Prime Minister Mark Carney acknowledged Thursday that his government did a poor job rolling out a controversial $1.45 billion federal-provincial program to acquire unsold condo units in British Columbia, a program critics have labeled a "condo bailout."
Speaking during a 45-minute press conference marking the end of the parliamentary session, Carney made the rare admission, stating, "I want to say up front: I don’t think we’ve done, myself included, a particularly good job of rolling this out and explaining exactly what it is."
Details of the program
The program, announced last week alongside B.C. Premier David Eby, is part of a broader $3.2 billion suite of measures aimed at the B.C. housing market. It involves Build Canada Homes and BC Housing partnering to "convert" 2,200 unsold condo units into affordable housing. However, the initial announcement lacked specifics on acquisition prices, total costs, and the "innovative financing tools" to be used.
Carney clarified that the total acquisition budget is $1.45 billion, with the federal government contributing 10 percent, or $145 million. He said the government is targeting "distressed condos" and buying them at a discount. "The province of British Columbia, which initiated the idea, sees an opportunity, potentially given what’s happening in that market, to convert some of these condos that are lying unsold to affordable housing, particularly rent-to-buy affordable housing… people who don’t have money for a down payment but can build that equity over time," Carney explained.
Criticism and controversy
The lack of clarity initially sparked criticism. One mortgage specialist told the National Post that the program appeared to be a "moral hazard" that "socializes losses while the profits flow to developers." Carney, however, argued that the program was not designed for developers' benefit and stated he had not been lobbied "directly" by developers.
The Greater Vancouver Area condo market is currently experiencing a correction. A Toronto-Dominion Bank report published earlier this month forecasts roughly a 15 percent peak-to-trough decline from the 2023 high by mid-2027, marking the deepest correction on record since 2005. Currently, there are over 4,000 unsold condo units in Vancouver.
Government's response
Carney emphasized the program's goal: "Buying them at a discount at the right time, financing, terming that out, setting up a rent-to-own structure for truly affordable housing." He admitted the government's poor communication around the program and sought to clarify its purpose during the press conference.
