Last updated: April 1, 2025
The Liberal Party’s “Building Canada Strong” housing plan (the Plan), announced on the election campaign trail, vows to double the pace of construction by getting the government back in the business of home building, cutting red tape to make it easier to build, and cutting taxes for first-time buyers.
The Plan has several elements that the Canadian Home Builders’ Association (CHBA) supports, such as the Liberals’ intention to work with provinces to cut development taxes and help support the transition to more factory-built housing in Canada, and the previously announced GST cut for first-time buyers. However, the Plan focuses primarily on affordable housing (i.e., social housing units for low-income Canadians) and purpose-built rental, leaving many unanswered questions about how they will support homeownership (beyond the GST cut), which the majority of Canadians aspire to.
While social housing is important and needed (read how it fits into the Housing Continuum here), this article assesses the Plan through the lens of increasing market-rate housing supply and improving housing affordability for homeownership and market-rate purpose-built rental.
First, a bit of background.
Several measures in the 2024 Federal Budget, along with their “Canada’s Housing Plan” that was released in tandem at that time, and later updates through the recent Fall Economic Statement, were positive for moving the needle on addressing Canada’s housing supply and affordability challenges. These measures included:
- The introduction of 30-year amortizations on insured mortgages for all buyers of new construction homes and for all first-time buyers on any home;
- Federal infrastructure/transit funding and financing tied to housing outcomes;
- Conditions to support the broad adoption of gentle density;
- Actions to support public transit and the development of nearby higher density;
- A three-year freeze on increasing development charges if provinces want to access new federal infrastructure funding;
- Actions to support and incent the streamlining of approval processes at the municipal level;
- The release of public lands for more housing supply;
- The intention to develop an industrial strategy for home building;
- An increased cap on insured mortgages from $1M to $1.5M; and
- New financing incentives to encourage homeowners to build accessory dwelling units (ADUs).
These commitments were recommended by and welcomed by CHBA, and should continue.
The Liberal Party’s “Building Canada Strong” housing plan does not include these items, and so it is unclear whether they plan to continue the above commitments. We certainly hope they do, and will be advocating accordingly.
The new Plan has some positive initiatives, but also leaves out several key actions needed to take next steps to meaningfully address Canada’s chronic housing supply gap and help restore housing affordability for Canadians, which would ideally be building on the previous “Canada’s Housing Plan”.
Here’s CHBA’s take on the Liberal Party’s latest “Building Canada Strong” plan (the Plan):
- The Plan aims to doubling housing starts to 500,000 per year over the next decade.
- Doubling housing starts is still a very important objective for our next government to pursue. To achieve it, the Plan focuses on purpose-built rental, which is good but not enough. Canada must address the barriers to market-rate homeownership, which makes up the bulk of the housing market and is what the vast majority of Canadians aspire to achieve – see below.
- The Plan intends to create a new Build Canada Homes (BCH) entity to oversee several activities, mostly for affordable (social) housing and rental.
- CHBA strongly recommends an extension of the plan’s mandate and functions to address the many barriers facing market-rate ownership that remain to be tackled.
- CHBA strongly recommends an extension of the plan’s mandate and functions to address the many barriers facing market-rate ownership that remain to be tackled.
- The new BCH will develop affordable housing on public lands, and acquire and develop more land for more housing, partnering with builders to do so. BCH will also issue bulk orders from housing manufacturers to create sustained demand.
- There are certainly questions to be asked about governments acting as land developers (governments being known more for red tape and bureaucracy), so critical oversight on efficiency and effectiveness will be needed should this comes to fruition. If this process leads to more government-supported affordable housing, and therefore less inclusionary zoning, sticks to crown lands, avoids competition with private-sector developers, and engages the private sector in construction as it claims, it could help alleviate some of the strain on the affordable housing sector.
- At the same time, part of CHBA’s Sector Transition Strategy to support factory-built housing is the recommendation that governments should create longer-term bulk orders for affordable housing, which would in turn support certainty for investment in factories by the private sector. As such, CHBA is in favour of this component.
- BCH will provide $10 billion in low-cost financing and capital to affordable home builders.
- This is good for builders of social housing, but given today’s challenges with new construction financing, CHBA recommends that low-cost financing be extended to market-rate builders as well to support more housing supply and lower purchase prices for buyers.
- This is good for builders of social housing, but given today’s challenges with new construction financing, CHBA recommends that low-cost financing be extended to market-rate builders as well to support more housing supply and lower purchase prices for buyers.
- The Plan states that it will cut municipal development charges (DCs) in half for multi-unit residential housing and work with provinces to make up the lost revenue for municipalities for a period of five years.
- DCs are indeed out of control in many of Canada’s largest cities, and CHBA has long called for this to be addressed. Alternative funding models are required, so this measure is a start, but DCs need to be lowered for all types of housing (not just multi-unit residential buildings), and municipalities must come up with permanent alternative funding models to do this. There are a variety of alternatives available, from debt financing to property taxes to fees-for-services and more. Simply providing federal and provincial funding to subsidize unacceptably high DC is not the answer alone – this is a start and a short-term fix, but there needs to be a dedicated parallel process to get these cities to a permanent and acceptable solution for DCs that brings affordability back for all forms of housing and gets cities away from overtaxing the next generation of home buyers.
- DCs are indeed out of control in many of Canada’s largest cities, and CHBA has long called for this to be addressed. Alternative funding models are required, so this measure is a start, but DCs need to be lowered for all types of housing (not just multi-unit residential buildings), and municipalities must come up with permanent alternative funding models to do this. There are a variety of alternatives available, from debt financing to property taxes to fees-for-services and more. Simply providing federal and provincial funding to subsidize unacceptably high DC is not the answer alone – this is a start and a short-term fix, but there needs to be a dedicated parallel process to get these cities to a permanent and acceptable solution for DCs that brings affordability back for all forms of housing and gets cities away from overtaxing the next generation of home buyers.
