Ottawa to send nearly $1B to Quebec to help speed up housing construction

Quebec will finally receive its share of a federal funding envelope aimed at accelerating housing construction, following months of negotiations. Ottawa will provide the province with nearly $1 billion.

The Quebec government and municipalities will be able to use the funds to upgrade and develop infrastructure needed for new housing projects, including drinking water, wastewater and stormwater systems.

The money comes from the Canada Housing Infrastructure Fund, created in 2024 under the Trudeau government. The program commits $6 billion over 10 years.

Negotiations between Ottawa and Quebec over the fund lasted more than a year. Both levels of government announced Wednesday that an agreement had been reached.

“The agreement announced today represents a major step forward in housing. It is significant and fully respects Quebec’s jurisdiction, priorities and legislative framework,” Housing Minister Caroline Proulx said in a statement.

Federal Housing and Infrastructure Minister Gregor Robertson said Ottawa worked closely with Quebec to “put in place the conditions needed to accelerate housing construction, reduce obstacles and deliver real solutions for communities.”

Quebec will be able to allocate the funding based on its own priorities and regional needs.

In addition to supporting water-related projects, the fund can also be used for waste diversion measures aimed at reducing reliance on landfill sites.

The funding was highly anticipated by Quebec municipalities. Municipal Affairs Minister Geneviève Guilbault said the agreement will allow “dozens of municipalities to carry out long-awaited work and ensure reliable services across Quebec.”

The Union des municipalités du Québec (UMQ) says the lack of an agreement had slowed essential infrastructure investments.

“In recent years, a growing number of municipalities have had to halt or slow residential development due to limits in their water infrastructure capacity,” said UMQ president Guillaume Tremblay, who is also mayor of Mascouche.

He is calling for the funds to be made available quickly to allow for major investments that would enable new housing construction.

The UMQ notes that, according to a study published last May, more than 36,000 housing units could not be built because of insufficient water infrastructure capacity.

Only 2% of needs covered

The Quebec Professional Association of Construction and Housing (APCHQ) also welcomed the announcement, noting that Quebec had been the only province without an agreement to access the federal funds.

However, the APCHQ says the prolonged negotiations reduced the real value of the deal, as construction costs have surged due to inflation and market volatility.

“The amount covers only two per cent of needs, as the municipal housing infrastructure deficit in Quebec is estimated at nearly $49 billion,” the association said in a statement.

The UMQ also argues that the nearly $1 billion allocation is not proportional to Quebec’s share of Canada’s population. It says Quebec municipalities should have received about $1.3 billion.

In addition to the housing infrastructure funding, Quebec and the federal agency Housing Canada have signed another agreement to invest in affordable housing projects in the province.

Quebec and Ottawa say they will work together through a joint collaboration table to fund affordable housing projects aligned with shared priorities.

They also committed to working together to simplify and speed up approval processes and improve coordination among government, municipal and community partners.

–This report by La Presse Canadienne was translated by CityNews