Chrystia Freeland pushes back against premiers’ demand Ottawa to stop negotiating housing funding with cities

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Deputy Prime Minister Chrystia Freeland is pushing back against provincial anger over federal funding for cities by suggesting that if premiers care so much about municipalities they should put more money on the table.

At issue is a $4-billion program known as the Housing Accelerator Fund, which channels federal money directly to cities that meet criteria facilitating development. Hundreds of Canadian cities have rushed to apply. A handful have received the promise of funds while most, including Toronto, are waiting to see if they qualify.

But the approach has raised the hackles of some premiers, who note that under the Constitution, cities are the responsibility of provinces. At a housing announcement in Toronto on Tuesday, Ms. Freeland clapped back at provincial leaders complaining about jurisdictional supremacy.

“I am really pleased to see the premiers paying attention to municipalities,” she told reporters. “And given their enthusiasm and their focus on the municipalities of Canada, I would love to see them providing even more support to the municipalities over whom they are proudly asserting their jurisdiction. I think that would be a win-win.”

A few premiers, including Alberta’s Danielle Smith, threatened to pass legislation that could stop these direct federal transfers to cities. Quebec has such a law and that province recently reached a $900-million housing deal with Ottawa on behalf of all its municipalities.

A statement Tuesday from Ms. Smith said the province was studying the Quebec law.

“This arrangement doesn’t seem to be hurting Quebec’s ability to secure federal investment dollars for their cities,” the statement read. “Surely minister Chrystia Freeland isn’t saying that provinces asking for the constitution to be respected should be penalized.”

At the housing event, Ms. Freeland would not hint at what her government might do if such legislation were to spread.

Provinces, federal government feud over Ottawa’s Housing Accelerator Fund amid affordability crisis

The Housing Accelerator Fund has been controversial in some circles.

Mississauga council was originally deadlocked on allowing more density, as required by the federal government, before Mayor Bonnie Crombie exerted strong-mayor powers to force the issue. The Vancouver-area cities of Burnaby and Surrey had their accelerator funds put on hold when they loosened zoning rules but also massively boosted fees charged to developers.

Ontario Premier Doug Ford has slammed what he called “jurisdictional creep” and said Ottawa was “dumping funding and not even discussing it with the province.”

Asked Tuesday about Ms. Freeland’s comments, Mr. Ford’s press secretary forwarded a statement initially issued last week that called for the three levels of government to work together.

“Nearly two years after announcing the housing accelerator fund, we’re glad the federal government is finally doing something,” Ivana Yelich wrote in the statement. “Still, premiers hope the federal government will work with provinces rather than cut them out.”

Premiers meet together as the Council of the Federation, which is currently chaired by Nova Scotia Premier Tim Houston. After a recent meeting of the premiers, controversy around the fund threatened to become a constitutional fight.

The Council’s official communiqué called for “collaboration” on the housing crisis and said it could not be solved “by the federal government and municipalities acting without the meaningful involvement and support of provinces and territories.”

However, there was no sign Tuesday that Ms. Freeland would back down. During the housing announcement, when asked about an Ontario/Toronto working group looking for ways to ease the city’s budget woes, she offered a comment similar to her take on the accelerator fund.

“We have been hearing from provinces across the country an assertion of their jurisdiction over municipalities,” she said. “I would love to see that recognition manifest in more support for the cities.”