Housing affordability in Canada is deteriorating at an alarming pace, according to newly released federal briefing materials prepared for Housing Minister Gregor Robertson. The documents, made public this week, outline how rising costs, population growth, and insufficient affordable housing are deepening the country’s housing crisis.
The records note that both vulnerable and middle-income households are struggling to secure housing. “Vulnerable populations and lower-income households are struggling to have their basic housing needs met due to a lack of suitable affordable housing,” the documents state.
Middle-class families are also facing mounting pressures, with many forced to remain in rental units longer, which reduces rental availability and pushes rents even higher.
Canada’s population growth, among the fastest in the G7, is compounding housing shortages and driving up costs. The government acknowledges that recent steps to moderate immigration levels will help temper demand, keeping prices lower than they otherwise would be.
At the same time, residential construction costs have surged 58 percent since 2020, partly due to U.S. tariffs. The lack of investment in below-market homes has worsened conditions for newcomers and low-income Canadians. Non-market housing makes up only four percent of Canada’s total supply, well below the OECD average of seven percent.
Projections in the federal briefing materials, drawn from BMO, RBC, the Canadian Real Estate Association, and the Canada Mortgage and Housing Corporation, suggest home prices will grow faster in 2025 before cooling in the following two years. Housing starts are expected to slow this year but remain above the 10-year average.
The rental market is expected to see higher vacancy rates as supply expands and population growth eases.
Meanwhile, homelessness is worsening. Average nightly use of shelters increased by 43 percent between 2020 and 2023, with stays becoming longer, a sign that barriers to permanent housing are intensifying.
To address the crisis, Ottawa will soon launch the Build Canada Homes agency, designed to speed up affordable home construction and push builders to adopt modern technologies. The records note Canada’s construction industry is lagging behind international peers in innovation.
Prime Minister Mark Carney confirmed during this week’s Liberal caucus retreat that the agency will be rolled out in the coming days, marking a key step in the federal government’s housing strategy.
