Prime
Minister Mark Carney's government is making good on a core promise from his
2025 election campaign, launching a major federal initiative to combat Canada's
persistent housing affordability crisis. On September 14, alongside Minister of
Housing and Infrastructure Gregor Robertson, the Prime Minister announced the
creation of Build Canada Homes (BCH).
This newly
established federal agency will centralize and spearhead the government's
ambitious housing agenda, aiming to double annual construction across
the country. BCH is designed to accelerate the delivery of affordable housing
by greenlighting projects on public lands and channeling crucial upfront
financing to jumpstart construction. The goal is to "supercharge housing
construction," working collaboratively with provinces and territories to
expand the supply of "deeply affordable and community housing."
To kickstart
this massive effort, the federal government has earmarked $13 billion
for the initial construction of 4,000 modular homes at six initial
sites: Edmonton, Winnipeg, Toronto, Ottawa, Longueuil, and Dartmouth. Officials
indicate that the agency has the capacity to scale this up to an impressive 45,000
units.
"Canada’s
new government is relentlessly focused on bringing down housing costs. Central
to that mission is rapidly scaling up the supply of homes," said Prime
Minister Carney, emphasizing that the agency will forge new partnership methods
between the government and the private sector.
Former
Toronto City Councillor Ana Bailao has been appointed as the CEO of
Build Canada Homes. "Affordable housing has always been more than policy –
it’s a personal mission... I’ve seen firsthand how safe, stable housing
transforms lives,” she stated.
Market
Context: Supply and Affordability Challenges Persist
The
government's push comes as the Canadian real estate market continues to
pressure buyers and renters, despite prices cooling from their pandemic-era
peaks.
·
Elevated Prices: The national average home price in August was nearly $664,000, up almost
two per cent year over year, according to the Canadian Real Estate Association
(CREA). Prices remain historically high, keeping many households out of the
market.
· Mixed Supply Signals: While the number of newly listed properties climbed 2.6 per cent monthly in August (a nearly nine per cent increase year-over-year), supply remains tight in key areas. The number of months of inventory at the national level sits at 4.4, below the long-term average of five months.
·
Construction Slowdown: Housing starts in the first half of 2025 were near an
all-time high, but a noticeable slowdown has been observed in the nation’s most
expensive markets. Toronto is on track for its lowest annual housing starts in
three decades, and Vancouver has also seen a remarkable slowdown compared to
last year. Nationally, housing starts declined 16 per cent in August,
consistent with forecasts of a construction slowdown.
Hope on
the Horizon?
Amid the
challenges, there are glimmers of hope. On September 17, the Bank of Canada
lowered interest rates to 2.5%. This move, according to CREA’s senior
economist Shaun Cathcart, could draw buyers "off the sidelines" and
potentially lead to a pickup in sales activity in the fall market.
Political
Pushback
The Build
Canada Homes initiative has not been without criticism. Conservative Party
leader Pierre Poilievre accused the Carney government of failing to achieve
housing affordability, stating that the current situation is a "triple
crisis, with prices too high for buyers to buy, too low for sellers to sell,
and inadequate for builders to build.” He advocates for incentives for
municipalities to expedite permitting and reduce development fees.
Despite the
political sparring, the Build Canada Homes launch signals a firm commitment by
the federal government to drive down housing costs by tackling the supply side
of the equation head-on. The success of this massive, multi-billion dollar
effort will be closely watched by millions of Canadians struggling to find an
affordable place to live.
