Question Period Note: Market Housing Supply Gap

What is the Government of Canada doing to address the market housing supply gap?

• This government is committed to using every tool at its disposal to double the rate of homebuilding nationwide.

• This includes, through the creation of Build Canada Homes, building affordable homes, supporting builders with financing, and encouraging better building methods.

• The federal government is taking action to increase the supply of housing by cutting the GST on the construction of rental housing and by building on the success of programs that incentivize communities to reduce barriers, cut red tape, invest in housing enabling infrastructure, and make homebuilding easier.

• Canada is facing a housing supply gap, with the growth in demand for housing exceeding new construction. This scarcity has resulted in housing prices and rents growing far faster than Canadians’ income.

• One of the main drivers of the housing shortage has been the strong growth in housing demand driven by immigration-led population growth. Restrictive and time-consuming planning processes, increasing building costs, and low productivity in the construction sector have also impacted the pace of home construction.

• Various published estimates of the supply gap, based on different methodologies, indicate that millions of new homes need to be built over the next decade to meet the demand for housing.

  • In June 2025, Canada Mortgage and Housing Corporation released a Housing Supply Gap report estimating that housing starts would need to increase from approximately 250,000 to 430,000 – 480,000 annually over the next decade to restore affordability to pre-pandemic levels.
  • In August 2025, the Parliamentary Budget Office estimated that 690,000 additional housing units, on top of baseline completions, will be needed by 2035 to eliminate the housing gap in Canada.

• The federal government has also introduced a number of initiatives aimed at increasing the supply of market housing, including:

  • Removing the Goods and Services Tax on the construction of new rental buildings to bring down the costs of homebuilding;
  • Providing a $30 billion top-up to a flagship housing program – the Apartment Construction Loan Program – that provides low-interest loans to builders and developers to boost the construction of rental housing;
  • Launching the $4.4 billion Housing Accelerator Fund – a program that incentivizes local government to remove barriers that slow the construction of housing; and,
  • Launching a Housing Design Catalogue to help change how homes are built by simplifying the delivery of housing across the country.

• To better match immigration with the capacity to build new homes, the Government of Canada announced, in the fall of 2024, a reduction in permanent resident targets from 500,000 to 395,000 in 2025, with admissions falling to 365,000 in 2027. This decrease was coupled with cuts to temporary immigration to 5% of the total population by the end of 2026.

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