Eliminating out-of-provincial trade barriers will increase housing starts by 30,000 years: CMHC
By Sammy Hudes
This will bring the annual housing total to 280,000 over time, which will be a “meaningful step towards a fixed Canadian housing supply gap”, the Canadian Mortgage and Housing Corporation said in a report Thursday.
Mathieu Laberge, chief economist at CMHC, said to achieve this goal that Canada must reduce inter-provincial restrictions and hinder west-to-east transport infrastructure, which will help maximize the use of household materials nationwide.
“Eliminating barriers creates this general economic wealth, which makes it easier for a country’s partners to trade,” Laberge said in an interview.
“This will improve the economy and make it stronger overall, thus benefiting housing construction.”
He said fewer barriers to out-of-provincial trade will strengthen the economy by increasing the demand for home ownership, including through a stronger overall economy, lower unemployment and higher household income.
“Because the expected increase in income will increase demand for home ownership, housing supply must increase to at least in relation to demand to maintain or increase affordability,” the report said.
“It is also expected that average rents will grow by 3.1%, with half of revenue growth. The affordability of the rental housing market will increase because revenues will grow faster than rent.”
According to recent CMHC estimates, the report’s forecast will account for nearly 15% of the additional housing supply required annually over the next decade.
Last month, CMHC said up to 4.8 million new homes will need to be built over the next decade based on projected demand to restore the affordability level seen last time in 2019. This means that by 2035, the ownership and rental market will require 430,000 to 480,000 new housing units each year, twice the speed of home construction in Canada.
Under current conditions, CMHC starts on average 245,000 times per year over the next 10 years.
Eliminating out-of-provincial trade barriers was the focus of Prime Minister Mark Carney’s campaign during the spring federal election, when he vowed to establish “free trade” before Canada’s National Day.
His administration has since passed the C-5 bill, a comprehensive bill that reduces federal restrictions on inter-provincial trade while speeding up the allowance of large infrastructure projects.
Experts say the law is just the first step in the process, as it deals with the traditional tape festival proposed by the federal government, rather than the rules set by the province, which have the greatest authority in the field.
The Canadian Federation of Independent Businesses estimates that existing internal trade barriers cost about CAD$200 billion a year.
“There are many trade barriers that can prevent the development of resources or labor in the residential construction industry,” Berger said.
“For example, there are different standards for different inputs to the residential construction industry…the other side is labor, service, and we do see that certain agreements still segregate residential construction labor.”
Leberg’s report cites a survey by Statistics Canada that shows that nearly half of Canadian construction companies blame distance and shipping costs on the main reasons why they do not buy goods or services from suppliers in another province or territory.
They also said that in addition to obtaining permits and permits and other challenges, provincial or territorial tax laws are also part of the problem.
The report said Canada has “enough domestic production” of core building resources, noting that it is a net exporter of materials such as wood, aluminum, iron and steel.
“This means the country is not using all the products it produces, and a large portion of our domestic output can be redirected to residential buildings in Canada,” he said.
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Last modified: July 17, 2025
