Prime Minister Justin Trudeau signs a guest book with Toronto Mayor Olivia Chow at City Hall, in Toronto, on Dec. 21.Nathan Denette/The Canadian Press
The federal government says its half-billion-dollar housing deal with Toronto will spur the construction of more than 53,000 units over the next decade, but to critics the agreement is only one step toward addressing the city’s massive affordability problems.
Prime Minister Justin Trudeau was in Toronto on Thursday to announce a $471-million deal with the city. Ottawa says this will produce 12,000 homes in the first three years – the largest agreement yet through the federal Housing Accelerator Fund.
“It’s a great city. And if we want to keep it great, we have to make homes more affordable,” Mr. Trudeau told reporters, flanked by Liberal MPs and Mayor Olivia Chow.
Under the terms of the accelerator fund, one-quarter of the money will flow immediately, with the rest disbursed over three years. In return, the city has pledged measures that include speeding up home approvals, increasing the supply of rental homes and protecting existing rental stock.
The $4-billion accelerator fund was introduced in last year’s federal budget and is Ottawa’s highest-profile policy aimed at the home-affordability crisis, which has undermined public support for the federal Liberals as real estate and rental prices have surged across the country.
However, both politicians and pro-housing advocates painted Thursday’s announcement as just part of a bigger solution.
Mark Richardson, with the group to HousingNowTO, said he was pleased to see the government offering grants instead of loans. But he noted the city has housing plans that go far beyond the sum on offer.
“This is a down payment on future funds that will need to be in the billions,” Mr. Richardson said. “It’s the start of a 20-year program to make up for the money we haven’t spent for the last 30 years.”
Councillor Gord Perks, who chairs the city’s planning and housing committee, noted that it falls short of the minimum of $600-million a year in federal funding that the mayor’s housing plan has called for.
“The City of Toronto has made a plan that would actually make a very big dent in our housing and homelessness problem,” Mr. Perks said. “Today’s numbers don’t get us there, but the mayor has been very successful in opening conversations with the province and the federal government, and I hope those further conversations get us the real funding we need.”
Thursday’s announcement was also silent about Toronto’s shelter system, which is bursting at the seams as city officials expect as many as 10,000 people a night to seek refuge this winter.
The city turns away hundreds of homeless each night, amid an increasing strain caused by an influx of asylum seekers. Toronto secured an offer of $600-million over the next three years for its shelters in its recently signed new deal with the Ontario government – but the money is contingent on participation from Ottawa.
Asked about refugee support during Thursday’s event, Mr. Trudeau said without specifics that “the federal government will continue to be there.”
The cost of housing is a critical issue across the country. An RBC report issued Wednesday painted a picture of many cities “at or near worst-ever affordability levels,” adding that the situation was “particularly tense in Vancouver, Victoria and Toronto.”
Federal Conservative Leader Pierre Poilievre has made the issue a key part of his attacks on the government. And the Liberals have been rolling out the accelerator fund for months, with increasing frequency, signing deals worth close to $900-million in the last week.
Although Toronto needs far more housing than the accelerator fund can make happen – Ontario’s target for the city is 285,000 new homes over a decade – Mr. Trudeau said his government approach is about more than building residential units directly.
“It’s also about changing the rules around densification and zoning so that more and more units can be built, independently of the federal government, independently of whether there’s direct investment of not,” he said.
Among the changes, the agreement required Toronto to loosen zoning rules that prevented most forms of development in the areas now reserved for single-family homes. And Housing Minister Sean Fraser said he was confident Toronto was now serious about building more housing near transit stations.
He suggested that saving most of the accelerator-fund money for gradual disbursement would promote real action.
“The balance is released as milestones are met over the course of the agreement,” Mr. Fraser said. “So we’re going to continue to work very closely with the city, and where appropriate the province, to ensure we actually see the reforms that will get housing built.”
Editor’s note: In an earlier version of this story, Mark Richardson was said to be connected to the group More Neighbours Toronto. He is in fact be linked to HousingNowTO. The Globe regrets this error