Will Carney’s Build Canada Homes Plan Make Housing Affordable?

Since the start of the COVID-19 pandemic, house prices have skyrocketed. Rapid population growth, combined with low interest rates and rising construction costs, has driven supply to ultra-low levels and created a wide gap between housing demand and availability.¹ The current housing crisis in Canada has left many families wondering, “Will housing ever be affordable again?”

In response, Ottawa has announced a new program called Build Canada Homes (BCH).² BCH is intended to accelerate housing construction, make use of public land, and prioritize affordable building methods. The program is scheduled for launch in Fall 2025.

What does BCH entail, and what could the program mean for house-hunters in Canada? What is affordable housing under the BCH program, and what is the scope of the project? Will it truly make housing more affordable for Canadians? REMAX answers your questions.

What is Build Canada Homes?

Build Canada Homes (BCH) is an ambitious project that aims to build affordable housing at scale.³ prioritizing Canadian materials, prefabricated and 3D-printed components, and environmentally responsible construction materials and methods.

The program has three main components:

Financing

BCH includes a total of $36 billion in financing, making it one of the largest federal housing investments in Canadian history. Part of the financing is specifically earmarked for low-cost loans and grants to build housing for vulnerable populations.

Reducing Construction Costs

BCH has committed to reducing municipal development charges by half for five years. This alone could cut the cost of a two-bedroom apartment in Toronto by $40,000.

Innovative Construction Materials and Methods

BCH will stress prefabricated and modular housing components. This could reduce building costs by 20% and make construction up to 50% faster. Overall, this can significantly improve affordability for Canadians.

What Is an Affordable House, and What Constitutes Affordable Housing?

Affordability doesn’t mean the same thing for everyone, so what is an affordable house, exactly? In general, housing is considered affordable when it costs less than 30% of a household’s pre-tax income.⁴ This applies to rental units and owned homes. For owners, the 30% includes mortgage payments, taxes, and utilities.

What constitutes affordable housing varies widely by region. Whereas incomes and prices are closely aligned in some parts of the country, there are enormous gaps in others. In Regina, St John’s, and Edmonton, for example, average housing costs are about 30% of the median household income. In Vancouver and Toronto, this rises to 93% and 68% respectively.⁵

Could Carney’s Build Canada Homes Make Housing Affordable?

It is possible for more households to afford housing under this plan, but it also faces significant challenges. One of the biggest hurdles is that developers will need to build about 430,000 to 480,000 new homes over the next decade to close the gap between supply and demand.⁶ The question of “What is affordable housing?” amidst a flurry of new construction also needs to be addressed.

Benefits of Build Canada Homes

The program is a bold initiative that tackles the housing crisis from multiple angles. The advantages of the program include:

• Scale and speed: BCH proposes to double the rate of construction. This could help level out prices so that we don’t see the surges of the last 5 to 10 years. BCH has the potential to deal with the question “Will housing ever be affordable again?”
• Direct cost reduction: By reducing municipal charges and eliminating GST for first-time home buyers of houses under $1 million, housing will be more affordable for the average homeowner.
• Reduced construction costs: Further cost savings will come through prefabricated and 3D printed components. To the extent that these savings are passed on to buyers, we can expect house prices to be within reach for more families.
• Targeted funding: Some of the funding is earmarked for “deeply affordable” housing. This will help members of vulnerable populations secure housing that aligns with their budgets.

Challenges to Build Canada Homes

The BCH program faces some potential hurdles:

• Implementation difficulties: Coordinating a massive housing development project over 13 provinces and territories across multiple levels of government will likely result in bureaucratic obstacles and delays.
• Market pressures: When answering the question “What is affordable housing?” market dynamics come into play. Increasing supply won’t automatically force prices down, especially if demand continues to rise faster than supply.
• Workforce availability: Construction workers and tradespeople are still in short supply, despite government funding for training. Without adequate people to build homes, BCH may not meet its goals on time. On the other hand, the use of prefabricated and 3D-printed components could lower the dependence on skilled on-site workers.

So, will housing ever be affordable again? Potentially, if accelerated construction can be sustained. The BCH program is a good step in that direction, but the challenges will need to be addressed head-on for the program to be successful.

How Can a Single Mom Afford to Buy a House?

Buying a house on a single income is challenging, and the expense of raising children makes it even more so. However, there are assists available for single mothers to access funds and reduce their monthly costs. These include:

First Home Savings Account (FHSA)

Contributions are tax-deductible, and you can use withdrawals to buy a qualifying home. You do not have to repay the funds. The maximum lifetime value of an FHSA is $40,000 per person.

RRSP Home Buyer’s Plan (HBP)

This plan allows first-time home buyers to withdraw up to $60,000 from their RRSP to be used toward a down payment. Withdrawals under the HBP are tax-free. Repayments are spread over 15 years, starting the second year after the withdrawal.

Land Transfer Tax Rebate

A rebate of between 0.5% and 2% of the purchase price of the property is available in some provinces.

First Time Home Buyers’ Tax Credit

This nonrefundable tax credit helps with the upfront cost of purchasing a home, up to $10,000. Since this is a tax credit rather than a grant, the amount that you save depends on your income tax rate.

GST Exemption on New Builds

This exemption has been proposed under the Build Canada Homes plan.

Although single mothers still face challenges when buying a home, these government-supported programs can go a long way to helping make housing more affordable for them.

Will Housing Ever Be Affordable Again?

Carney’s Build Canada Homes plan can make home ownership more affordable for Canadians, but the program still faces challenges to implementation, and workplace shortages could further delay the plan’s goals.

Nevertheless, the program is a bold, forward-thinking initiative that could significantly improve housing affordability. Will housing ever be affordable again remains an open question, but BCH promises to be a step in the right direction.

¹  https://www.cmhc-schl.gc.ca/media-newsroom/news-releases/2023/update-canada-housing-supply-shortages?

² https://www.ctvnews.ca/business/real-estate/article/new-federal-entity-to-prioritize-canadian-made-affordable-housing-projects/3

³ https://housing-infrastructure.canada.ca/bch-mc/market-sounding-guide-sondage-marche-eng.html

⁴  https://www.cmhc-schl.gc.ca/professionals/industry-innovation-and-leadership/industry-expertise/affordable-housing/about-affordable-housing/affordable-housing-in-canada

⁵ https://www.rbc.com/en/wp-content/uploads/sites/4/2025/03/Housing-Affordability_0625.pdf

⁶ https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/housing-research/research-reports/accelerate-supply/canadas-housing-supply-shortages-a-new-framework?