Municipalities Unite: Canada's Response to the Housing Crisis

The Federal Framework

Canada's housing crisis has prompted unprecedented federal involvement in municipal land use and permitting policy. The federal government's April 2024 Canada Housing Plan reflects a strategic shift toward active partnership with municipalities, backed by substantial financial incentives for communities willing to reform restrictive regulations and accelerate approvals.

Housing Accelerator Fund (HAF)

The cornerstone of federal intervention is the $4-billion Housing Accelerator Fund, which directly incentivizes municipalities to remove zoning barriers, speed up permitting, and invest in affordable housing infrastructure. As of late 2025, 179 HAF agreements have been signed, aiming to fast-track over 750,000 housing units across Canada over the next decade.

Additional Federal Initiatives

• Canada Public Land Bank (August 2024): Leases federal lands to housing developers, with 56 initial properties identified for affordable housing development
• Canada Secondary Suite Loan Program: Offers homeowners up to $40,000 in low-interest loans to add secondary suites, encouraging densification
• GST Removal Expansion: Extended to new student residences built by public institutions, reducing development costs
• Canada Mortgage Bonds Increase: Annual limit raised from $40 billion to $60 billion, unlocking financing for up to 30,000 additional rental apartments annually
• Build Canada Homes: New federal agency partnering with municipalities (Ottawa: 3,000 units starting 2026; Nunavut: up to 750 homes)

Provincial and Municipal Actions

Nova Scotia: Halifax Charter Amendments (2024)

The provincial government amended Halifax's Charter to mandate housing-focused reforms:

• Simplification of zoning laws to allow residential construction in most of the city
• Reduced parking space requirements
• Permission for manufactured housing in all residential areas
• Expedited permit approval processes

Ontario: Building Faster and Smarter Act (2025)

Ontario's "Protect Ontario by Building Faster and Smarter Act (2025)" aims to accelerate the province's goal of building 1.5 million homes over 10 years through:

• Reduced scope of environmental and traffic studies for new developments
• Standardized developer fees across municipalities
• Authority for municipalities to reduce development charges

The province has acknowledged falling behind on the 1.5 million target, making these reforms particularly urgent.

British Columbia: Infrastructure Permitting Acceleration (2025)

BC introduced legislation to speed up building permit approvals for key infrastructure, with initial focus on student housing. Provincial reforms also:

• Barred municipalities from imposing off-street parking requirements beyond accessible parking in transit areas
• Supported Vancouver's elimination of parking minimums in walkable neighborhoods
• Explored creation of standardized home design libraries to accelerate construction

Toronto: Multiplexes and Development Charge Reform

Canada's largest city is exploring:

• Increasing as-of-right permissions to allow up to six units citywide
• Comprehensive development charge bylaw reform to reduce upfront costs

New Brunswick: Fredericton's Residential Development Surge

Fredericton saw residential development double in 2025, with 1,564 new housing units permitted—a significant increase driven by streamlined processes and provincial support.

Common Reform Strategies

Challenges and Accountability

While federal funding has catalyzed significant municipal action, implementation challenges persist. The cancellation of Tecumseh's HAF agreement demonstrates that the federal government is enforcing reform commitments. Municipalities that accept funding but fail to implement promised changes face potential clawbacks and reputational costs.

Several provinces and municipalities are falling short of ambitious housing targets, indicating that permitting reforms alone are insufficient. Construction industry capacity, financing availability, and broader economic conditions also constrain housing delivery.

Looking Forward

Canada's coordinated approach to permitting reform represents a significant evolution in federal-municipal relations. The Housing Accelerator Fund's success in its first year suggests that financial incentives can effectively motivate regulatory change. However, sustained progress will require:

• Continued federal funding and technical support for municipalities
• Rigorous accountability mechanisms to ensure reforms are implemented as promised
• Sharing of best practices and lessons learned across municipalities
• Addressing construction industry capacity constraints
• Complementary policies addressing housing finance, affordability, and tenure diversity