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Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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There are signs that the federal Canadian government and its provincial counterparts are embracing the sound business approach on resolving the crisis on the rental residential real estate market in the county. At least this seems from the first reading of the Affordable Housing Program Agreement* signed between the governments of Canada and Ontario a week ago. It will provide $489 million** over the next five years to help increase the supply of affordable housing projects in the biggest and fastest growing by its population Canadian province.

The share of the federal funding will be half that sum - $244.7 million, which will be strictly matched by contributions from the Province of Ontario, municipalities and other private and non-profit organizations in order to build 10,500 units during the next five years.

What exactly distinguishes this program from so many others in the past, including in the other Canadian provinces, that simply were spending taxpayer's money projects? The most positive sign is that the provincial and municipalities contributions will be made mainly by tax incentives to the developers and builders, by fee reductions, in-kind contributions as land-for-build and also by capital grants for affordable housing***. This affordable housing program is expected to benefit especially the senior persons in Ontario, where the provincial government is already spending $ 879 million annually on different housing programs (twice more per capita than any other province in Canada).

One of the major points in this program is to stimulate the production of new affordable rental housing. The second major point that distinguishes it from many other similar programs is to ease the demand for rental housing by assisting rental households to purchase newly built, affordable homes in urban neighborhood revitalization areas. Third, it has to rehabilitate through major renovation affordable rental or ownership housing in remote areas.

The new program in Ontario upgrades on an already existing sound pro-business environment. So far the amendments made to the Building Code have reduced the red tape barriers for building rental units. Some amendments to the Development Charges Act have reduced the scope of services for which municipalities can levy development charges. Throughout special regulations passed under the Fair Municipal Finance Act, the province of Ontario has given municipalities the power to create a separate category for new rental buildings and to provide these buildings with favourable tax treatment for up to 35 years. This means that these new multi-residential buildings can be taxed at the lower rate that so far has been applied only to single residential homes.

Changes to the Planning Act simplified the planning approvals process making it easier for developers to build. Last but not least, municipalities are entitled to provide financial incentives to private sector developers of affordable housing through reduced fees and charges, low interest loans, the elimination of taxes and waiving or reducing development charges. In sum, all these measures have both to ease the tensions on the rental real estate market in Ontario and to stimulate the economic activity. It seems they have found the sound economic logic for doing that. Not via increasing taxes but via granting economic incentives to the developers, builders and final consumers.

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* - Affordable Housing Program Agreement was announces in January 2001 as a federal response to the gradually deteriorating affordable housing situation in Canada.

** - All figures are in Canadian dollars ($1 US = $1.52 CAD).

*** - Under this program the provinces and territories have the primary responsibility for program design and delivery, the initiatives need to create affordable housing for low to moderate income households and funded units have to remain affordable for a minimum of 10 years.

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