- The Plan will reintroduce tax incentives for purpose-built rental (PBR).
- The financial model for PBR has been broken for a long time, so CHBA has called for this, as it will indeed support much-needed additional PBR construction. The removal of GST on PBR was good and needs to be made permanent. Further tax incentives will help create more PBR stock, which is also a good thing.
- The financial model for PBR has been broken for a long time, so CHBA has called for this, as it will indeed support much-needed additional PBR construction. The removal of GST on PBR was good and needs to be made permanent. Further tax incentives will help create more PBR stock, which is also a good thing.
- The Plan says it will build on the success of the Housing Accelerator Fund (HAF) and further reduce the housing bureaucracy, zoning restrictions, and other red tape to help builders navigate the market.
- Continuing to address these municipal barriers to more supply is indeed necessary and CHBA supports actions to do so. The commitment to publicly report on municipalities’ progress under the HAF is also an important measure to ensure municipalities achieve what they committed to in terms of better systems and increased housing supply.
- Continuing to address these municipal barriers to more supply is indeed necessary and CHBA supports actions to do so. The commitment to publicly report on municipalities’ progress under the HAF is also an important measure to ensure municipalities achieve what they committed to in terms of better systems and increased housing supply.
- The Plan says it will providing $25 billion in debt financing and $1 billion in equity financing to innovative Canadian prefabricated home builders and eliminate duplicative inspections and streamline regulations for prefabricated housing, including modular.
- These are direct measures from CHBA in our Sector Transition Strategy that can support productivity and reduce costs in the sector. CHBA would also note, however, that to truly get much more factory-built housing underway, removing barriers to homeownership in general is the first key to enabling the growth of the factory-built approach – factories can’t invest when buyers can’t buy.
- These are direct measures from CHBA in our Sector Transition Strategy that can support productivity and reduce costs in the sector. CHBA would also note, however, that to truly get much more factory-built housing underway, removing barriers to homeownership in general is the first key to enabling the growth of the factory-built approach – factories can’t invest when buyers can’t buy.
- The Plan says it will fast-track approvals for those with a proven track record with government funding.
- CHBA has called for and supports fast-tracking. This can go a long way for developers trying to use such programs.
- CHBA has called for and supports fast-tracking. This can go a long way for developers trying to use such programs.
- The Plan says it will accelerate reform and simplify the Building Code to speed up approvals and streamline regulations.
- This will be very good only if dramatic changes are made to the current Building Code and its current development process. Recent Building Code changes and more that are currently in development are already adding to the cost of construction, slowing approvals, and creating excessively burdensome regulations. This would be an about-face of the current government and current direction on codes, so the proof will only be in the pudding. CHBA will continue to actively push for changes to the Building Code, its current development system, and government policies, all of which are currently driving up construction costs unnecessarily and limiting housing supply. A housing affordability lens, which currently does not exist, is desperately needed on the National Building Code and its development system.
- This will be very good only if dramatic changes are made to the current Building Code and its current development process. Recent Building Code changes and more that are currently in development are already adding to the cost of construction, slowing approvals, and creating excessively burdensome regulations. This would be an about-face of the current government and current direction on codes, so the proof will only be in the pudding. CHBA will continue to actively push for changes to the Building Code, its current development system, and government policies, all of which are currently driving up construction costs unnecessarily and limiting housing supply. A housing affordability lens, which currently does not exist, is desperately needed on the National Building Code and its development system.
- The Plan notes that these measures will build on the elimination of the GST for first-time homebuyers on homes at or under $1 million. the full Liberal platform also included that, that in recognition of the high cost of homes in more expensive housing markets, the party plans to lower the GST on homes between $1 million and $1.5 million for first-time buyers as well.
- CHBA is supportive of this measure, having called for fixing the GST New Housing Rebate for many years. CHBA recommends that this exemption be extended to all buyers of new homes (to support more construction and so that move-up buyers can free up existing starter homes for first-time buyers), and that the threshold be increased for Canada’s more expensive regions, where $1 million is below the average home price.
- CHBA is very pleased with the update to the Liberal platform, reflecting a long-held CHBA ask. The amount of GST cut up to the $1.5M mark remains to be seen and CHBA still recommends that the reduction be extended to all buyers of new homes.
- The Liberal Party also added to their housing platform in the release of their full platform by stating that they intend to make mortgage payments more affordable by reviewing Canada’s mortgage market with the objective to offer Canadians more options while retaining stability in the market. This work will look at barriers to longer interest rate terms on mortgages, which would give Canadians more financial stability.
- This promise is a direct reflection of what is contained in CHBA’s recommendations. CHBA has long asked for an adjustment to the Interest Act to facilitate 7- and 10-year mortgages, including removing the stress test on mortgage terms of that length.
In summary, the Liberal Party’s “Building Canada Strong” plan has its strengths, particularly around PBR and affordable housing, but leaves much in the way of addressing the broad set of issues affecting housing affordability and supply in the market, especially for homeownership. Measures under last year’s Canadian Housing Plan need to continue and be built upon, and CHBA looks forward to more Liberal announcements and details targeted specifically at the barriers to homeownership.
For more on CHBA’s recommendations on the federal role, see CHBA’s Unlocking the Door to Homeownership, as well as CHBA’s 2025 federal election platform tracker.