Premiers criticize federal housing deals struck with cities

The mayor of Halifax, which recently secured a deal with Ottawa to fast-track the building of thousands of new homes, says he was caught off guard by recent complaints from premiers over being left out of funding agreements between the federal government and cities.

Federal Housing Minister Sean Fraser, who has been travelling across Canada to highlight such agreements made directly with cities, says he was also surprised by the backlash — but is not planning to back down.

The mayor of Winnipeg, which still hoping for its own request to be approved, says he is more focused on getting the money quickly, rather than which level of government pays the bills.

The latest irritant in the relationship between Ottawa and the premiers came to a head on Monday. After their meeting in Halifax, provincial and territorial leaders released a communiqué that called for federal funding "that flows exclusively through provinces and territories" to address housing needs and support long-term capital planning.

It comes after the federal government has signed agreements with cities such as Halifax, Calgary, Hamilton as part of the Housing Accelerator Fund program that began rolling out this summer.

But the federal government and several mayors are doubling down on the need to get funds flowing to cities as quickly as possible.

The Liberals have been encouraging municipalities to submit applications that would change municipal bylaws and regulations to promote densification, such as eliminating building height restrictions or parking standards, and reducing red tape.

On Wednesday, Fraser said he had not previously heard any complaints from the provinces about the program.

"There's been no premier — and most of them do have my phone number — there's been no provincial counterpart at a ministerial level who has raised a single concern," Fraser said after a speech at the Canadian Alliance to End Homelessness conference in Halifax.

"In fact, the only ones that I have engaged with have indicated that they're quite happy to see the federal government make investments in housing in provinces."

The Liberals promised the $4-billion fund during the 2021 election campaign. The money was allocated to the Canada Mortgage and Housing Corp. in the 2022 federal budget, with the goal of adding at least 100,000 new homes across the country over five years.

But the first deal, with London, Ont., was not announced until this September. It happened as the Liberals were holding a caucus retreat in that city, focused on how to address a national housing crisis ahead of their return to Parliament after a summer of rising support for the Conservatives.

So far, the federal government has touted the program as a success, estimating that the deals signed with seven cities so far will get more than 146,000 homes built over the next 10 years.

But Canada's premiers maintain that they've been cut out of the process, and as a result they are threatening to enact legislation that would see them deal directly with Ottawa in brokering such deals.

The model they point to is a $900-million housing agreement Quebec reached last month on behalf of its towns and cities.

"You can't have the federal government coming into a certain town or certain city and dumping funding and not even discussing it with the province. That's unacceptable. We call it jurisdictional creep," Ontario Premier Doug Ford said on Monday.

"Obviously, they don't want to work collaboratively when they do that. We do want to work collaboratively."

The premiers have argued that they want to be involved to make sure that funding is equitable for communities and meets the needs of their provinces.

Fraser said that if provinces want to have more of a say in housing, they have the tools to offer the same kinds of incentives.

"But I'm not going to put the brakes on a program that's actually showing the results right now. There is no time to waste in a crisis situation," he said Wednesday.

On Thursday, Prime Minister Justin Trudeau joined Quebec Premier François Legault to officially announce that $900-million agreement — and the decision by the province to match it.

Trudeau echoed Fraser's previous comments by encouraging provinces to follow Quebec's lead.

"When we put forward $900 million as Quebec's share of the housing accelerator, the province of Quebec said 'OK, we're going to step up and double it.' There's not another province that has offered to do that," Trudeau said in Longueil, Que.

"We welcome them to come and do more with us."

Halifax Mayor Mike Savage, who is also the chair of the Big City Mayors' Caucus at the Federation of Canadian Municipalities, said he had not previously heard any concerns from the Nova Scotia government on the Housing Accelerator Fund.

He also noted the provincial government was supportive of the city's application for funding.

"It's a little bit new and out of the blue to me. I just think it's time that we all stopped fighting about jurisdiction and actually started solving the problem," Savage said in an interview on Wednesday.

"We don't want to slow things down. And we don't think that it's fair to say that there's no role for the federal government in directly supporting municipal governments," he said.

"In the same way that the provinces want to collaborate with the federal government, we want to collaborate with provincial governments. It's just been easier, frankly, to collaborate with the feds."

Last month, the federal government and Halifax reached an agreement to give the city $79 million toward housing, an investment that is supposed to help build 9,000 new homes.

In addition to the seven cities the federal government has reached agreements with, hundreds more municipalities have submitted applications.

Guelph Mayor Cam Guthrie, who is hoping his city will secure a deal with the federal government, said he was also caught off-guard by the premiers this week. He called on them to work collaboratively with Ottawa.

"It really is a head-scratcher for me that in a housing crisis, you would have different levels of government sort of at odds with each other about how funding could flow to exactly where it needs to flow to, which happens to be municipalities where housing is built," Guthrie said.

"Instead of trying to potentially put up roadblocks or to delay the type of funding that's needed in this crisis," he said, he would encourage the provinces to divert that same energy into "seeing how you could partner with the federal government on even more funding that could come to unlock more housing."

In Winnipeg, Mayor Scott Gillingham is trying to secure an agreement with the federal government after the city put in an application for $192 million.

"I appreciate (that) traditionally, funding from the federal government flows through the provincial governments. But there have been incidences in the past where the federal government has given money directly to cities," Gillingham said in an interview.

"My priority and my concern is getting the funds drawn down into Winnipeg in the easiest, quickest way possible to put it to use."

This report by The Canadian Press was first published Nov. 9, 2023.

With files from Lyndsay Armstrong in Halifax.