The Canadian federal government’s new $6-billion Canada Housing Infrastructure Fund is a strategic move to tackle the housing crisis by focusing on the construction and enhancement of essential infrastructure. This funding, particularly the $5 billion set aside for provinces and territories, is conditional upon commitments to developing “missing middle” housing types such as duplexes, triplexes, and townhouses. This requirement to freeze development charges in larger cities could significantly influence the commercial real estate market, especially in terms of investment opportunities and development costs.

In Quebec, the situation is further complicated by the province’s longstanding position that municipalities fall under provincial jurisdiction. Quebec has historically been resistant to federal conditions on funding, emphasizing provincial autonomy over local affairs. This stance could lead to challenging negotiations, as the province may push back against federal stipulations attached to the housing fund, despite potential benefits for infrastructure and housing development.

Moreover, the proposed Canadian Renters’ Bill of Rights, aiming to include timely rental payments in credit score calculations, introduces an additional dimension. This measure could potentially ease the transition from renting to homeownership for many, altering demand dynamics within the housing market. However, its effectiveness in addressing the core issues of housing supply and affordability remains debatable.

Amidst these policy shifts, the surge in consumer credit and an increase in delinquency rates, fueled by high interest rates and inflation, adds complexity to the financial landscape by affecting rental demand and the price point at which units can be marketed, limiting new projects given their tight profit margins. 

For stakeholders in the Quebec commercial real estate market, these developments signal a period of potential opportunity and adjustment. The emphasis on infrastructure and “missing middle” housing development could open new avenues for investment and project development. However, the success of these initiatives hinges on effective negotiation and collaboration between federal, provincial, and municipal governments which are in no way guaranteed.