Will The 2023 Federal Budget Include Dealing With Housing Affordability?

The Canadian government recently announced its Budget 2023, with big bucks set to be spent on a variety of initiatives. But how well does the budget deal with the housing affordability issue?

Right now, the average home in Canada costs $662,437, according to CREA. But the bigger cities across the country are pushing that average up, with cities like Vancouver and Toronto averaging $1,123,400 and $1,091,300, respectively.

Rent is also through the roof. Right now, renters are paying sky-high prices in rent, making it just as tough to afford to be a tenant as it is to buy a home. In Vancouver, the average price for a 1-bedroom unit is $2,600, and in Toronto, it's $2,395.

Soaring interest rates, an influx of newcomers to Canada, a lack of adequate housing supply, and raging inflation is putting a ton of pressure on the housing market, causing prices to climb out of reach for many. An increasing number of Canadians are unable to afford a home purchase or rent, leaving them in a dangerous situation that needs to be addressed immediately.

While the federal budget includes some initiatives designed to help Canadians afford the high cost of living, there's not much that directly addresses the specific factors driving the current housing crisis.

How The Federal Budget Is Helping Put More Money In Canadians' Pockets

The 2023 budget is doing something that may help give a little back to Canadians, particularly those in the low- to modest-income bracket:

Grocery Rebate. This rebate is a one-time payment that will give a few hundred dollars to eligible Canadians to put towards the cost of groceries. With the cost of food skyrocketing, any little bit can help.

Dental care. Only certain types of dental care are covered by the government, including emergency visits. But a much wider range of dental services are not covered and must be paid out-of-pocket without an insurance plan. Canadians without dental insurance and fall under the low-income category may qualify for dental care coverage up to a certain amount as part of the 2023 budget. Approximately $13 billion will be dedicated to dental care coverage over the next 5 years.

Make junk fees transparent. There are tons of little extra fees that Canadians are always paying that may not be clearly advertised. For example, things like roaming charges on cell phone plans, unnecessary shipping add-on fees, added concert fees, and excessive baggage fees can all add up at the end of the year. Part of the federal budget is to make these fees more transparent to customers so they know what they're paying from the get-go. 

Programs Recently Put In Place To Tackle Housing Affordability

Besides the newly-introduced Budget 2023 and its initiatives, there have already been a handful of programs put in place to tackle the current crisis in housing:

Cut down on foreign investors. One of the culprits behind the lack of available housing and the jump in home prices is active foreign investors. Many foreign buyers purchase Canadian properties to be used as foreign assets, which has led to speculation and an inevitable increase in home prices.

A new act went into effect on January 1, 2023, which bans non-Canadians from purchasing residential homes for two years to help reduce speculation and the use of Canadian real estate as foreign financial assets.

Limitations on house flipping. Flipping homes may help investors profit in real estate, but it can have a negative impact on the housing market. Sellers will increase their listing prices in response to the increase in price of flipped properties, which artificially inflates housing prices. The government is addressing this by requiring that profits made from flipping properties owned for less than one year are fully taxed.

Tax-Free First Home Savings Account. This new program will allow buyers to save as much as $40,000 tax-free and put that money towards the purchase of a first home.

What Can The Government Do To Curb The Housing Crisis?

While helping Canadians save some money is great, it's simply not enough to help them with their inability to afford mortgage payments or rent. More urgent action is needed, particularly when it comes to housing inventory. There's simply not enough housing to accommodate all Canadians, plus all the newcomers that are seeking a better life in Canada.