Construction cranes over the skyline of Toronto looking west from Liberty Village on just west of Strachan. (Rene Johnston/Toronto Star)

The Liberal government’s $55 billion national housing strategy may not produce the results it wants when it comes to increasing Canadians’ access to affordable housing, a new report from the Parliamentary Budget Officer (PBO) says.

The analysis by the fiscal watchdog found that the strategy largely maintains current funding levels for ongoing programs, and actually reduces the level of targeted funding for lower-income households that form the “core housing need” in Canada.

The key metric of that core housing need is defined as if a household’s housing does not meet three standards for adequacy, affordability or suitability — which include whether a home is in need of major repairs and if there are other local housing options available that do not exceed 30 per cent of its total income.

There were roughly 1.7 million households in core housing need in 2016, according to Statistics Canada. Housing affordability remains a key issue in major cities such as Vancouver and Toronto, with the latter’s core housing need rate sitting at almost 20 per cent.

To address this, in 2017 the Liberals unveiled its “ambitious” 10-year national housing strategy that would provide funding for a variety of programs meant to make housing more affordable for low- and middle-income Canadians.

Most of the $16.1 billion in new federal funding will go toward the Canadian Mortgage and Housing Corporation (CMHC) — the agency administering most federal programs relating to housing affordability.

The target of the strategy is removing more than half a million families from housing need, creating 100,000 new housing units, refurbishing more than 300,000 public housing units and reducing chronic homelessness by 50 per cent.

But today’s report found that CMHC’s core Assistance for Housing Needs program offering funding to improve access to affordable housing for Canadians in housing need will see an average annual reduction of $325 million compared to the 10-year historical average.

Specifically, there is a 12 per cent reduction in funding for transfers to provinces, and a 30 per cent reduction in funding for federal community housing, which can be found in Quebec and Prince Edward Island.

The PBO did note, however, that the reductions are somewhat offset by $200 million annually in new spending on rent subsidies. As well, the decline is offset, in terms of aggregate spending, by a $664 million average annual increase in funding for the Financing for Housing program.

While the housing financing program’s impact so far has largely been through increases to the supply of affordable housing under the National Housing Co-Investment Fund and Rental Construction Financing Initiative, the PBO noted they do not specifically target low-income Canadians, making meeting the strategy’s goals less certain.

“It is not clear that the national housing strategy will reduce the prevalence of housing need relative to 2017 levels,” the report states.

The PBO report did find that funding provided to CMHC for its assisted housing programs between 2018 to 2027 averaged to about $2.8 billion annually, a 15 per cent increase in nominal spending compared to the previous 10-year average.

Employment and Social Development Canada, the federal department providing transfers to lower levels of government and service providers to help address homelessness, also plans to spend $225 million annually on homelessness programs, marking a 62 per cent increase in nominal spending over a five-year historical average.

Under the strategy, Ottawa is committing $16.1 billion in new spending for the strategy, along with $21.2 billion in new and existing loans. Another $6.8 billion in existing planned spending and $11.7 billion in provincial cost matching. The government’s budget implementation bill also includes statutory provisions to require Ottawa to maintain the strategy and set goals.

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In a statement, a spokesperson for Social Development Minister Jean-Yves Duclos said the PBO’s report highlights that without the strategy, “housing investments would have been cut by nearly 75 per cent over the next decade.”

Press secretary Valérie Glazer said unlike the previous Conservative government, the Trudeau Liberals have helped more than one million Canadians find housing through “unprecedented investments,” and that the strategy “ensures we’ll continue to be a full and active partner in Canada’s housing sector for the decade to come.”

NDP housing critic Sheri Benson said in a statement that the PBO’s report “shows the failure of the Liberal government to deliver for people on their housing needs,” and doing even less than the Harper government to help people with immediate housing needs.

She said it also shows a lack of clarity when it comes to meeting its stated objectives for reducing homelessness and reducing housing need.

“This report clearly shows that the Liberals are inflating their own figures to mislead Canadians about their own commitment to ending homelessness, making housing more affordable and investments in housing,” she said.

The PBO had said CMHC’s assumptions on the number of households receiving support and on new units built “do not reflect the likely impact of those programs on the prevalence of housing need.”

The fiscal’s watchdog’s conclusion was largely based on the fact that the strategy does not guarantee its benefits will target low-income households or specifically affordable housing stock.