Letter to a minister: What the federal government should—and shouldn’t—do to solve the housing crisis

Another challenge is Canada’s current economic model, which concentrates growth in a handful of major cities, placing intense pressure on local housing markets. While the core challenge is our inability to build homes quickly enough, this constraint has become even more acute in recent years as high levels of immigration have further accelerated demand. Canada ranks among the lowest in the G7 for housing supply responsiveness—a reflection of restrictive zoning, slow approvals, and high development fees. This trend must be reversed. Some of this challenge lies beyond your control; your colleague, the minister of immigration, refugees and citizenship, must ensure immigration levels align with Canada’s housing capacity and available social supports to sustain public confidence. In this environment, the federal government should focus less on the bricks and mortar, but rather empower local and private actors to build housing, while using its fiscal and regulatory levers to guide outcomes. You should: Work with provinces to reduce regulatory delays and continue to harmonize building codes. Municipal officials should be pressed to align local bylaws with harmonized codes to avoid undermining provincial efforts. Tie infrastructure funding to results by rewarding cities that meet a pre-determined per capita threshold of new homebuilding annually and reducing funding for those that fall short. Reward municipalities that streamline permitting and reduce financial barriers to construction. Work with provinces to create new student housing and rehabilitate old housing on and near campuses to release pressure on the general market in smaller university towns. Introduce tax credits for trades training and construction workforce development. The middle matters: support a balanced approach Budget 2025 rightly recognizes the centrality of housing as an underpinning of a healthy society, but its execution risks deepening the affordability divide. The $13 billion Build Canada Homes initiative, while well-intentioned, focuses heavily on subsidized units for vulnerable populations. This emphasis leaves middle-income families underserved—those who do not qualify for social housing but cannot afford market rates. Further, Canada’s housing stock increasingly caters to transient renters or high-income earners, with few options for families seeking long-term stability. The market is saturated with micro-units and luxury condos, while affordable three-bedroom apartments and modest single-family homes are disappearing from urban cores. And family housing is not just a nice to have but is shown to be an important factor in young people’s decisions to have children. Federal policy must explicitly target this “missing middle” to restore balance and ensure communities remain livable for working families. This change in the mix of housing types over the past several decades, away from detached family homes in favour of apartment buildings, has meant that housing shortages are accentuated as the demand for single family homes has increased. As of 2022, apartments comprised 53 percent of new housing unit completions, up from 20 percent in 2000. The annual supply of new detached homes, which was once eight per thousand adults in Canada each year, is now about two per thousand. This has caused a significant increase in the price of single-family homes as demand for these types of dwelling has been on the rise since 2021. You should: Rebalance housing investment to maintain support for vulnerable populations but shift focus toward market-driven solutions for middle-income Canadians. Federal policy must explicitly support the construction of three-bedroom apartments, townhomes, and modest single-family homes that meet the long-term needs of working families. Introduce clear targets, timelines, and performance metrics for federal programs like Build Canada Homes. Reduce costs and increase efficiency The past decade has seen a tremendous increase in federal spending on housing and infrastructure by almost 150 percent to $8 billion dollars. While housing and infrastructure remains a core federal priority, and major transfer programs such as the Canada Community Building Fund, are important to achieving outcomes, there are some key areas where reductions should be considered: While the significant investments in green infrastructure over the past decade were well-intentioned, they are not the most efficient way to target greenhouse gas emissions reductions and, like other climate-focused spending, have not led to a meaningful reduction in emissions in Canada. Programs such as the Green and Inclusive Community Building Program ($375 million in 2025) and the Natural infrastructure fund ($22.6 million in 2025) should be eliminated. The new Investing in Canada Infrastructure Fund ($2.5 billion in 2025) should be reduced by shrinking the “green” stream of investments. CMHC spending has surged 171 percent since 2015 to $5.4 billion, underscoring the need to refocus the agency on its core business. The policy roles it has taken on in recent years, including on climate and sustainability, Indigenous housing partnerships and policy innovation, risk duplication with other federal departments and are significant mandate creep for an organization created to provide mortgage loan insurance and securitization. Conclusion Canada’s housing system is stalled—not for lack of ambition, but due to misaligned priorities and fragmented execution. By rebalancing its role, the federal government can catalyze a more responsive, inclusive, and sustainable housing market. I urge you to consider these recommendations as part of a renewed federal strategy—one that empowers families, respects market realities, and restores affordability for the middle class.