Canada’s housing crisis is a matter of national urgency. As of 2024, nearly 45% of Canadians reported being very concerned about their ability to afford housing due to rising costs. In Ontario, the average home price in 2019 was approximately $604,883, and in 2024, that number rose to $868,067, reflecting a 43.4% rise over these five years.2 The supply is not meeting the demand, causing a sustained increase in prices. Grants have played a significant role in addressing the housing shortage. Among the many grants introduced by the Canadian government, three programs stand out: the Affordable Housing Fund, the Housing Accelerator Fund, and the Canada Housing Infrastructure Fund. To gain a deeper understanding of the government’s efforts, let’s examine these key initiatives.
THE AFFORDABLE HOUSING FUND
The Affordable Housing Fund (AHF), formerly known as the National Housing Co-Investment Fund, was initially launched in 2017 as part of the Canadian National Housing Strategy, a ten-year $115+ billion plan introduced by the federal government to address the country’s housing demands. In November 2023, the grant was retitled the AHF. Along with the name change, the Canadian government announced an additional $1 billion in funding over three years starting this year (2025-2026), bringing the total funding to over $14 billion. The fund is managed by the Canada Mortgage and Housing Corporation (CMHC), which oversees the administration and implementation of the program.
The AHF provides funding through low-interest and/or forgivable loans or contributions to help build new homes and renovate/repair existing, affordable, and community housing.
The fund targets support for vulnerable populations, giving priority to projects targeting housing solutions for Indigenous Peoples, people with disabilities, women and children fleeing family violence, seniors, individuals with addiction issues, as well as young adults.
Beyond construction projects, the AHF also provides funding for rent-geared-to-income programs, helping low-income renters by tying their rent to their income levels.
Grants from the AHF are open to provinces and territories, municipalities, non-profit organizations, Indigenous communities, and private sector developers. Moreover, the fund
facilitates and encourages partnerships between these various actors to deliver affordable housing projects.
To further streamline the development process, the CMHC established the Frequent Builder Framework to help expedite applications for the AHF program from existing housing providers with a proven record of building multi-residential units. As a result, frequent builders may receive priority treatment, underwriting and advanced flexibilities, the possibility of funding commitments for future years, and other benefits.
As of now, the Affordable Housing Fund has facilitated the creation of approximately 60,000 new affordable homes and the repair of about 240,000 existing homes across Canada. From building new housing complexes to transforming existing units, creating community shelters, and addressing Indigenous housing needs, the Affordable Housing Fund plays a pivotal role in shaping the future of the Canadian housing climate.
THE HOUSING ACCELERATOR FUND
Another key grant introduced by the Federal Government is the Housing Accelerator Fund (HAF). Launched in 2023, the $4 billion fund seeks to remove bottlenecks in housing development, speeding up the building process to address supply shortages. These “bottlenecks” include barriers concerning approval processes (e.g.: extended timelines for permits), infrastructure limitations (e.g.: utilities required to build new housing), and zoning restrictions (e.g.: regulations on mixed-use zoning) limiting new developments. The fund is intended to create a more streamlined housing development process with the goal of fast-tracking the approval system of 100,000 new homes within the first three years of the program.
Just like the Affordable Housing Fund, the Housing Accelerator Fund is overseen by the Canada Mortgage and Housing Corporation. However, unlike the AHF, the Housing Accelerator Fund is not open to private developers. Instead, these resources prioritize funding the efforts of municipal, provincial, and territorial governments, Indigenous communities, and nonprofit organizations.
The City of Guelph exemplifies how the Housing Accelerator Fund addresses housing challenges linked to population growth and increased demand—pressures that reflect national trends. Amongst the many HAF awardees, the city received over $21 million in funding in 2024. Guelph aims to build 739 new housing units above the city average by 2026, using grant money to fund activities such as modernizing permit applications to facilitate the process for developers, reevaluating zoning laws to encourage gentle density in low-density residential areas, creating an inventory of city-owned lands that can be used for affordable housing, and renewing infrastructure (such as pipes or roads) to keep pace with housing targets. By tackling these localized challenges, the Housing Accelerator Fund demonstrates its broader role in helping communities across Canada navigate similar issues.
