“Double the pace or double the pain”—that’s the quiet ultimatum hidden in Canada’s $25 billion housing announcement. With home prices and rents surging post-pandemic, and fewer Canadians able to buy or even find a place to live in major cities, the stakes have never been higher.
To grasp why this investment matters, start with some context: According to the Canada Mortgage and Housing Corp. (CMHC), getting back to 2019 affordability levels means the country needs to build up to 4.8 million new homes by 2035—nearly twice the current annual pace. The numbers are stark: CMHC says between 430,000 and 480,000 new housing units are needed each year, far outstripping the 245,000 homes actually started annually.
The government’s solution is Build Canada Homes, a new entity that will inject $25 billion in debt financing and another $1 billion in equity support to homebuilders, especially those using prefabricated methods. The goal is more than ambitious: to reduce construction times by up to half and meet the eye-watering demand. Mark Carney, a prominent voice in Canadian economic policy, underscores the urgency, noting that “tackling this housing affordability challenge is enormous.”
The approach isn’t without its challenges. Accelerating home construction requires not only capital, but also a larger and more modern workforce, streamlined regulation, and robust private sector engagement. Delays and bottlenecks—especially in high-demand urban centres like Toronto and Vancouver—are persistent hurdles.
Still, the potential payoff is significant. CMHC’s models suggest that if new supply approaches the target, house prices could be one-quarter lower by 2035 than they would be otherwise, with average rents dropping about five percent. Without these changes, “house prices will continue to become more and more unaffordable,” warns CMHC deputy chief economist Aled ab Iorwerth.
Some misconceptions linger—simply building more homes won’t immediately solve everything, and affordability improvements will take years to materialize. But the investment signals a fundamental shift: housing is now core economic infrastructure, and the choices made today will shape whether Canadians can move for work, support a growing economy, or simply find a place to call home.
References:
Canada must double home construction over 10 years for affordability: CMHC
