A little over a year ago, Prime Minister Mark Carney made an announcement in Ottawa about the introduction of Build Canada Homes, a federal government initiative aimed at addressing the housing crisis and expediting residential construction. The agency is committed to increasing the delivery of affordable housing, especially with concerns raised by industry leaders about the slow pace of housing development nationwide.
Build Canada Homes has pledged to support the construction of approximately 19,000 affordable units across the country, with only about 2,000 units currently under construction. Dave Wilkes, president and CEO of the Building Industry and Land Development Association in Toronto, expressed the need for faster progress in the industry.
The federal housing agency transitioned into a Crown corporation in July, following the royal assent of the Build Canada Homes Act. Much of the past year has been dedicated to overcoming bureaucratic obstacles, securing land transfers, and finalizing intergovernmental agreements.
According to Build Canada Homes spokesperson Joshua Coke, the initiative marks the beginning of addressing the unprecedented pressure on Canada’s housing sector, where demand for affordable homes surpasses the current supply. The agency’s focus is primarily on developing non-market housing, which ties rents to income rather than market rates. However, it also collaborates with developers to construct affordable homes for the middle class.
Kevin Fettig, president of CMI Financial, highlighted the prolonged absence of federal funding for new affordable housing over the past three decades, under both Conservative and Liberal governments. The shift in fiscal priorities led to reduced spending on housing initiatives, including the discontinuation of new affordable housing construction.
Federal Housing Minister Gregor Robertson acknowledged Ottawa’s historical neglect in addressing housing affordability and emphasized the current administration’s commitment to change that trajectory. The approach of Build Canada Homes, providing resources to expedite residential projects, is anticipated to yield positive outcomes in the long run.
Even with housing starts hovering around 250,000 annually over the past two years, the market-priced segment is lagging behind. The Canada Mortgage and Housing Corporation (CMHC) stresses the need to double the pace of housing starts to restore affordability to 2019 levels across the country.
CMHC’s latest report indicates the necessity of constructing approximately 417,000 to 469,000 units annually by 2036 to meet affordability goals. The supply gap poses a risk to future affordability, with significant pent-up demand from younger Canadians and newcomers.
Wilkes highlighted the positive impact of initiatives like the HST rebate and reduced development charges in Ontario on recalibrating overheated housing markets. Ottawa’s recent partnership with Alberta to build affordable housing signifies progress in addressing the growing need for housing in rapidly expanding provinces.
Build Canada Homes aims to promote modern construction methods, such as modular and prefabricated housing, to streamline construction processes. Minister Robertson emphasized the importance of industry modernization to facilitate faster and more affordable housing construction.