Build Canada Homes will operate as a centralized agency to oversee new affordable housing programs at the federal level. As Carney noted, the agency will “supercharge housing construction across Canada,” by helping to build supportive and transitional housing in collaboration with other levels of government, while also expanding “deeply affordable and community housing.”
Through partnership with private developers, the goal is to build more homes for the working and middle classes by approving construction on public lands and through the provision of funding for the early stages of housing developments.
The Prime Minister has earmarked $13 billion for the new agency, which will be overseen by former Toronto city councillor Ana Bailão who is named as CEO. The funds will support the construction of 4,000 modular homes on an initial six sites in Ottawa, Ontario; Edmonton, Alberta; Winnipeg, Manitoba; Toronto, Ontario; Longueuil, Quebec; and Dartmouth, Nova Scotia, and the agency has the capacity to scale up to 45,000.
The program has come under fire from Carney’s opposition. Conservative Leader Pierre Poilievre has been critical of the approach, accusing the government of adding another layer of bureaucracy rather than incentivizing municipalities to speed up the permitting process and encouraging them to drop development fees tied to infrastructure. Poilievre also wants to eliminate the capital gains tax on money reinvested in homebuilding, as well as the five percent federal sales tax on all home purchases under $1.3 million.
According to the Canada Mortgage and Housing Corporation (CMHC), overall housing starts in the first six months of the year were near all-time highs, though concerns still exist related to the cost of homes in Toronto and Vancouver, where the former is on pace for its lowest annual housing starts in three decades and the latter is facing a slowdown compared to last year.
In Toronto, construction of new condominiums was down 60 percent in the first half of the year and predictions show that this will persist for the next two years, as housing starts will be well below what is needed to restore affordability, while cities like Calgary, Edmonton, Montreal, Ottawa, and Halifax are experiencing development at a record pace, driven by the construction of rental apartments.
Estimates show that 3.2 million new homes will be needed to close the housing gap, which means that housing starts will need to nearly double over the next 10 years to meet demand, which has grown to 480,000 homes per year.
