Building our way out of the housing deficit

The Canadian Home Builders’ Association (CHBA), which has been the voice of Canada’s residential construction industry since 1942, seeks a strong and positive role for the housing industry in Canada’s economy and in the life and development of our communities. The association has three levels – local, provincial and national. Together, all three levels work to ensure Canadians have access to homes that meet their needs at a price they can afford to pay, and that the interests of homebuyers and homeowners are understood by governments. We provide information to Canadians to help them become more informed and confident when they buy a new home, or hire a renovator to improve their existing one.

Much-needed immigration

Canada’s lack of sufficient housing supply is now well documented, and is a major contributor to the current housing affordability crisis. The federal government recognized that we need to more than double annual housing starts over the next decade and build 5.8 million homes to house people and address affordability. Canada’s largest cities are no exception. With much-needed immigration levels anticipated to reach record numbers in the coming years (up to 500,000 in 2025), building more homes – of all types – is crucial.

The current interest rate environment is increasing housing costs and contributing to inflation on the costs of owning or renting housing. It’s also contributing to the slowing of housing supply at a time when the opposite is needed, and the slowdown will have lasting effects on housing prices moving forward. Higher interest rates mean it is less affordable to finance housing, either to own or rent, which in turn means there are – and will be – less housing units of all types built. This is affecting affordability and availability for homebuyers and renters alike. And as the supply and demand imbalance continues to worsen, prices will be driven upward, further eroding affordability.

Policy levers

Municipalities hold a key role in increasing housing supply. Examples of areas they can help are by reevaluating and streamlining their processes and/or hiring more people so that they’re more efficient and can keep up with building and development permits, and by prioritizing transit-oriented development. In turn, the federal government must do what it can to encourage municipalities to get more homes built. The Housing Accelerator Fund is meant to do just that by providing incentive funding to local governments, encouraging initiatives aimed at increasing housing supply.

The federal government must also use its own policy levers to help where it can. The recent removal of GST on purpose-built rental is one such measure for which CHBA has long advocated. High interest rates further eroded the viability of purpose-built rental projects this year, shelving much needed new housing supply. The elimination of GST should help get those projects back on track. There should also be more investment for housing-enabling infrastructure to accelerate more development and help alleviate the astronomical development charges being levied against new home development – which raises the price of homes. And finally, a return to 30-year amortizations on insured mortgages would help first-time buyers enter the market, freeing up much-needed rental supply.

We need more homes of all types in Canada, and it will take a concerted effort to create the conditions where we can build our way out of our housing deficit and improve affordability for all.

See more content in our 2023 Builders' Annual.