As stated by ex-Minister of Housing Sean Fraser, “The Housing Accelerator Fund is currently helping 177 communities across Canada increase their ambition on housing by reaching their goal of increasing housing supply in their municipality”. Though still in its early stages, the Housing Accelerator Fund has set ambitious goals, and its full impact will unfold in the coming years.
THE CANADA HOUSING INFRASTRUCTURE FUND
Lastly, we turn to the Canada Housing Infrastructure Fund (CHIF), a $6 billion federal initiative managed by Infrastructure Canada designed to tackle critical infrastructure barriers that impact housing development like upgrading water and wastewater systems, improving stormwater management, and enhancing solid waste infrastructure to facilitate the construction of new homes.
The fund is open to municipalities, provinces and territories, non-government organizations working with eligible governments, and Indigenous communities. Notably, at
least 10% of the total funding is dedicated to Indigenous-led projects, recognizing the unique infrastructure and housing needs of these communities. Similarly to the HAF, the fund is not directly open to private developers.
The CHIF operates through two primary funding streams. The Direct Delivery Stream allocates up to $1 billion over eight years to the eligible recipients mentioned above and the Provincial and Territorial Delivery Stream distributes the remaining funds through agreements with provincial and territorial governments, who allocate resources to priority infrastructure projects that support housing development within their jurisdictions. The two streams ensure local needs and broad regional priorities are addressed comprehensively.
Introduced in April 2024, the CHIF remains in its early stages, with limited data on its funded projects and overall impact. As recently as May 2024, the federal government and the province of Ontario reached a $357 million agreement under the CHIF to address their housing needs. As this initiative moves forward, we eagerly await to see the impact and effectiveness of the fund in addressing the region’s pressing housing challenges.
CHALLENGES IN FEDERAL HOUSING GRANTS AND THE PATH FORWARD
While the federal government has made significant investments to address the national housing crisis through grants, a variety of factors continue to influence their effectiveness. At the forefront of these challenges are rising construction costs. Inflation, supply chain issues, and a shortage of skilled and highly trained labor have impacted the Canadian construction industry for years. Thus, despite the hefty amount invested by the federal government through these grants, experts argue that the funding pool is still insufficient to solve the country’s housing crisis as a result of the skyrocketing cost of construction within the country.
Another significant barrier is the “Not in My Backyard” phenomenon. In some instances, local communities are opposed to new developments targeting their neighborhoods
due to concerns about property values, neighborhood character, or increased demand for local services. This opposition can make it difficult for municipalities to use federal grants such as the AHF, HAF, or CHIF, to their full potential to build in areas where affordable housing is most needed. Critics argue that municipalities, notably elected officials, have too much control over the planning and development process, as the latter may be reluctant to increase housing density in some areas due to community opposition.
An additional concern related to these federal grants is the uneven distribution of funding for housing projects across provinces and territories. For example, some provinces and territories have been able to leverage the AHF funding more effectively than others (e.g.: Ontario), while regions like the prairies or Northern Canada may not have seen the same benefits due to logistical, demographic, or other barriers. This regional disparity may hinder the programs’ overall impact in certain areas, however, at the very least, efforts such as the CHIF’s commitment to allocate 10% of its funding to Indigenous-led projects have contributed to addressing funding asymmetries in Northern communities.
While, through these key grants, the federal government has made substantial investments to address the national housing crisis, a broader solution is required to continue
these preliminary efforts and collaborations. As the Canadian National Housing Strategy enters its final years and more recent funding programs gain momentum, Canadians continue to watch, hopeful for long-term meaningful progress in the effort to address the housing crisis.
