Post-secondary institutions will be able to apply for low-interest loans to build student housing starting this fall, Housing Minister Sean Fraser said.
The federal government is amending an existing program to make universities, colleges, nonprofits and private developers eligible for low-cost funding to build on- and off-campus residences.
At a press conference on Monday, Mr. Fraser argued that Canada needs more student housing and that the federal government would help build it.
The apartment construction loan program was supplemented with an additional $15 billion in the fall, bringing the total financing available to $40 billion.
Monday’s announcement did not add any additional money to the available funding package.
Sean Fraser made the announcement alongside other ministers as the House of Commons returns after the winter break.
Ceiling on new study permits
The announcement comes as the federal government grapples with a burgeoning international student program, which has added strain to local real estate markets.
More than 900,000 international students had visas to study in Canada last year and more than half of them had newly issued permits. This is more than three times the figure from 10 years ago.
Last week, the federal government announced a two-year cap on study permits, which would limit them to 360,000 issued in 2024, a 35% drop from 2023.
In an interview with The Canadian Press, the Governor of the Bank of Canada, Tiff Macklem, estimated that this new ceiling should help to alleviate pressure on rental costs.
Data from Rentals.ca and market research firm Urbanation showed the average asking rent for December in Canada jumped 8.6% year over year to a record high of $2,178 per month.