Ottawa is quietly working on launching a new entity it hopes will be key to housing affordability

Globe and Mail

a day ago

Prime Minister Mark Carney's government has been quiet since the federal election about the housing crisis, the same issue that contributed to the Liberals' fading popularity under their previous leader.
Behind the scenes, however, housing stakeholders are fielding a flurry of calls from government officials seeking their advice on the creation of Build Canada Homes, a new federal entity that Mr. Carney has said will get the government back in the business of homebuilding.
His ambitions, announced during his campaign, were big: act as a developer to build affordable housing, spur innovation in the housing sector and offer low-cost financing to affordable-housing builders.
However, trade turmoil has quickly overshadowed housing affordability in the political arena, creating a void of information on how the federal government plans to get more homes built.
Renée LeBlanc Proctor, a spokesperson for Housing Minister Gregor Robertson, said in a statement that the government was on track to launch the initiative this fall and stakeholders would learn more soon.
But questions still linger about how the new entity will function, and what its creation will mean for existing programs. Meanwhile, some leaders in the housing policy and advocacy spaces are worried that if the government doesn't move quickly to spur more supply, the economic slowdown caused by U.S. tariffs will set plans further behind.
Mr. Carney promised the initiative would be a 'lean, mission-driven organization' focused on building affordable housing by leveraging public lands and partnering with the private sector. He pitched it as a central piece of the government's plan to double the rate of homebuilding in the country.
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Raymond Sullivan, executive director of the Canadian Housing and Renewal Association, an organization that represents the social and non-profit housing sector, said he's encouraged to see affordable housing at the heart of Build Canada Homes' mission.
But given how long it can take to set up a new bureaucracy, Mr. Sullivan said the government should roll out elements of Build Canada Homes as they become ready, rather than wait for the entire organization to be set up.
'We're not going to have a cake that's fully baked and ready to launch in the fall. So let's focus on the pieces that are already available to us,' he said.
University of Toronto senior housing researcher Carolyn Whitzman said there are two versions of the initiative that are being discussed in policy circles: one that is limited in scope and focused primarily on partnering with developers to build affordable housing on public land, and one that also has a larger mandate encompassing financing and innovation programs.
Figuring out what exactly Build Canada Homes will be responsible for and how it will distinguish itself from organizations such as the Canada Mortgage and Housing Corporation appear to be some of the details Ottawa is trying to hammer out, according to stakeholders consulted by the government.
Mr. Sullivan said Ottawa should ensure social-housing projects in the pipeline are not affected by the organization's creation.
'We don't want to see any kind of interruption. We need to know that the government is there as a partner with us, not sitting back for a year building a new structure, but ready to work on things that are ready,' he said.
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Some housing experts and stakeholders are skeptical that Build Canada Homes will be a sufficient solution to the housing shortage.
The government has had mixed success with its housing initiatives in the past — such as the slow progress it's made on converting unused office space into affordable housing recently flagged by the Auditor-General — and a new organization will likely take time to begin delivering results.
'They've talked about partnering with industry to actually build the units, which will be important, because governments around the world have proven that they can't properly get into the actual construction game,' said Kevin Lee, CEO of the Canadian Home Builders' Association.
Mr. Lee said building affordable housing on public lands also won't be enough to get the government to its goal of 500,000 housing starts a year. (The seasonally adjusted annual rate of housing starts was 283,734 units in June.)
Meanwhile, the private and social-housing sectors are impatient for clarity on other policy fronts, including the promised GST rebate for first-time homebuyers. Mr. Lee said the delay is affecting demand at a time when the economy is already slowing down the housing market.
'Having something like that that was promised not get turned into official policy has really thrown another wrench into the system,' said Mr. Lee.
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Finance Minister François-Philippe Champagne introduced legislation in late May to provide the GST rebates. But unlike the government's 'One Canadian Economy' legislation, which was rushed through the House of Commons and Senate during the four-week sitting, the bill on GST rebates must wait for Parliament to return in the fall.
The government's prioritization of fast-tracking approvals for major projects and managing trade tensions with the U.S. reflects a shift in the public's priorities, as well. Polling by Abacus Data shows U.S. President Donald Trump is the second-most important issue to Canadians, with housing and the economy nearly tied for third. (The rising cost of living – which includes housing costs – was the No. 1 issue.)
Mike Moffatt, founding director of the University of Ottawa's Missing Middle Initiative, said the shift in priorities is understandable, though he warned housing could become of greater importance again.
'The government would be doing itself favours if they do the legwork now, because if it becomes a big concern, or the primary concern for Canadians, again, it might be too late to really address that,' Mr. Moffatt said.
The trade war with the United States also has repercussions for the housing market, which won't make the government's job of spurring homebuilding any easier.
RBC assistant chief economist Robert Hogue said the housing market is slowing down in part as 'payback for an exceptionally strong period' after the onset of the COVID-19 pandemic.
'However, the trade war kind of put a damper on things and really affected confidence in most of Canada, and that's when we saw, through the winter and spring, a lot of potential home buyers saying, 'might as well sit it out,'' he said.
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'The challenge is to get more demand for new construction at a time when building costs have gone up and and you've got now more inventory in the existing home market, in many places around Canada.'
Mr. Moffatt said as the government works on setting up the organization, it needs to roll out policies that will have a more immediate effect on the housing market.
For example, the government could expand its proposed GST rebate so that all homebuyers of a primary residence are eligible, he said. Ontario Premier Doug Ford said in the spring his government would match the tax break if it were extended to all homebuyers.
Prof. Whitzman said social-housing builders also are seeking information on a number of programs, including the affordable housing fund, which provided capital for the repair of existing affordable and community housing. That fund recently ran out of money, leaving its future in limbo.
'I'm not saying Build Canada Homes is a bad idea,' she said. 'But there's stuff that could be happening tomorrow and there's stuff that should be happening tomorrow.'