Freeland Links Immigration to Housing Supply in Plan to Cut Building Costs

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Key Takeaways

Chrystia Freeland proposes linking immigration intake to housing supply, reducing targets from 500,000 yearly to 365,000 by 2027.
Federal funding for infrastructure will be tied to cities lowering development charges, which can reduce home prices by up to 25%.
Freeland’s plan includes removing GST on homes under $1.5M for first-time buyers and boosting modular housing construction financing.

On February 17, 2025, Chrystia Freeland, a candidate for Liberal leadership, unveiled an ambitious new housing plan aimed at tackling Canada’s housing crisis. The plan connects immigration numbers directly to the housing supply and proposes slashing development charges, a key factor in the affordability of new homes. This proposal marks a major policy change for the Liberal party, aligning more closely with aspects of the Conservative platform under Pierre Poilievre while addressing concerns over surging housing costs.

Linking Immigration Numbers with Housing Supply

A central piece of Freeland’s proposal is linking Canada’s immigration intake with the availability of housing. This represents a big departure from current government policy, which set a target of up to 500,000 permanent residents per year between 2024 and 2026, with plans to reduce this figure slightly to 365,000 by 2027. Freeland’s approach aims to slow population growth temporarily until the housing crisis stabilizes, acknowledging the direct impact that rapid immigration increases have on housing demand.

Freeland Links Immigration to Housing Supply in Plan to Cut Building Costs

This has become a pressing issue due to housing shortages in cities across Canada. For example, in Mississauga 🇨🇦, the average price of a detached home stands at $1.4 million, one of the highest in the country. Housing advocates, economists, and government officials have emphasized that Canada’s immigration policies must account for the current housing market pressures to avoid exacerbating the affordability crisis.

Lowering Development Charges to Increase Housing Supply

Another notable aspect of Freeland’s housing plan is her proposal to cut development charges significantly. Development charges are fees paid by developers to fund the infrastructure needed for new housing projects. These fees often result in higher home prices, as they are passed on to buyers. For example, in some parts of the Greater Toronto Area (GTA), development charges, along with other government-imposed costs, can contribute up to 25% of the total price of a new home.

Freeland has proposed a bold measure to address this issue: tying federal infrastructure funding to a municipality’s willingness to cut development charges. Cities that refuse to lower these charges could lose access to federal money for their local infrastructure projects.

The significance of this proposal becomes clearer when you consider recent developments in Mississauga 🇨🇦. On January 30, 2025, the Mississauga City Council voted to halve development charges for residential developments and completely eliminate these fees for three-bedroom units in purpose-built rental apartments. For a residential apartment, this lowered the fee from $38,316 per unit to $19,158. By requiring all cities to follow similar policies, Freeland aims to replicate this success on a national level.

However, the proposal is not without its challenges. As of earlier this month, Nate Erskine-Smith, Minister for Housing, Infrastructure, and Communities, had expressed a more cautious approach. He signaled that cities with increasing development charges might still qualify for federal funding, given the financial pressures they face. This discrepancy could make Freeland’s hardline proposal harder to implement without revisions.

Broad Affordability Measures

Freeland’s housing plan doesn’t stop at development charges. She has outlined a range of measures intended to make housing more affordable:
– Removing the GST for First-Time Home Buyers: Under Freeland’s plan, the federal Goods and Services Tax (GST) would no longer apply to homes priced up to $1.5 million for first-time buyers. This proposal is more generous than Poilievre’s plan, which eliminates the GST for homes priced under $1 million.
– Boosting First-Home Savings Accounts: Freeland proposes raising the annual contribution limit for Tax-Free First Home Savings Accounts from $8,000 to $10,000. This would allow first-time buyers to save more toward their down payments without paying tax on the growth of their savings.
– Promoting Modular Homes: As part of her strategy, Freeland has pledged increased financing to encourage the construction of modular homes, which can be faster and cheaper to build than traditional housing.
– Protecting Renters: The plan also seeks to protect Canadians who rent. One specific measure would prohibit landlords from using artificial intelligence (AI) systems to screen renter applications, an emerging issue linked to rising rents in tight markets.

