The Spring Economic Update (SEU) will be tabled by the federal government on April 28, 2026. CHBA is hoping it makes up for Budget 2025 when it comes to supporting homeownership affordability, and instead builds on recent announcements by the government to support the cutting of taxes on new housing. Last fall, CHBA expressed deep concerns that the budget lacked announcements to further government election platform promises for market-rate housing from earlier in the year. It was also unsettling that the budget document painted a rosy picture that housing starts were doing just fine. Analysis of where those housing starts came from told a troubling story. In 2021, 70% of housing starts were for ownership, but today, that has plummeted to 50%, with the other half destined for rental housing. First quarter data from 2026 shows that slide is continuing. The dream of homeownership is slipping, and more action is required.
“If the government truly wants to address the housing supply and affordability crisis, much more needs to be done on policy improvement supporting market-rate housing and homeownership. An inability to buy a home will mean much less housing gets built and will intensify pressure on rental and social housing, all while increasing the wealth and inequity gap between those who can access homeownership and those who cannot.”
– Kevin Lee, CEO of the Canadian Home Builders’ Association
Bad Headwinds for the Sector
The SEU is an opportunity to announce much-needed policies designed to help well-qualified buyers access homeownership and support the supply of market-rate ownership homes. This is critical given that according to CHBA’s 2026 Q1 Housing Market Index (HMI) survey, builder confidence reflected bleak conditions to begin 2026. The single-family index fell 5.5 points from last year to 20.9 in the first quarter of this year. The multi-family index was 13.4 in Q1 2026, down 8.9 points from a year ago, and is the third consecutive new record low. These results mean more falling housing starts ahead, and continue to indicate the differences in health between units built for homeownership versus purpose-built rental housing development, which is masked in CMHC’s monthly report of broader housing starts. At the same time, the industry continues to see job losses, with 47% of HMI respondents reporting layoffs. Based on monthly payroll employment data, CHBA estimates that over 18,000 jobs were lost in Ontario alone in 2025.
“Broad layoffs will leave the residential construction industry without capacity, which will hinder its ability to ramp back up when the market turns around, which means supply will continue to be constrained. More action is needed now… Canada needs a comprehensive plan that includes support for homeownership to reach the government’s own housing targets and alleviate market-rate affordability challenges so that the next generation of Canadians can hope to have something close to the same opportunities as their parents.”
– Kevin Lee, CEO of the Canadian Home Builders’ Association, as quoted in the 2026 Q1 HMI Media Release
More Government Focus Needed on Market-Rate Housing
In Budget 2025, the federal government chose to focus on government-subsidized housing through Build Canada Homes (BCH). The development of more non-market housing is indeed important, but 95% of Canadians live in market-rate homes, so it’s also critical that there be a major effort to address market-rate housing affordability far beyond BCH to meet federal targets to double housing starts. To put it in perspective, BCH has targeted 4,000 units in its initial tranche – that is good for government-subsidized housing, but it’s less than one percent of the 480,000 units of all housing types that government says needs to be built each year to restore affordability to 2019 levels. It is estimated that BCH can build as many as 45,000 more units on crown lands moving forward – again, while this is fine for government-subsidized housing, it represents less than 1% of the total 4.8 million homes CMHC estimates are needed over the next decade.
Canadians are asking for stronger policies to supporting market-rate housing. Abacus Data conducted public opinion research, commissioned by CHBA, on homeownership, supply, and policy solutions. The survey found that 88% of Canadians under 45 would like to own a home one day but only 29% of all non-homeowners are confident they’ll ever be able to buy one. Further, only 17% think the federal government is doing enough to address affordability for homeownership. Diving deeper, 70% of those surveyed say declining homeownership rates are negative for Canada and 62% believe current federal plans will have little to no impact.
Canadians expect a formalized plan from the federal government on how to support homeownership. Momentum from previous federal initiatives, like the 2024 Canada’s Housing Plan that was making important policy steps to support homeownership, has stalled as the government instead focuses on government-subsidized housing.
While the recent federal announcement of Bill C-26 which aims to send $1.7 billion to provinces to help with supply and affordability for homeownership in their regions is positive, no details have been provided or conditions attached to ensure the money is used as intended. If the political and administrative details are finalized quickly, CHBA expects an improvement in builder sentiment in the coming quarters.
CHBA Recommendations for the Federal Spring Economic Update
In addition to wanting to see more federal leadership and a comprehensive approach to affordability for market-rate housing in the SEU, CHBA has specific recommendations to unlock the door to homeownership. This includes broadening GST relief to all buyers of new homes and extending it to renovations that add new housing, like secondary suites and accessory dwelling units (Canada-wide). The HST relief in Ontario has been a good start, but more permanent relief on a nation-wide basis is needed.
The government must also use all levers to support municipalities in reducing development taxes. The recent federal-Ontario announcement to support development charge reductions is a good first step, and CHBA encourages swift agreements with other provinces and territories to make similarly supportive plans. But this must be coupled with municipalities putting in place alternative funding models to fund infrastructure, rather than through DCs. Housing supportive infrastructure investments are also required in jurisdictions that have infrastructure needs but wisely haven’t resorted to the unfairness of DCs.
“Development charges have reached unsustainable levels in many municipalities, which new home buyers are shouldering. The federal government has made a commitment to offset development charges, which is positive, but it should also be pressuring municipalities to reduce their development charges by finding alternatives, and ensuring that housing-supportive infrastructure and transit investments are not only made, but are tied to housing affordability and supply outcomes, while keeping municipalities accountable.”
– Kevin Lee, CEO of the Canadian Home Builders’ Association
CHBA has also long called for fixing the stress test. Mortgage rules have been so overtightened that homeownership rates have been falling severely since 2011. Meanwhile, Canada’s mortgage arrears rate of 0.25% continues to be near record historic lows and well below its long term-average of 0.33%. CHBA continues to recommend an elimination of the stress test on uninsured mortgages, as well as making it dynamic for insured mortgages.
A comprehensive plan is needed to address market-rate affordability and housing supply, per CHBA’s recommendations on the federal role. So with the current 10-year National Housing Strategy winding down, CHBA is asking that the next iteration of the strategy include formalized and effective policies and programs to address market-rate housing and homeownership, so that it is a strategy that covers the full continuum, versus the old version that is really just a national social housing strategy. Affordable/social housing solutions are needed, but Canadians want and expect the government to not only help those in housing need, but to also have a plan to support the housing aspirations of the middle class, particularly when it comes to restoring the dream of homeownership—its what the next generation of Canadians deserve, and what the economy needs.
To read more about what CHBA would like to appear in the SEU, visit Unlocking the Door to Homeownership – Recommendations on the Federal Role 2026.