Prime Minister Mark Carney and Finance Minister François-Philippe Champagne tabled their first federal budget this week. The timing of this budget couldn’t be more important – the homelessness and housing crisis is deepening in communities across the country and Canadians are looking to their governments to take urgent action.  

Political and economic context 

In the lead-up to the budget, the government signaled that Canadians should expect a mix of spending cuts across the public service and generational investments.  

Politically, the government was facing mounting pressures to respond decisively to the escalating trade war and domestic challenges like unemployment, housing, and cost-of-living pressures. At the same time, operating in a minority Parliament meant that the government also had to balance these priorities with the budgetary demands of opposition parties. Economically, slow growth and rising unemployment created fragile ground for this budget – but the government decided to lean into ‘generational investments’ particularly in areas of defense and security, housing and infrastructure, and economic productivity.   

Budget highlights for housing and homelessness 

In recent federal budgets, housing and homelessness have been central components and we saw billions of dollars directed towards housing in the government’s 2024 housing plan. While this budget does not centre housing investments as prominently as in past years, it makes several significant commitments and keeps the door open for ongoing work to fix the housing crisis. 

Here are some key budget highlights on housing and homelessness you should know about:  

• Build Canada Homes: In September, the government launched their new entity focused on affordable housing, Build Canada Homes, which included an initial $13 billion commitment, including $1 billion for supportive and transitional housing and $1.5 billion for the Canada Rental Protection Fund. This budget appropriated these funds, though the allocation of funding for specific projects will follow in the coming months. 
• Urban, Rural, and Northern Indigenous Housing: The budget signalled investments in Indigenous housing, including $2.8 billion for urban, rural, and northern Indigenous housing (from the $4 billion initially announced in Budget 2023 for the urban, rural, and northern Indigenous housing strategy), and increases to the Canada Infrastructure Bank target for Indigenous infrastructure.  
• Reaching Home: Though this budget doesn’t provide program-level details, we’ve spoken with federal officials who assured us there are no plans to cut Reaching Home dollars in this budget as part of the government’s comprehensive expenditure review.  
• Build Communities Strong Fund: There is housing-enabling infrastructure funding through a new Build Communities Strong Fund, which includes $17.2 billion over 10 years to support infrastructure projects to enable housing – like roads and water infrastructure – and will be dependent on provinces and territories cost matching, reducing development charges, and committing to not levying further taxes on housing.  
• Other housing details: The Budget increased the Canada Mortgage Bond, aiming to support the construction of new multi-unit housing, and reiterates the new GST exemption for first time home buyers, which remains before Parliament in Bill C-41¹.  

What we’re keeping our eyes on 

• Indigenous housing delivery: The funding for urban, rural, and northern Indigenous housing in the Budget isn’t new and communities have been waiting for a long time to see the full investment delivered. The delivery mechanism for this funding is still unclear, and we’re working with other organizations and the federal government to support rapid resolution and a clear path forward.  
• Asylum seeker homelessness and the Interim Housing Assistance Program: The Budget winds down funding for the Interim Housing Assistance Program (IHAP) – the federal program that provides funding to provincial and municipal governments to help cover the costs of temporary housing for asylum seekers. The budget commits $67 million in 2025-2026 for temporary lodging for asylum claimants. CAEH is meeting with officials to better understand this funding and the path forward for communities who are at the forefront of responding to asylum seeker homelessness.  

What this means for the housing and homelessness crisis – and where we go from here 

We believe that this Budget opens the door for a true ‘Team Canada’ approach on housing and homelessness. One level of government alone can’t fix the housing crisis, but with the billions of dollars the federal government is proposing to spend, they need to bring other levels of government to the table to optimize their investment. There are a few key steps the government can take now to quickly deliver: 

1. Deliver BCH’s supportive and transitional dollars effectively – the federal government’s $1 billion investment earmarked in BCH for supportive and transitional housing can make an impact in communities – but we have to get it right.  

• This means bringing provinces and territories to the table as true partners in supportive housing. While the federal government promises to invest the capital to build new supportive housing, they need early guarantees from provinces and territories that they will step up to invest in the wraparound supports needed in supportive and transitional housing.  
• At the same time, the federal government has an opportunity through BCH to use bridge housing to help communities rapidly respond to unsheltered homelessness.  
  

2. Use this moment to bring the federal and provincial/territorial governments together to develop a new Canada Housing Accord – with new major funding through BCH and the Build Communities Strong Fund, this is a moment to unite governments on housing and homelessness through a new Canada Housing Accord.  

• In order to maximize the new federal investment, they need other levels of government at the table. The federal government is bringing funding to the table focused on housing construction, and provinces and territories should come together with a focus on spending on building and operating new supportive and community housing, preventing and reducing homelessness, reducing the cost of home building, and aligning zoning and building codes to allow scaling of factory- built housing. 

3. Focus on outcomes – federal housing policy has long emphasized outputs (the number of homes built and money spent). New federal investments need to focus on achieving better housing outcomes for Canadians (reducing homelessness, reducing core housing need, improving affordability) and bring provinces and territories together around shared goals.  

• The National Housing Council recently released a report Measuring What Matters: Proposing an Outcomes Framework for Federal Housing Policy that underscores the importance of measuring housing outcomes when assessing Canada’s housing policy.  
• As the federal government rolls out these new investments, it’s critical that they come together with other levels of government to establish agreed-upon housing and homelessness outcomes, and we’ll be working with them to ensure they’re measuring for outcomes and what really matters to Canadians.  

Other announcements in Budget 2025 you might want to know about:  

• Automatic tax filing/federal benefits for low-income individuals – with the goal of supporting Canadians to file their taxes and automatically receiving benefits they are entitled to, including the Canada Child Benefit and GST/HST credit. 
• Funding top up for the Department of Women and Gender Equality, including funding to support the 2SLGBTQIA+ community sector and to invest in federal action on gender-based violence. 
• Supporting the skilled trades, including a $75 million to expand the Union Training and Innovation Program, which supports union-based apprenticeship training in the trades. 

Conclusion 

Against the backdrop of an increasingly fragile housing and labour market worsened by the trade war, just over half of Canadians are concerned about the possibility of losing their home if their financial situation were to change² – a reminder of the urgent need for action on housing and homelessness. This federal budget offers a critical opportunity to come together as ‘Team Canada’ and build a housing system that works for everyone.  

For more, read our media statement responding to Budget 2025.