These measures, alongside existing Liberal housing policies, aim to create a more comprehensive framework for addressing the crisis.

Development Charges and Alternative Funding Models

Development charges, as highlighted in Freeland’s platform, have become a crucial battleground in addressing housing affordability. They can make up as much as 10% of a home’s final price in certain cities. Recognizing these costs, several alternative funding options are being explored to lessen the burden on homebuyers:
– Municipal Financing Options: Instead of relying on upfront development charges, municipalities could borrow for infrastructure costs and repay those loans over 20 to 30 years. Quebec 🇨🇦 serves as a model, where such costs are not systematically imposed on developers.
– User Fees: Another option involves adding infrastructure costs to water, wastewater, or road tolls, distributing the charges across all residents rather than concentrating them on new homebuyers.
– Federal and Provincial Grants: Cities could also seek grant funding to cover essential infrastructure, reducing the need for developer fees altogether.

Adopting one or more of these models could ease the financial burden development charges impose, making homes more affordable for new buyers.

Industry Trends and Modular Housing

Freeland’s focus on modular and prefabricated homes—a strategy shared by fellow leadership candidate Mark Carney—reflects growing industry interest in alternative housing solutions. While Carney has yet to reveal specific details, modular homes are increasingly seen as an effective way to address supply shortages due to their quick and cost-efficient construction processes. Freeland’s promise to back these efforts with financing could encourage more developers to embrace this method, pushing new units into high-demand areas sooner.

Political and Broader Implications

Freeland’s housing plan has political and societal implications that stretch beyond affordability. Housing remains a central issue as the Liberal leadership race heats up ahead of the Ottawa convention on March 9, 2025. Freeland’s alignment with Poilievre’s proposals on some immigration and housing topics could make her a more palatable option for Canadians concerned about rising costs. At the same time, her proposals, particularly around cutting development charges, might put her in conflict with municipalities that rely on these fees to fund critical infrastructure.

Meanwhile, Liberal housing policies remain under scrutiny—particularly programs like the $6 billion Canada Housing Infrastructure Fund and the Housing Accelerator Fund, which have faced criticism for their complexity and effectiveness. These programs are likely to come under further discussion as Freeland’s leadership bid continues.

The Path Ahead

Freeland’s housing plan acknowledges the growing urgency of Canada’s affordability crisis and attempts to address it at multiple levels, from lowering development charges to tying immigration numbers to the availability of homes. While some components, such as her stance on federal infrastructure funding, could face implementation challenges, the proposals represent a significant pivot from current Liberal policy and align with evolving public priorities.

This sweeping housing plan signals that Freeland intends to tackle the crisis head-on, whatever the political costs. For authoritative resources on the policies and processes discussed, readers can visit the Canada Mortgage and Housing Corporation (CMHC) website. These proposals will likely set the tone of the debate as Canadians look to the federal government for greater action on an issue impacting families, renters, and future homeowners alike.

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Development Charges → Fees paid by property developers to fund infrastructure like roads and utilities for new housing projects.
Permanent Residents → Individuals granted the right to live, work, and study indefinitely in a country without full citizenship status.
Modular Homes → Prefabricated housing units constructed off-site and later assembled, offering faster and more affordable construction solutions.
Tax-Free First Home Savings Account → Savings account allowing Canadians to save for a first home with tax-free growth on contributions.
Housing Accelerator Fund → A federal program in Canada designed to increase housing supply by supporting municipal construction and development projects.

This Article in a Nutshell

Freeland’s Bold Housing Plan Tackles Canada’s Crisis
Chrystia Freeland’s 2025 housing proposal ties immigration targets to housing supply, addressing soaring demand. Slashing development charges and promoting modular homes, her plan aims to boost affordability nationwide. By aligning partially with Conservative policies, Freeland bridges political divides while confronting Canada’s housing crisis head-on, promising transformative change for renters and future homeowners.
— By VisaVerge.com