infrastructure Fund does a good job of addressing these financial concerns.

Our Municipalities Want Money

Included in the club of Canadian municipalities asking for infrastructure funding is the Montreal Metropolitan Community (MMC) which represents around half the population of the province. The latest CMHC housing report shows Montreal as the metro area in Canada building the least housing, actually building less than last year⁷. This is a catastrophic situation for its large population of renters, guaranteeing steep rent increases in upcoming years⁸. However the region has indicated it wants to build more housing, including more deeply affordable housing, it just needs financial support for basic infrastructure and transit from the province^{9 10 11}.

Money from the government is especially important in Quebec because unlike other provinces large prescriptive “development fees” are not added to developments to cover the cost of upgrades¹². Municipalities in Quebec have generally opted for a policy of higher tax rates and lower fees¹³ with charges on a case by case basis. This system has its merits, but during times of extended rapid development like now, the costs start to outpace the current local taxbase. Current residents are effectively forced to “front the money” for thousands of neighbors who do not currently exist.

The Federal Government Has Municipalities Covered

The federal announcements should be music to the ears of residents of the MMC. It covers many of the critical costs of doing upzoning such as water treatment and solid waste systems¹⁴. This cash injection would free up municipal funding to do other things like transit, policing and parks. Furthermore it would allow municipalities to feel more secure about moving ahead on upcoming projects such as the long delayed Namur-Hippodrome development¹⁵.

The structure of these programs so far is to make a simple deal. To access this money for infrastructure (Canada Housing Infrastructure Fund), affordable housing (Canada Rental Protection Fund¹⁶) or soon, transit (As Yet Unnamed¹⁷) cities must upzone and make it easier to build new housing.

The program does this through asking directly for “four units as-of-right” and to “allow more ‘missing middle’ homes, including duplexes, triplexes, townhouses, and other multi-unit apartments”. The upcoming transit funding continues on this theme by asking to remove parking minimums and allow high density development within 800 meters of rapid transit stations¹⁸.

Provincial Whining

The reception of these programs has been mixed. The government of British Columbia has already basically met the criteria for the transit fund and is in a situation where they will be able to get cash in their pocket FAST for things they are already doing¹⁹. Good job BC!

In Ontario the provincial government has been complaining about the federal program “Telling us what to do”, although the program isn’t forcing anyone to do anything. But luckily for Ontario’s cities, if the province doesn’t want to sign on, the money will be offered directly to the cities through the Housing Accelerator Fund²⁰. No cities have to sign onto that if they don’t want to, but enough probably will to do a lot of good.

However, Quebec’s municipalities which are desperate for funding are going to have to wait and hope for the province. This is because Quebec’s provincial law prevents municipalities from negotiating deals with the federal government²¹. If the government of Quebec does not strike a deal with the federal government, municipalities in Quebec will not get a chance at bat. The money will go into the Housing Accelerator Fund and all be spent elsewhere in Canada.

The Point

The government of Quebec voluntarily took on the responsibility of negotiating on our behalf with the federal government in the name of Quebec’s municipalities. Now those municipalities are saying they want to build housing, but they can’t do this without money for the necessary infrastructure. It's time for the province to prove it can handle this responsibility.

It isn’t accurate to accuse this optional program of being some external imposition²². If anywhere in Canada inspired a program to build thousands of fourplexes, it is Quebec. This program is an opportunity to do what we do best. The government of Quebec should sign the deal and let Montreal get to work building the type of medium density housing that it is already famous for.