Canada Launches Build Canada Homes to Tackle the Housing Affordability Crisis

Prime Minister Mark Carney made housing one of the core tenets of his 2025 election campaign. The push comes amid Canada’s housing affordability crisis, which continues to pressure buyers and renters.

The prime minister, standing alongside Minister of Housing and Infrastructure Gregor Robertson, in Ottawa, on September 14, announced the launch of Build Canada Homes.

The Build Canada Homes agency, newly established at the federal level, will lead the government’s housing agenda and drive Prime Minister Carney’s goal of doubling annual construction. Centralized at the national level, the program is designed to accelerate the delivery of affordable housing across Canada.

According to Prime Minister Carney, Build Canada Homes will greenlight projects on public lands and channel upfront financing to kickstart construction. Officials say that the new agency will also “supercharge housing construction across Canada,” with Ottawa collaborating with provinces and territories to expand “deeply affordable and community housing.”

The federal government has earmarked $13 billion to begin the construction of 4,000 modular homes at six initial sites: Edmonton, Winnipeg, Toronto, Ottawa, Longueuil, and Dartmouth. The federal agency could possess the capacity to scale up to 45,000.

The initiative could start next year.

“Canada’s new government is relentlessly focused on bringing down housing costs. Central to that mission is rapidly scaling up the supply of homes,” Carney said, adding that it will create a new method of partnerships between the government and the private sector.

Former Toronto City Councillor Ana Bailao was appointed as the CEO of Build Canada Homes.

“Affordable housing has always been more than policy – it’s a personal mission. From my time in public office to my work in the private sector, I’ve seen firsthand how safe, stable housing transforms lives,” she said in a statement.

The program has received some pushback, most notably from Conservative Party leader Pierre Poilievre. He says the government should adopt some of his housing proposals from the election, including creating incentives for municipalities to expedite the permitting process and reduce development fees.

Speaking to reporters in early September, Poilievre accused the Carney government of failing to achieve housing affordability.

“Mr. Carney has accomplished the impossible. It 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 said.

The Canadian Real Estate Market

While Canadian home prices are down from their pandemic-era peak, they remain elevated, keeping many households out of the real estate market.

According to the Canadian Real Estate Association (CREA), the national average home price was up almost two per cent year over year in August, surpassing $664,000. In the Ottawa housing market, trends are tracking close to national conditions, with affordability still stretched for many buyers. These figures underline that Canadian home prices in 2025 remain elevated by historical standards, even as pandemic-era peaks have cooled.

The supply issue remains mixed, varying across different parts of the country. The number of newly listed properties climbed 2.6 per cent monthly in August. With more than 195,000 properties on the open market, this represents a nearly nine per cent increase from a year earlier.

“August continued the trend of rising sales in many markets across the country, and while momentum slowed compared to July, much of that is simply a reflection of the time of year,” said Valérie Paquin, head of the real estate association. “Now that we are on the other side of Labour Day, new listings are flooding onto the market.”

New CMHC data on housing starts in Canada 2025, released in early September, found that housing starts in the first half of 2025 were close to an all-time high. However, in the nation’s two most expensive housing markets, Toronto and Vancouver, there has been a noticeable slowdown. Toronto, North America’s fourth-largest city, is on track for its lowest annual housing starts in three decades. Vancouver has seen a remarkable slowdown in housing construction compared to last year.

But there could be a slowdown on the horizon as housing starts declined 16 per cent in August.

“The slowdown in the SAAR that we saw in August is notable as it is well below the six-month trend line,” said Kevin Hughes, CMHC’s Deputy Chief Economist. “If sustained, this adjustment in the level of housing starts would be consistent with both our forecast and current market intelligence, indicating a slowdown in the pace of housing construction.”

Meanwhile, there were 4.4 months of inventory at the national level by the end of August, the lowest reading since January and slightly below the long-term average of five months.

The fall housing market could witness some solid activity, says Shaun Cathcart, CREA’s senior economist.

“If last year is any kind of guide, then there is the potential that sales could really pick up in the next month or so, depending on how many buyers are drawn off the sidelines, particularly if we see a September rate cut by the Bank of Canada,” Cathcart said. On September 17, the Bank of Canada did indeed lower interest rates to 2.5%, shining some hopefulness on the situation.

According to the CMHC, the average conventional five-year mortgage lending rate is around five per cent.