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Canada’s housing affordability and access have emerged as defining social and economic issues, consistently topping national opinion polls. In the most recent federal election, housing dominated campaign debates—underscoring the financial strain on households and the urgent need for reform. At the heart of this crisis lie systemic barriers embedded in outdated legal and regulatory frameworks, challenges that must be addressed if Canadians are to secure safe, affordable homes.

In this article, we examine the root causes of Canada’s housing crisis, outline the principal policy proposals with an objective lens, and assess their merits against the legal and regulatory frameworks that govern development and affordability

The Problem: Affordability and Supply Constraints

At the core of Canada’s housing issue is a sharp imbalance between supply and demand. Population growth driven by immigration and urban migration has significantly outpaced the construction of new homes. This has led to historically low housing inventory in major urban centers, driving up property values and rental costs. According to Statistics Canada, Canada’s population grew by 1.27 million people in 2023 (a 3.2 % increase)[1], yet Canada Mortgage and Housing Corporation figures show builders started only 240 267 new homes that year[2], equating to roughly one new home for every 5.3 additional Canadians.

Compounding the issue is a sharp rise in mortgage rates. Following aggressive monetary tightening by the Bank of Canada in response to inflationary pressures, borrowing costs have surged. Higher interest rates have not only reduced the purchasing power of prospective homeowners but have also constrained developers’ ability to finance new projects.

Regulatory barriers further exacerbate the situation. Zoning laws, land-use restrictions, and lengthy approval processes at the municipal level have slowed the pace of new housing developments. These constraints limit the ability to scale construction in response to market needs, particularly in high-demand regions.

The Solution: Policy & Promises

Notably, in the 2025 federal election, all major political parties included housing affordability in their platforms. The Liberals emphasized federal development and tax relief, the Conservatives proposed deregulation and market-based solutions, and the NDP advocated for non-market housing and renter protections. While methods vary, a rare cross-party consensus has emerged on the urgency of building and tackling the housing crisis.

Under the leadership of the newly elected Prime Minister Mark Carney, the federal government has unveiled a multifaceted housing strategy designed to tackle Canada’s affordability crisis head-on. At its heart is the creation of Build Canada Homes, a standalone agency empowered to identify under-utilized federal lands, 83 properties across nine provinces and two territories have already been flagged for potential residential development for affordable units[3]. By centralizing these functions, the Carney-led government aims to eliminate the bureaucratic bottlenecks that have hampered large-scale developments in the GTA where approvals can drag on for years. Recognizing that more supply alone won’t make homes affordable, the plan proposes carving out GST relief for first-time buyers, eliminating the 5 percent GST on new homes priced under $1 million to allow for qualifying purchasers up to $50,000 on a single transaction. The news government’s policy framework also plans low-interest mortgage pools and tax credits for purpose-built rental developments.

The objective is to ensure that municipalities no longer face growth bottlenecks under a coordinated effort by federal, provincial and local governments to modernize zoning regulations. By lifting arbitrary density caps, reducing mandatory parking requirements and fast-tracking approvals in key transit corridors, the plan promotes mid-rise and transit-oriented development. These combined reforms are bookmarked to achieve the elusive balance of housing supply, affordability and delivery speed that the market has long failed to provide.

Real estate professionals should keep a close eye on emerging legislation and federal–provincial accords set to reshape Canada’s housing landscape. While the proposals are promising, moving from blueprint to build will require political wisdom and genuine national consensus. Only by uniting stakeholders and translating commitments into concrete action will we know whether we’ve finally overcome the stumbling blocks or remain anchored at the drawing-board.

This article is prepared by Kormans LLP to help you navigate evolving policy developments, for further guidance on how they may affect your projects, please reach out at info@kormans.ca or (905) 270-6660. foreclosure, we’re here to support you.

[1] https://www.reuters.com/world/americas/canada-clocks-fastest-population-growth-66-years-2023-2024-03-27/

[2] https://toronto.citynews.ca/2025/01/16/cmhc-says-total-housing-starts-in-2024-up-2-from-2023/

[3] https://www.canada.ca/en/public-services-procurement/news/2024/11/government-of-canada-unlocks-12-more-federal-properties-for-housing.html?utm_source=chatgpt.com

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M. W. Faizan is an Associate Lawyer at Kormans LLP. You can reach M. W. Faizan here: mwfaizan@kormans.ca.

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