Prime Minister Mark Carney released a “mandate letter” to cabinet yesterday prioritizing housing affordability just days after Housing Minister Gregor Robertson shut down any talk of lowering the sky-high cost of homes.
In reality, the Liberals continue to offer subsidized rentals as a poor substitute for home ownership and are planning to have the government play an even larger role in housing.
Robertson, in his first public remarks on May 14, explicitly shut down the idea of lowering the cost of homes by saying, “No. I think that we need to deliver more supply, make sure the market is stable. It’s a huge part of our economy.”
“We need to be delivering more affordable housing. The Government of Canada has not been building affordable housing since the 90s, and we’ve created a huge shortage across Canada.”
Five days later in Rome, Carney dodged the question in a similar non-committal way, suggesting the answer “depends on the timeframe and the specific type of housing.”
But how can the government both make housing more affordable while maintaining the status of home ownership as a lucrative investment? Their responses don’t reflect leaders serious about making homeownership widely accessible but rather seem more inclined towards protecting existing asset values.
High home prices and affordable housing can only coexist through a government-subsidized rental market, which disadvantages homebuyers-in-waiting. This model offers “affordable housing” in the form of rentals while preserving investment returns for homeowners.
A major drop in housing prices would seriously impact the financial system. As Robertson pointed out, the real estate sector constitutes a substantial portion of our economy—up to 20 per cent of Canada’s GDP according to 2023 numbers. Any attempt to lower home prices would potentially unsettle homeowners and the growing number of investors alike, a risk this government appears unwilling to take.
Vancouver realtor John Coupar put it best in a recent True North article: “The reality is, they’re afraid to bring prices down because they don’t want to upset homeowners, but they also don’t want to lose renters,” said Coupar. “So they talk about ‘stabilizing’ the market and building ‘affordable rentals’ — but it’s a fantasy.”
Instead, the proposed Liberal solution centres on Minister Robertson’s likely first order of business as laid out in Carney’s 2025 election platform: a major push for government-run housing projects, including a new Crown corporation called ‘Build Canada Homes’ Crown corporation, as outlined in Carney’s federal election platform.
The organization aims to inject $25 billion into prefabricated home builders and provide an additional $10 billion in low-cost financing for “affordable” housing.
Carney’s recent statements and proposals align with his previous remarks, including a 2024 op-ed in the Globe and Mail, where he proposed easing density rules and dropping parking requirements for high-rises as part of a larger strategy to encourage high-density, multi-residential living.
These proposed solutions stand in contrast to the deeply ingrained Canadian dream of owning a single-family home, a desire still held by 61 per cent of respondents in a Wahi survey from this year.
Meanwhile, big investors have changed the housing market in Toronto and Vancouver. Institutional investors and real estate investment trusts now own nearly 200,000 rental suites, controlling 20–30 per cent of Canada’s purpose-built multi-family housing.
But much of this investment surge was fueled by government policies that artificially inflated housing demand and restricted supply—creating a market that appeared risk-free. Developers, encouraged by these conditions, increasingly built condos with investors in mind rather than homeowners. Now, that model is faltering. In Metro Vancouver alone, more than 2,000 new condos sit unsold and empty—a number expected to climb to 3,500 by year’s end.
Furthermore, the elephant in the room is how immigration is tightening the housing supply and driving up prices.
While Carney has committed to lowering immigration targets, there is virtually no proposed strategy to address loopholes abused by temporary immigrants who all require housing, including the concerning trend of international students filing asylum claims.
The strain of mass immigration over the past several years has already taken effect on housing availability. A 2019 Royal LePage study indicated that newcomers were projected to make 680,000 home purchases by 2024, representing 55 per cent of housing starts since 2020 based on Canadian Mortgage and Housing Corporation data. Although no further studies have been conducted on how many homes are being bought by new immigrants, CMHC data shows that nearly 1.24 million housing starts were completed between 2020 and 2024.
Policymakers have clear private-sector solutions at their disposal if they’re willing to act. Many have proposed that the focus should be on reducing municipal red tape, encouraging construction trades, expediting permits, lowering development charges, and aggressively reducing immigration loopholes. Subsidized rentals and increased government involvement have ultimately proven to do more harm than good.
