Housing promises in budget not enough to address affordability and supply issues: advocates
Sammy Hoods
The Liberal government’s 2025 budget, tabled on Nov. 4, the first under Prime Minister Mark Carney, commits to spending $25 billion on housing over the next five years. The budget notes that Canada has a “significant housing supply gap,” with the Canada Mortgage and Housing Corporation estimating that 430,000 to 480,000 new homes will be needed annually over the next decade to restore affordability to 2019 levels.
That would be equivalent to about twice the current rate of home construction nationwide. Kevin Lee, CEO of the Canadian Association of Home Builders, called it an “ambitious” goal and said many changes would still need to be made, including in federal policy, to achieve it.
“My biggest question is, ‘How do we actually support homeownership of all kinds?'” Lee said.
“Surprisingly, the outlook for the housing market was very positive, but that’s not the case.”
Ottawa said last week it would “enhance” the real estate sector with an initial spend of $13 billion over five years on Build Canada Homes. Homes Canada is a federal agency announced by the Liberals in September to build and fund more affordable housing.
But the budget says the agency will focus primarily on non-market housing, emphasizing its commitment to tackling homelessness while building affordable communities and co-ops for low-income Canadians.
The government says it will also use public land, offer flexible financial incentives and attract private burials to deliver more homes at scale.
Lee said that while building more social housing was important, it accounted for less than one per cent of the total housing built.
“We really need to look at the bigger picture here and really make more progress on homeownership,” he said.
“Building Canada Home certainly won’t do it alone.”
NerdWallet Canada spokesperson Clay Jarvis said the budget lacks details on how Ottawa plans to incentivize private investment to boost housing supply. He said the budget appears to put “a lot of housing eggs into the Build Canada Homes basket.”
“That seems to be the main driver of all this potential construction that we’re going to see over the next few years, but if we don’t have support from the private sector or municipalities, I don’t know how we’re going to end up building all these homes that the government has promised,” Jarvis said.
“I think we’re taking a big risk by focusing all our efforts on one initiative and doing almost nothing else.”
Toronto real estate agent Cailey Heaps said many in the industry would like to see more collaboration between federal, provincial and municipal governments to help adjust conditions and remove barriers to home ownership.
She said changes to rules around land transfers and vacancy tax, for example, could spur more property activity, while high development fees still hamper new home starts.
“There are some missed opportunities in the federal budget related to housing,” said Heaps, chairman of the Heaps Estrin real estate team.
“Everything the government does on housing needs to be more. There needs to be more collaborative conversations between all levels of government… because one person is pushing the other person and there’s no collective effort.”
The federal government announced earlier this year that it would scrap goods and services tax on certain homes for first-time buyers, a measure that was included in last week’s budget. The relief applies to new construction homes worth under $1 million, while Ottawa will also reduce the goods and services tax (GST) for first-time buyers on new homes worth $1 million to $1.5 million.
“Removing the GST for first-time homebuyers as part of Bill C-4 will help lower the cost of new construction homes, immediately making homeownership a reality for more Canadians, especially young families,” the budget says.
But Lee said the measure was not enough to help improve housing affordability.
He said the GST exemption should be extended to all buyers, not just those buying first homes and those renovating properties to build second homes or accessory dwelling units.
Jarvis said struggling condo markets in areas like Toronto and Vancouver could also benefit from such relief. He worries the measure may, for now, amount to a “gift to developers.”
“This is largely forcing first-home buyers to buy new homes,” he said. “We don’t really offer any assistance to buyers who want to resell.”
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Budget 2025 Canadian Home Builders Association Clay Jarvis GST Breaking down GST exempt housing supply Kevin Lee Sammy Hudes The Canadian Press
Last modified: November 13, 2025
