Photo courtesy Rene Boucher

According to CMHC, housing market activity will gain momentum in 2010 as the Canadian economy recovers.

Canada Mortgage and Housing Corporation (CMHC) anticipates housing starts will fall to 141,900 this year, but rebound and increase to 150,300 for 2010. In its second-quarter Housing Market Outlook: Canada Edition report, the federal agency's chief economist, Bob Dugan, attributes the 2009 decline to factors such as the current economy, greater competition from the existing home market, and the effect of significant growth in house prices between 2002 and 2007. Nevertheless, he predicts a stronger housing market next year as the Canadian economy recovers.

In the current economic downturn, the federal government has focused on improving affordable housing. Of the $7.8 billion granted by Canada's Economic Action Plan, $2 billion is provided through CMHC to build new and renovate current social housing. This investment includes:
• $1 billion for renovation and retrofit of existing social housing;
• $600 million for new housing and repairs to current social housing in on-reserve communities and the North;
• $400 million for low-income senior housing; and
• $75 million for housing for people with special needs.

Most of this funding—$1.525 billion—is delivered by the provinces and territories through amendments to existing agreements. The federal government provides the remaining $550 million. This joint investment translates into funding increases for affordable housing over the next two years, including:
• $99 million for New Brunswick;
• $93 million for Newfoundland and Labrador;
• $117 million for Nunavut;
• $13 million for Prince Edward Island; and
• $60 million for Yukon.

Last September, the federal government also announced a $1.9-billion, five-year investment for housing and homelessness programs for low-income Canadians.