Fraser warns cities about Poilievre’s plan to cut housing deals

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OTTAWA — Housing Minister Sean Fraser is asking around 140 municipalities to speak out about his Conservative opponent’s pledge to cut a federal housing program, a promise which one mayor says has raised questions about its impact on existing deals. 

Conservative Leader Pierre Poilievre, who has dominated the Liberals in public opinion polls for more than a year, announced last week that if Canadians were to elect his party, he would tackle housing affordability by slashing the GST on home purchases under $1 million.

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He pledged that a future Conservative government would pay for it by cutting the Canada Housing Infrastructure Fund as well as the Housing Accelerator Fund, the latter of which he noted has around $3 billion that has yet to flow.

The federal government says what Poilievre is talking about is cash Ottawa has committed to provide cities through deals struck under the $4-billion program, which promises to give municipalities housing money in exchange for local officials reforming zoning and other bylaws to speed up construction. Roughly $1.2 billion of that program has already been doled out.

Under existing agreements, municipalities must provide the Canadian Mortgage and Housing Corporation updates on how many building permits they issue, which could result in funding being held back if officials determine local governments are not meeting their agreed-to targets.

On Monday, Poilievre’s office confirmed that the cash Ottawa has committed to provide municipalities for years to come, but has not yet flowed, would be cut under his proposal. Last year, the Conservative leader unveiled his own approach for incentivizing cities to speed up housing construction, pledging to give those that do a “building bonus” and to levy a penalty against those who fail to meet certain targets.

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Under the existing accelerator program, the federal government has struck 178 agreements with 140 municipalities, 37 Indigenous communities and one for the province of Quebec.

In letters sent to each of those municipalities last week, Fraser warned how the money Ottawa has promised them is now at risk under Poilievre’s pledge.

“I would also encourage you to take this opportunity to inform members of your community about the impact this cut would have to your plans to build more homes,” Fraser wrote in one such letter to Markham, Ont., Mayor Frank Scarpitti.

“Please respond to me in writing with your feedback on this proposal by November 8, 2024.”

In Markham’s case, Fraser cites how the existing deal would see Ottawa provide it with $58 million over three years. City officials have said that money would be paid out in instalments of $14.7 million, the first of which has been received, according to a June document.

London, Ont., Mayor Josh Morgan, who chairs the Big City Mayors’ Caucus with the Federation of Canadian Municipalities, said Poilievre’s proposal raises questions about how it “would work in practice.”

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His was the first city to strike a deal with Ottawa under the accelerator program.

“Cities like London and others have existing deals with the federal government to produce tangible results, and we expect to be measured on producing those results,” he said in a recent interview.

“I think the questions are mainly around how would this actually play out with existing contracts and existing commitments we make. There would be some uncertainty there about the paths we’re going down, the plans that we’re making, the plans that we’re currently executing.”

It should come as no surprise cities will continue working to meet the targets they have agreed to with the federal government, Morgan said, adding they are always willing to work with different parties at all levels of government.

“We’ll continue to do that until there is a change, but there are some questions for sure about how that change would actually play out should it occur.”

Scott Aitchison, a Conservative MP from Ontario who serves as the party’s housing critic, says in a statement that Poilievre’s plan to cut the GST on home purchase under $1 million would provide “real relief directly to Canadians,” compared to the Liberals’ plan, which he said amounted to giving “billions of taxpayer dollars to municipal gatekeepers who block home building and raise taxes and fees.”

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Poilievre has panned the accelerator fund, first announced in the 2022 budget, as nothing more than government bureaucracy. Fraser, however, told the House of Commons last week that members of the leader’s own caucus have written to him advocating on behalf of communities in their ridings looking to receive some of that cash.

On Monday, Poilievre’s office released a letter he sent to premiers asking them to cut provincial sales taxes on home purchases under $1 million.

National Post
staylor@postmedia.com

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