Mark Carney led the Liberals to a fourth term of government thanks to factors like U.S. President Donald Trump’s trade war and annexation threats, as well as a campaign built on a few key promises such as a plan to solve Canada’s housing crisis.
The plan that the Liberal Party described as “most ambitious housing plan since the Second World War” promises to “get the federal government back into the business of home building” by creating a new Crown corporation.
It covers financing, development charges and tax policies. It doesn’t mention that Canada recognizes housing as a human right through a law passed in 2019.
Overseeing the Liberals’ efforts on the housing file will be Gregor Robertson, the former Vancouver mayor who was named housing minister as Carney’s new cabinet was unveiled on Tuesday.
CBC News spoke with a construction industry leader, an economist, a human rights advocate and an urban planner about the plan.
While there’s support for new approaches and agreement that action is urgently needed to provide more housing, there are also concerns about the Liberal strategy.
Prime Minister Mark Carney’s plan involves four key points: Cut the GST for some homebuyers, cut the fees builders pay cities, get the government to build houses itself and make it cheaper for investors to build apartments. But will it make housing more affordable? We break it down.
First, some context.
A report from the the Canadian Observatory on Homelessness, a research and policy organization at York University in Toronto, estimated the number of unhoused people in Canada is 235,000 per year.
However, another report suggests the reality could be three times higher, and Statistics Canada says 11 per cent of Canadians (1,690,000 people) say they’ve experienced some form of homelessness in their lifetime.
According to Statistics Canada, 8.56 million Canadians — slightly more than one in five people — live in unaffordable housing, which is defined as spending 30 per cent or more of before-tax income on shelter.
Statistics Canada data shows renters are most likely to have unaffordable housing, although a fall 2024 Abacus Data survey reported that 57 per cent of Canadians “fear losing their home, whether owned or rented, if their financial situation were to change“. For younger Canadians, that fear went up to 71 per cent.
Getting government back into home building
The Liberals say they’ll build nearly 500,000 new homes a year, double the current pace of construction, in part by creating a new Crown corporation called Build Canada Homes, “to build affordable housing at scale, including on public lands.”
The idea is inspired by a Second World War program that built homes for veterans and other citizens in the 1940s and produced more 40,000 low-cost homes over a few years.
Dave Wilkes, CEO of the Building Industry and Land Development Association (BILD) in Toronto, says while the intent is good, creating new bureaucracy is a bad idea.
“Our industry is very good at building homes. We don’t need another builder,” said Wilkes, adding that now’s not the time to experiment, but to eliminate red tape so the industry can build more homes more quickly.
But Leilani Farha, a former UN special rapporteur on the right to housing, says Canada’s private sector has failed to meet the need for affordable housing for decades.
Farha, who is also global director of The Shift, an international non-profit focused on homelessness and affordable housing, says “when you rely too heavily on the private sector in the housing sphere, you lose accountability.”
The Ottawa resident also said the federal government should guarantee its affordable housing won’t later charge to market-based rent or be sold off.
Cutting development charges
The Liberals also say they’ll get municipalities to cut development charges builders pay for infrastructure and services in new communities by 50 per cent on multi-unit residential projects, and work with the provinces and territories to cover the loss of revenue.
Wilkes said that he believes the cut should be across the board on any housing type “for equity and fairness and to ensure that we have maximum impact.”
Economist Mike Moffatt said cities take in a lot of money from development charges and need that cash.
Moffatt, founding director of the Missing Middle Initiative at the University of Ottawa, researches policies that grow the middle class. In his view, the federal government will have to “make sure that those incentives are large enough” to get cities to help homebuyers through reducing those charges.
Tax incentive for investors
The Liberals also promised investors who build apartments can deduct expenses on them from their personal taxes.
In the 1970s, a policy known as the multiple unit rental building cost allowance was credited for spurring the creation of almost 200,000 units, according to government records.
Moffatt loves the idea and said he thinks it will spur construction and “transform investor activity from one of buying up existing units to one of actually creating new purpose-built rental housing.”
While this plan helps investors, urban planner Carolyn Whitzman wants to see rules that make sure it’s also good for lower-income tenants.
An adjunct professor with the University of Toronto School of Cities, Whitzman has recently written a book on Canada’s housing crisis. She said the last Liberal government created a $55-billion incentive program to create more rentals, but almost none turned out to be affordable.
In her view, if tax incentives to build apartments come back, there needs to be “an emphasis, as there was in the 1970s, on producing affordable apartments.”
No GST on homes under $1M
The Liberal plan promises to eliminate the goods and services tax (GST) for first-time homebuyers for homes at or less than $1 million, a savings of up to $50,000.
Wilkes, with BILD GTA, thinks this is a good idea that should be expanded to the first $1 million on a new home build for any buyer and be matched by provincial tax exemptions.
Whitzman, on the other hand, describes the first-time buyer GST program as an “insult” to most would be home buyers.
She says a five per cent discount is not enough of a reduction to put a home within reach of households with the average Canadian annual income (about $87,000) in large parts of the country.
A recent affordablity report from Ratehub using current real estate data and mortgage rates shows that an income of $87,000 is enough to buy a house in St. John’s, Fredericton, Winnipeg and Regina, but not enough in any other major city in Canada.
By comparison, in Vancouver it takes an income of $240,000, while it’s slightly more than $125,000 in Calgary, $217,000 in Toronto, $122,450 in Montreal and slightly more than $120,000 in Halifax.
“I really hate it when politicians talk to people as though they’re stupid,” said Whitzman.
The program primarily targets “high-income people to make it slightly easier to buy a first-time home,” she said.
Time for new thinking
All four experts are hopeful for big changes on housing.
Farha said “we need some new thinking” on the issue because “people are really suffering at many income levels and things have gotten quite out of control.”
She also said from a human rights lens, Canada is failing and “homelessness is a life-and-death issue that has to be addressed immediately.”
Whitzman and Farha agree Canada needs to create more non-market or public housing, as governments do in countries like the United Kingdom, France, Finland and the Netherlands.
Farha will be watching that topic closely.
“The Liberal platform has a lot of public dollars being spent,” she said. “The question is will they receive public value for every dollar?”
