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2023 Fall Economic Statement: What It Means for Housing and Mortgages in Canada
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In November 2023, the federal government released its Fall Economic Statement, and this year’s focus was unmistakable — affordable housing and mortgage relief. With rising home prices, rental costs, and interest rates squeezing Canadians from all sides, the government laid out new measures aimed at increasing housing supply, protecting borrowers, and tackling the country’s affordability crisis head-on.
If you’re a homeowner, buyer, or industry professional, here’s a breakdown of what this means for you.
Key Highlights at a Glance
The economic statement revealed over $20.8 billion in new housing-focused investments over six years. This includes funding for:
- Rental apartment construction ($15 billion)
- Affordable housing for vulnerable Canadians ($1 billion)
- Co-operative housing expansion ($309.3 million)
- Enforcing short-term rental restrictions ($50 million)
- Municipal housing deals to accelerate housing starts
And on the mortgage side, the government introduced the Canadian Mortgage Charter, which formalizes relief measures for borrowers facing renewal shock.
Affordable Housing: What’s New?
Canada is short millions of homes, and affordability has never been worse. To address this, the federal government is pouring money into both construction and regulatory improvements.
1. Apartment Construction Loan Program
This program will get $15 billion in new funding starting 2025-26 to support the rapid building of more than 30,000 rental apartments. The focus? High-demand cities where supply is tight and rents are climbing fast.
By 2032, this program will have helped build over 101,000 rental units — a substantial move to tackle the rental crisis.
2. Affordable Housing Fund Boost
An additional $1 billion over three years will be added to the Affordable Housing Fund. This money is aimed at building 7,000+ new units for non-profits, co-ops, and public housing — with an emphasis on vulnerable populations.
3. Municipal Housing Agreements
Through the Housing Accelerator Fund, the government is signing deals with cities to cut red tape and speed up development approvals. So far, agreements have been signed with 9 cities plus Quebec:
- London: 2,000 homes
- Vaughan: 1,700 homes
- Hamilton: 2,600 homes
- Halifax: 2,600 homes
- Brampton: 3,150 homes
- Kelowna: 950 homes
- Kitchener: 1,200 homes
- Calgary: 6,800 homes
- Moncton: 490 homes
In Quebec, a separate deal will create 8,000 social and affordable units, with 500 units reserved for people at risk of homelessness.
4. Cracking Down on Short-Term Rentals
The federal government is investing $50 million over three years to support enforcement of local short-term rental laws. It also plans to deny income tax deductions for short-term rentals operating in violation of local rules.
The Canadian Mortgage Charter: Relief for Borrowers
With mortgage renewals looming for many Canadians — and interest rates far higher than they were five years ago — the government has introduced a formal Canadian Mortgage Charter.
This document lays out how banks and lenders should support borrowers under pressure, building on existing Financial Consumer Agency of Canada (FCAC) guidelines.
Key Mortgage Relief Measures Include:
- Extending amortization periods temporarily to reduce payments
- Waiving relief-related fees and charges
- Allowing insured borrowers to switch lenders at renewal without requalifying under a new stress test
- Permitting lump-sum payments or early sales without prepayment penalties for vulnerable borrowers
- No interest-on-interest charges during negative amortization periods
- Mandatory contact from lenders 4–6 months before renewal to discuss borrower options
These measures are especially important as tens of thousands of homeowners brace for payment increases that could exceed $500/month at renewal.
Industry Reactions: Mixed but Watching Closely
The announcement has sparked both optimism and concern.
- Chartered Professional Accountants of Canada welcomed the clarity and borrower protections.
- TD Cowen analysts expressed concern about the practical implementation and its impact on bank margins.
- Mortgage Professionals Canada (MPC) called for further action — especially eliminating the stress test on all renewals and reinstating 30-year amortizations for insured mortgages.
MPC also urged broader policy changes, such as increasing the insured mortgage cap to $1.25 million and creating a permanent national housing roundtable.
Frequently Asked Questions
What is the Housing Accelerator Fund? It’s a federal program aimed at helping municipalities fast-track housing approvals, targeting 100,000 new homes across Canada.
Will these new housing measures affect home prices? In the short term, probably not — but over time, increasing supply should help ease upward pressure on home prices and rents.
Who benefits from the Canadian Mortgage Charter? Primarily borrowers facing financial stress due to interest rate hikes, especially those renewing in the next 1–3 years.
Do these measures apply to all lenders? Only federally regulated financial institutions (like banks) are bound by the Mortgage Charter. Credit unions and private lenders may have their own rules.
Final Thoughts: Hopeful, But Work Remains
The Fall 2023 Economic Statement is a big signal that Ottawa understands how tough the housing market has become. The commitments to new rental housing, better affordability, and borrower protections are real steps — but they’re not silver bullets.
The key now will be execution: getting homes built quickly, ensuring banks follow the new mortgage guidelines, and adjusting policies as market conditions evolve.
