C-356 – The Building Houses Not Bureaucracy Act – will tie funding for certain cities to the amount of housing they build, cut the GST for new rental units, and have the feds sell 15% of the land owned by them.
So before we go too deep into this one, only certain cities are affected by C-356:
Alberta
- Calgary
British Columbia
- Burnaby
- Richmond
- Surrey
- Vancouver
Nova Scotia
- Halifax
Ontario
- Brampton
- Hamilton
- Kitchener
- London
- Markham
- Mississauga
- Oakville
- Ottawa
- Richmond Hill
- Toronto
- Vaughan
- Windsor
Quebec
- Gatineau
- Laval
- Longueuil
- Montreal
C-356 labels these cities as high-cost cities, so they’re the ones that are most affected by it. The criteria to be on this list is having a population of 200,000 and a “benchmark home price” of more than five times median household income in the city, or they need to be in a high-cost region. (The government gets to decide what counts as a high-cost region). Cities can be added or removed from the list based on these requirements.
National New Housing Target
With that out of the way, we start with the new National New Housing Target. Each year, starting with 2024, we will attempt to build more housing than we built the year before. The goal in 2024 will be a 15% increase over the number of houses built in 2023. This goal will increase by another 15% every year. (So the goal for 2025 will be a 15% increase on 2024’s goal, 2026 will be 15% bigger than 2025, and so on)
Infrastructure Funding for Housing
Each high-cost city will be expected to build their share of the new housing (same formula above but starting with what that city built in 2023) or lose funding from the Canada-Community Building Fund and the municipal GST rebate. The amount each city will get from these is directly based on how close to their goal they get. (So if they only build half the houses of their goal they only get half the funding.) This part would come into effect in 2025.
The amount paid to the cities can be adjusted in the event of a national emergency, a natural disaster, a serious recession, a war, or an act of terrorism.
Finally cities can be granted an additional $100 million if they exceed their building goal.
Transit Funding for Housing
Once C-356 passes any transit funding for transit projects that would be paid out to a city is instead put into a trust until the city has built a certain number of high-density housing is built and occupied on all available land around any stations that are part of the project.
The government can decide, through an Order in Council, how much housing needs to be built, how much needs to be occupied, and how much land it needs to be built on.
Conditions
C-356 includes several additional conditions that need to be met to receive any infrastructure or transit funding. The government can reduce the amount the city gets based on how severely they think the cities fail to meet these conditions.
First up a city can’t “unduly restrict or delay” the approval of building permits for housing. This includes using restrictive zoning requirements or excessive administrative requirements. “Undue restrictions or delays”, “restrictive zoning”, and “excessive administration” are all open to the government’s interpretation.
The second condition is that a high-cost city can’t unjustifiably reject housing permits. Again it’s up to the feds to decide if a permit was unjustifiably rejected or not.
Finally, if a city’s average approval time is greater than six months it’ll be declared that they’re delaying the process. Note that rejecting permits to keep this average down is considered an unjustifiable rejection.
There’s also a note in here that allows people that think a building permit was denied or delayed to file a complaint against the city.
Report to Parliament
The Minister in charge of C-356 will need to report back to Parliament each year on the amount of funding given to cities, any violations of the requirements for funding, information on new housing built, and information on initiatives taken by cities to increase their housing supply.
Canada Mortgage and Housing Corporation Act
C-356 also makes changes to the Canada Mortgage and Housing Corporation Act.
First up, if the national new housing target isn’t met none of the executives of the Mortgage and Housing Corporation, nor any employees at the executive level, get their bonuses.
Next, if the average time to approve or reject applications for building permits is more than 60 days for six months in a row the executives and executive-level employees will have their wages halved. If the government decides the delay is justified they can choose not to enforce this.
Finally if the average delay is more than 60 days for a year all the executives and executive-level employees will be fired.
Also worth noting is that the government gets to decide who counts as an “executive-level employee”.
Excise Tax Act
The last bit of C-356 has to do with giving a GST rebate to people who build rentals. There’s some notes here, starting with this rebate only running for 3 years after C-356 gets Royal Assent.
Tax law is annoying and complicated to read, but the general point here is if you sell a qualifying residential unit you can apply for a rebate on the GST. Note that this only applies after the unit has been built or substantially renovated. This doesn’t have to be in an apartment building, adding a unit to a rental house qualifies for the rebate as well.
A qualifying residential unit is one that meets any of the following requirements:
- A self-contained residence
- Will be used as a primary residence for at least a year, and the average rent for a unit in the building is less than the market rate for the area the building is in
A self-contained residence can be two things. First is a suite or room in a hotel, motel, inn, boarding house, lodging house, or residence for students/seniors/individuals with disabilities/etc. Second is a unit with a private kitchen, private bath, and private living area.
Finally if you sell the unit/building within one year of getting the rebate, or the average rent for a unit goes above market rate within five years you’ll need to repay the rebate with interest.
Federal Property Report
Finally C-356 requires the Minister of Public Works and Government Services prepare a report on the property owned by the federal government within 90 days. The report will include a list of all the buildings and land owned by the feds, identify which ones could be made available for housing, and propose a plan to sell at least 15% of any federal buildings and all land that are appropriate for building housing.
Land that isn’t appropriate for housing is:
- Land that’s designated as ecologically sensitive
- Located in a national park
- Essential to providing government services
- Essential for national security
The government will have one year to put this land on the market. If they fail to do so they need to provide an explanation for why each piece of land or building was not put up for sale.
And finally, the report will need to include a plan to use a third of the Housing Acelerator Fund to offset the costs of the GST rebates.
Progress
C-356 is currently outside of the Order of Precedence.