OTTAWA – The office of the federal housing minister is reaffirming Ottawa's commitment to doubling the pace of home construction, despite the absence of any mention of this pivotal affordability promise in Budget 2026. The budget, presented recently, omitted references to the original target introduced in the Liberals' 2025 election platform, a commitment reiterated multiple times in the previous year’s budget.
Instead, the extensive 511-page document outlines an alternative strategy aimed at tripling the pace of non-market housing construction, with a goal of achieving 24,000 starts annually over the next decade. Non-market housing is generally more affordable and relies heavily on government support; however, it only represents a small fraction of overall housing units constructed each year.
The Canadian Press inquired about whether the government is abandoning its objective to double the annual pace of overall home building. In response, Housing Minister Gregor Robertson's office referred to a statement made six months prior, confirming that the government remains "committed to doubling homebuilding over the next decade." This statement was initially prompted by concerns arising from the spring economic update in April, which also lacked references to the original goal.
Parliamentary Budget Officer Annette Ryan emphasized that while there have been discussions surrounding affordability supports, "no specific targets or metrics for the pace of home building were provided." The issue of housing affordability has intensified since the COVID-19 pandemic, which saw sharp increases in rents and resale prices, leaving many young Canadians struggling to enter the housing market.
On Tuesday, Robertson’s office highlighted statistics indicating that national housing starts have increased by more than 20% since the pre-pandemic period, with rental construction reaching record levels. Furthermore, rents have shown a declining trend over recent years. His office stated, "Since forming government, we launched an ambitious national plan to focus our efforts and spur co-ordinated action between governments, homebuilders, and communities. We moved quickly to increase housing supply and improve access to safe, warm, affordable homes."
However, MP Scott Aitchison, the Conservative housing critic, criticized the Liberals for seemingly abandoning their promise to double home building and replacing it with a more limited non-market housing target. He remarked that their proposals have morphed into what he termed "another Liberal housing illusion," emphasizing that simply tripling the pace of slow construction will not address affordability issues.
According to the Canada Mortgage and Housing Corporation (CMHC), while the country is transitioning into a "new phase" characterized by slowing population growth, it cautioned that the current annual pace of housing starts falls significantly short of what is needed to restore pre-pandemic affordability in the housing market over the next decade. The CMHC forecasts a "business-as-usual" scenario with 231,000 homes started annually, which would leave a shortfall of up to 238,000 homes by 2036.
Experts like Mike Moffatt from the Missing Middle Institute have expressed skepticism about the feasibility of the Liberals' original target to double home building, estimating that it would require annual housing starts to reach an unprecedented level of 500,000 - a peak Canada has yet to see, with historical maximums around 300,000. He also noted that the target seemed "excessive," considering the government's ability to influence population growth, which plays a fundamental role in determining housing supply needs. Moffatt further critiqued the government's lack of clarity on the types of homes required to fulfill Canadians’ needs.
Since Prime Minister Mark Carney took office in March 2025, the federal Liberals have instituted several policy changes aimed at stimulating home building. These include waiving the GST on many newly built homes, establishing new funds for local infrastructure, and creating Build Canada Homes, a new Crown corporation focused on addressing the long-standing issues surrounding non-market home construction. Budget 2026 proposed an additional $13 billion in funding over ten years for Build Canada Homes and pledged significant investments to combat homelessness nationwide.
Andy Yan, director of the City Program at Simon Fraser University, regarded Ottawa’s initial home building goal as "more aspirational than realistic," questioning the government's capability to meet such high targets. He acknowledged that existing programs like the Housing Accelerator Fund and the Apartment Construction Loan Program have been beneficial in promoting rental construction, primarily by easing local regulatory barriers.
However, various factors impede broader construction efforts, including escalating building material costs due to U.S. tariffs and fluctuating demand as the labor market softens. Furthermore, interest rates, a crucial consideration for developers, are independently managed by the Bank of Canada, which recently initiated its first rate hike after more than three years.
Moffatt cautioned that many hindrances impacting general construction similarly affect social housing projects. He stated, "There’s no non-market drywall, there’s no non-market lumber, there’s no non-market electrician," highlighting the complexities involved in meeting both market and non-market housing demands.
This report sheds light on the ongoing challenges and evolving strategies in the realm of housing construction and affordability in Canada, underlining the need for effective measures to counter the prevailing crisis.
