Canada's rental housing market faces ongoing pressures from redevelopment and rising costs, prompting federal action to preserve affordable options. Launched as part of the broader Build Canada Homes initiative, the Canada Rental Protection Fund represents a targeted investment to safeguard existing rental properties. With an allocation of $1.5 billion, this fund aims to enable community housing providers to acquire at-risk buildings, ensuring long-term affordability for tenants. Announced on September 14, 2025, by Prime Minister Mark Carney, it forms a key component of the government's strategy to address the loss of affordable rentals, which has outpaced new construction in recent years.

The fund builds on models like British Columbia's Rental Protection Fund, which has preserved 1,500 units since 2023 by shielding them from market-driven changes. Nationally, the initiative responds to data showing that Canada lost over 15,000 affordable rental units annually between 2011 and 2021 due to conversions and demolitions. In high-demand areas like Toronto and Vancouver, where average rents reached $2,202 in August 2025, such losses exacerbate displacement, with vacancy rates dipping below 1.5 percent in major centers. By intervening, the fund seeks to stabilize communities and prevent further erosion of housing stock.

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Breakdown of Funding Structure and Allocation

The Canada Rental Protection Fund totals $1.47 billion over five years, starting in fiscal year 2025-26, as outlined in Budget 2024 and Canada's Housing Plan. This includes $470 million in non-repayable contributions and $1 billion in low-interest loans. These resources are designed to leverage additional capital from private, philanthropic, and governmental sources, creating a revolving fund that sustains ongoing acquisitions.

Non-repayable contributions provide direct financial support to eligible projects, reducing the burden on community organizations. The low-interest loans, administered through partnerships with entities like the Canada Mortgage and Housing Corporation (CMHC), offer favorable terms to encourage participation. This structure aims to mobilize up to three times the federal investment through matched funding, based on similar programs' outcomes. For instance, British Columbia's fund attracted over $500 million in additional investments for its initial $500 million allocation, preserving units at rents 30 percent below market rates.

The fund operates under Build Canada Homes, a Special Operating Agency within Housing, Infrastructure, and Communities Canada (HICC). HICC sets the investment policies, ensuring alignment with national goals to double housing construction and reduce homelessness. As of the launch, ministerial responsibility for related assets, such as those from the Canada Lands Company, has been transferred to support integrated efforts. This integration allows the fund to complement other initiatives, like the $1 billion for transitional housing, by focusing on preservation rather than new builds.

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Eligibility Criteria and Application Process

Eligibility for the Canada Rental Protection Fund targets community housing sector-led projects, emphasizing non-profit involvement to ensure public benefit. Eligible applicants include not-for-profit organizations and, in group applications, for-profit entities partnered with non-profits representative of the community housing sector. All must be legally permitted to operate in Canada and reside there for tax purposes. Ineligible parties include individual for-profits without non-profit partners, foreign-owned organizations, provincial or territorial governments, municipal governments, and individuals.

The call for proposals, managed by HICC in collaboration with CMHC, closed on May 29, 2025, following webinars in March and April 2025 to guide applicants. Successful projects are selected based on their ability to leverage federal funds, demonstrate financial viability, and commit to long-term affordability. For example, applicants must outline plans to acquire buildings at risk of redevelopment, with rents maintained at affordable levels, typically 80 percent or less of average market rents.

Once selected, CMHC negotiates funding arrangements, including reporting requirements to track outcomes like units preserved and tenant retention. The process emphasizes equity growth in the community housing sector, with funds revolving through loan repayments to support future acquisitions. This model draws from successful precedents, such as Quebec's Société d'habitation du Québec, which has preserved over 20,000 units through similar acquisition strategies.

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How the Fund Addresses Rental Market Challenges

The fund directly tackles the financialization of housing, where corporate investors buy older rental buildings for profit-driven redevelopment, leading to evictions and rent hikes. A 2025 report by the Canadian Centre for Housing Rights notes that financialized landlords control 20-30 percent of multi-family rentals in major cities, contributing to 8.9 percent year-over-year rent increases in 2024. By enabling non-profits to purchase these properties, the fund prevents such outcomes, preserving units for low- and moderate-income households.

In practice, acquisitions focus on buildings with expiring affordability agreements or those targeted for luxury conversions. For instance, in British Columbia, the fund protected buildings with 500+ units in Vancouver, maintaining rents at $1,200-$1,800 for two-bedrooms, compared to market averages of $2,500+. Nationally, the Canada Rental Protection Fund aims to preserve 15,000-20,000 units over five years, based on leveraged funding projections.

Regional variations highlight the fund's relevance. In Toronto, where over 10,000 affordable units were lost to redevelopment between 2016 and 2021, the fund could stabilize neighborhoods like Scarborough and Etobicoke. Vancouver faces similar issues, with 3,000 units at risk annually. The fund's revolving nature ensures sustainability, with loan repayments funding new purchases, potentially generating self-sustaining capital of $3-4 billion by 2030.

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Integration with Broader Housing Strategies

The Canada Rental Protection Fund aligns with Build Canada Homes' three pillars: building at scale, financing innovation, and prioritizing Canadian materials. It complements the agency's 4,000 factory-built homes on federal lands and $1 billion for supportive housing. This holistic approach addresses both supply and preservation, supporting the National Housing Strategy's goal of 530,000 new affordable units by 2028.

It also ties into Budget 2025 commitments, including GST relief for first-time buyers on homes up to $1.5 million, saving up to $50,000. By preserving rentals, the fund indirectly supports homeownership transitions, reducing pressure on the ownership market where prices averaged $664,078 nationally in August 2025.

Economically, the fund could boost GDP by 0.5 percent through stabilized housing sectors, per CMHC estimates, while creating jobs in property management and renovations. It addresses homelessness, linked to 235,000 cases annually, by maintaining stable rentals as a bridge to permanent housing.

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Challenges and Implementation Considerations

Despite its promise, implementation faces hurdles. The call for proposals' closure on May 29, 2025, means selections are underway, with successful applicants expected to launch projects by late 2025. Monitoring will be crucial, with CMHC requiring annual reports on preserved units and affordability metrics. Potential challenges include competition for buildings in hot markets and ensuring equitable distribution across provinces. For example, Ontario's Association of Municipalities welcomed the fund but emphasized the need for provincial matching for supportive services.

Critics note that while preservation is vital, it must pair with new supply to meet demand for 3.5 million additional homes by 2030. The fund's success will depend on attracting private capital, with incentives like low-interest loans aimed at drawing investors seeking stable returns.

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Implications for Renters and the Real Estate Market

For renters, the fund offers protection against renovictions and unaffordable hikes, particularly benefiting vulnerable groups like seniors and low-income families. In cities with high financialization, such as Montreal where 25 percent of rentals are investor-owned, it could preserve 5,000+ units over the fund's lifespan.

In the broader market, it may moderate rent growth, which hit 8.9 percent in 2024, by increasing stable supply. Investors might shift toward purpose-built rentals, supported by programs like CMHC's Apartment Construction Loan Program, which funded 30,000 units in 2024.

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At Coldwell Banker Horizon Realty, we track these federal programs to help clients understand rental market shifts. Whether you're a landlord considering sales or a tenant exploring options, this fund signals opportunities for stability. Contact us for personalized guidance on how it impacts your real estate decisions.