Ottawa

Federal transit money for cities now comes with housing strings attached

The federal government is signalling it will require provinces to pony up cash for housing before cities can receive infrastructure funding for projects like transit.

Will apply to $750 million that the federal government announced in February

Thursday's budget lays out a number of plans to help more people find affordable housing, with most aimed at increasing the country's housing supply. (Dayne Patterson/CBC)

The federal government is signalling it will require provinces to pony up cash for housing before cities can receive infrastructure funding for projects like transit.

That new condition will apply to the $750 million that the federal government announced in February to cover the transit revenue shortfalls municipalities were facing due to the pandemic.

Thursday's budget lays out a number of plans to help more people find affordable housing. 

While some measures aim to put more money into people's hands — for example, there's a one-time $500 payment to those struggling to afford housing, as well as a new tax-free savings scheme for first-time home buyers — most of the new money is aimed at boosting Canada's housing supply.

However, the budget indicates that at least some of these federal funds will be contingent on provinces contributing an equivalent amount.

That's not unusual — a number of federal initiatives call for provincial governments to provide matching funds. What is new, though, is that the federal government is tying transit funding to housing.

An Ottawa light rail train travels along the Confederation Line in January. The federal government's housing conditions will apply to $750 million recently announced to cover municipal transit shortfalls due to COVID-19. (Vincent Yergeau/Radio-Canada)

According to the budget document, the government is "leveraging transit funding to build more homes." In order to increase the impact of the $750 million it's promised to cities to help with lost transit fares, the provinces will not only have to match the contribution but "accelerate their work with their municipalities to build more homes for Canadians."

It's not clear exactly how this will work, and the budget was short on details, but it appears to be an attempt by the federal government to force provinces to increase housing stock.

Ricardo Tranjan, a political economist and senior researcher with the Canadian Centre for Policy Alternatives in Ontario, said details will be important with this plan. 

He said what type of housing is built, whether it's for-profit or non-profit, will affect how useful the plan is.

"What we build matters a lot, it's not just building," he said.

He also said this measure won't necessarily bring prices down, and it doesn't help renters.

The new conditions may be applied to future infrastructure programs, as well as existing ones as they're renewed.

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