By Nono Shen
The federal government wants to support those who rent their homes with a protection fund, a bill of rights and a plan to give reliable renters credit when they want to purchase a home.
Prime Minister Justin Trudeau said Wednesday that there's something fundamentally unfair about paying $2,000 a month for rent, while those paying the same for a mortgage get equity and build their credit score.
"Renters matter, and young Canadians put a lot of their hard-earned money toward rent. We think that should count for a lot more," he said during the announcement at a Vancouver community centre.
Trudeau said his government is trying to build an economy that is fair for every generation.
"You work hard. You're creating, inventing and developing incredible things that are building the future of Canada," he said of young people. "You hustle, you are the heartbeat of the economy and Canada's success in the 21st century depends on you."
The measures are part of next month's federal budget and include a $15-million Tenant Protection Fund, which would pay provincial legal aid groups to help tenants against unfairly rising rents, "renovictions" or bad landlords.
The Canadian Renters' Bill of Rights would also need partnerships with provinces and territories to require landlords to disclose a history of unit pricing and create a national standard for lease agreements.
The government wants landlords, banks and credit bureaus to make sure rental history is taken into account on credit scores, giving first-time buyers a better chance at getting a mortgage, with a lower interest rate.
"This will make it easier to qualify for a mortgage or even qualify you at a lower rate. And just think about all the other things that will come from having a better credit score; a loan to help you start a small business for example," Trudeau said.
Finance Minister Chrystia Freeland was also at the event and said a no-holds-barred plan in the upcoming budget will help young Canadians "wrestle down" the cost of owning and renting a home.
"We need to make real the promise of Canada for younger Canadians," Freeland said. "We are going to pull every single lever and push every single button to deliver more housing without delay."
The government's budget will be presented on Tuesday, April 16.
Freeland said they know renters are facing skyrocketing prices across the country and they need support.
Renters deserve to get credit for the amount they spend over the years, she said.
"So, we're going to ask banks, lenders, landlords and (financial technologies) to work together to ensure that on-time rent payments by renters help renters to get better credit and potentially qualify for a mortgage, and maybe qualify for that mortgage at a lower interest rate.
"This tool, this element of fairness, is going to be especially useful for people who rent and have little credit history."
A Canada Mortgage and Housing Corp. report on housing supply released Wednesday says new home construction is at an all-time high, but demand for rental housing is still outpacing supply.
This report by The Canadian Press was first published March 27, 2024.
Banner image via The Canadian Press- Ethan Cairns
