Earlier this week, the federal government announced Build Canada Homes (BCH), a new federal entity with goal to create more affordable (social), non-market housing. BCH will aim to develop 4,000 homes on federal lands, with the potential to deliver up to 45,000 units across its portfolio using innovative financing and factory-built construction.
CHBA CEO, Kevin Lee, attended the launch and spoke with Minister Robertson, other MPs, departmental leaders, and BCH’s new CEO, Ana Bailão. During his conversations, he emphasized that while BCH is an important step toward addressing homelessness and housing insecurity for low-income Canadians, it alone will not solve Canada’s widespread housing supply and affordability challenges. Policy change needs to continue in support of market housing, starting with passing the GST exemption in parliament.
Non-market housing is only part of the picture
BCH is focused exclusively on non-market housing. While critically important, it does not address the need for market-rate housing (for ownership or rental) that middle-class Canadians want and need to be able to actually afford. Without policy changes to support market-rate housing, buyers will remain on the sidelines. Without buyers, builders can’t build, and the government’s target of doubling housing starts to 500,000 per year will remain out of reach.
That means tackling the issues that are holding back the building of market-rate housing supply, including:
- Finalizing the parliamentary process and expanding the GST exemption on new homes, secondary suites, and renovations that result in added housing, like additional dwelling units (ADUs) and secondary suites;
- Addressing exorbitant development charges, zoning restrictions, and permitting delays;
- Easing the rising costs driven by new building codes and standards; and,
- Fixing persistent labour shortages through better domestic training and immigration pathways.
Without action on these fronts, many Canadians will still be unable to find or afford a home.
Fixing GST on new housing
Currently, one major area that is quelling home building efforts is the proposed elimination of GST on new homes, which still needs to be passed in Parliament.
For background, when the GST was introduced in 1991, the government created the GST/HST New Housing Rebate to protect affordability and promised to adjust it every two years. That never happened. As home prices soared, the thresholds stayed frozen, leaving most buyers of new homes without relief.
CHBA has long called for change and was encouraged by proposed changes to the GST made earlier this year. In May, Bill C-4 was introduced by the federal government to remove GST on homes under $1 million and reduce it for first-time buyers of homes up to $1.5 million, to be applicable to all homes sold as of May 27, 2025. However, the passing of the bill was put on pause when Parliament recessed for the summer, creating uncertainty that has left buyers on the sidelines. The result has been slowed sales and housing starts at a time when new housing supply is urgently needed.
CHBA has been vocal since the election campaign that the GST rebate would be far more effective in improving housing affordability if it was expanded to all buyers, raised to reflect prices in expensive markets, indexed to inflation, and applied to renovations that add housing units. But at minimum, Bill C-4 needs to be passed quickly.
Delays are keeping buyers and those looking to renovate to add new housing units on the sidelines, stalling the creation of new housing and worsening affordability. With Parliament back, passing Bill C-4 should be made an urgent, all-party priority. CHBA is actively engaged accordingly.