A new report from the Parliamentary Budget Officer (PBO) pours cold water on the federal government’s program to expand Canada’s affordable-housing stock.

Yves Giroux says that even though the federal government’s commitment to spend $3.7 billion annually under its National Housing Strategy (NHS) is significantly higher than spending over the 10-year historical average, the plan to boost affordable housing across the country is having “limited impact.”

The PBO report cites several drags on the NHS in the past three years.

First, it says, despite an increase in overall spending, funding for Canada Mortgage and Housing Corporation (CMHC) programs that are intended to help low-income households increased by just $192 million per year (or 9 percent) in nominal terms. That, says the report, represents a 15-percent decline in the real purchasing power of federal spending.

Second, it says, a significant portion of the community housing supported under CMHC’s agreements with provinces reached the end of their operating agreements. This caused a 42-percent reduction in the number of low-income community housing units supported under the agreements.

Third, CMHC’s programs have suffered from implementation delays. Over the first three years of the NHS, CMHC spent less than half the funding allocated for two key initiatives: the National Housing Co-Investment Fund and Rental Construction Financing Initiative. At the end of last October, CMHC had made financial commitments to create 4,270 units of affordable housing under its National Housing Co-Investment Fund, and financial commitments to create 7,960 units under the Rental Construction Financing Initiative.

The PBO report suggests that absent additional spending toward affordable housing, the number of households in housing need could increase to approximately 1.8 million, with a $9.3-billion aggregate affordability gap by 2025–26.