Minister of Housing, Infrastructure and Communities Sean Fraser at a news conference in Ottawa on Dec. 5, 2023.Adrian Wyld/The Canadian Press
The federal government is offering low-cost loans to postsecondary institutions and builders to expand access to student housing on and off campus, in a bid to tackle the housing shortage across the country.
Housing Minister Sean Fraser made the announcement in Ottawa on Monday, as the House of Commons returned from winter break. He said the government will reform the $40-billion Apartment Construction Loan Program to allow postsecondary institutions, as well as private developers and not-for-profit builders, to access the fund to expand student housing. The program provides low-cost financing, through the federal government, to help build more rental homes.
The change is intended to address concerns about housing availability for students attending Canada’s universities and colleges, particularly in large urban centres, where some students have to commute more than an hour to attend classes. But Mr. Fraser said even small towns with large student populations are feeling the housing crunch every September.
The change will not only benefit students, Mr. Fraser said.
“This is an important policy change. It’s not just going to create more affordable places for students to live near where they’re going to school. It’s also going to relieve pressure on the housing market by freeing up housing supply that already exists in communities that are seeing students need to compete in the market more broadly,” Mr. Fraser told reporters.
“This has the potential to reduce the cost of housing for everyone in college and university towns right across the country.”
Mr. Fraser added that some universities and colleges own large swaths of land, which could make it easier to build housing more quickly.
The application process for the program is expected to open in the fall 2024, and the government expects to have agreements with institutes in place by the end of this year. The government said the intention of the Apartment Construction Loan Program is to build 101,000 new rental homes across Canada by 2031-32.
The federal government has been under increasing pressure to address the housing and affordability crisis. Last week, Immigration Minister Marc Miller announced a two-year cap on international student visas in an effort to rein in skyrocketing growth, to address integrity of the system, and ease the pressure that foreign students are having on housing and health care.
The housing announcement was broadly welcomed by organizations representing Canada’s postsecondary sector, but some expressed concerns about the pace of construction and ability of institutions to pay.
Steve Orsini, president of the Council of Ontario Universities, said universities operate around 72,000 student spaces and have increased by 6,400 over the past five years, and want to build 12,000 spaces annually within about five years. Mr. Orsini said it will require all levels of government working together, including Ottawa providing the loans, provinces including residences in housing targets, and municipalities fast-tracking approvals, particularly for high-density areas near transit.
“It could take years to get the necessary approvals at the municipal level, and that will further delay our ability to build the housing that students need,” he said in an interview. He said some universities are ready to build, but the higher costs of borrowing and delays in final approvals hold back development.
Philip Landon, interim president and chief executive officer for Universities Canada, said the reform to the loan program is an important policy change. Katrina King, a spokeswoman for Colleges and Institutes Canada, also commended the move. But she also said the recent changes announced by Mr. Miller to the international student program – including a moratorium on processing student visas – have created uncertainty around future enrolments, “making it challenging for many of our members to commit to substantial capital investments in the immediate future.”
The Ontario government also announced last week that it plans to crack down on “bad actor” recruiters in the postsecondary sector and will require all colleges and universities to have a housing guarantee to ensure adequate spaces are available for incoming international students.