Federal housing spending is set for a steep decline over the next three years unless Ottawa renews its programs, according to a new report by the Parliamentary Budget Office.
While the new federal agency, Build Canada Homes, is touted by the government to double the pace of housing construction over the next decade, Canada has not laid out a clear plan to achieve this goal, according to the PBO which independently analyzes government finances.
Public documents and information from the Department of Finance around Budget 2025 point to a 56 per cent decline in federal spending on housing, Jason Jacques, the interim parliamentary budget officer told BNN Bloomberg.
The realistic outcome is that Build Canada Homes will add only 26,000 units over the next five years, according to the PBO, which previously also reported that Canada needs 700,000 homes by 2035 to fix affordability.
“Potentially, the numbers might be a lot higher than the 26,000 we’ve come up with,” said Jacques, warning about the government’s track record building these homes.
“We’re the folks that are supposed to look at the numbers and look at the spreadsheets presented by the government around their policy plans, and say, ‘okay, in reality, this is what cold, impartial analysis would tell you,’” said Jacques.
He said 26,000 homes “is not nothing,” but Canada still needs roughly 65,000 new units every year for the next decade to restore affordability.
The report shows spending is set to drop from $9.8 billion in the 2025 to 2026 period to $4.3 billion in the 2028 to 2029 period because of expiring funding and cuts to existing programs listed in Budget 2025.
Build Canada Homes isn’t meant to make money
Build Canada Homes is meant to speed up construction by offering cheaper financing, loan guarantees and access to land.
Jacques said the program isn’t designed to make money for Ottawa.
“That’s why we have the private sector, and that’s why we have capitalism,” he said.
Some loan guarantees and concessionary loans under Build Canada Homes could bring in revenue to sustain the organization, but he said most government programs require ongoing support.
He said the program tries to pull in private developers with a mix of financial support. The government is also pushing cities to reduce approvals and speed up construction.
Cutting red tape “saves time, which is money,” Jacques said, and gives developers more certainty when planning projects.
The supply problem is about the type of homes people need
Canada is already facing a housing supply gap with housing demand outpacing construction, according to a government report that says one of the main drivers of housing shortages is immigration-led population growth.
Jacques said the types of homes first-time buyers and renters need simply aren’t available in many markets.
He added that Canada has 16 distinct housing regions, which means a surplus in Toronto doesn’t help shortages elsewhere.
“So even if there is an oversupply in the case of Toronto, not everybody is going to move to Toronto,” said Jacques.
“And obviously you can’t take the housing supply from Toronto and shift out to Montreal.”
