Canada’s housing affordability crisis isn’t going away, and the numbers help explain why. Since the 1970s, the population has more than tripled, but the number of new homes we’re building has barely changed. This crisis, a result of various factors like restrictive zoning rules and shortage of labor, has put prices beyond what most can afford.
According to a recent Fraser Institute report, housing starts have essentially flatlined over the past five decades. In 2024, Canada saw 245,367 housing starts, lower than the 271,198 reported in 2021. The peak happened way back in 1976, with 273,203 starts. We’ve got more people than ever, but we’re still building like it’s the ’70s.
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It’s not hard to see the fallout. Rents and home prices are through the roof, especially in cities like Toronto and Vancouver. The squeeze on supply makes it tough for almost everyone, but especially for first-time buyers and lower-income families just trying to get a literal foot in the door.
Several factors are getting in the way of building more homes. Zoning rules that limit density, slow municipal approval processes, and a lack of available land in urban areas are big barriers. On top of that, construction costs are rising, and skilled labor is in short supply, making it even harder to catch up.
Can the government fix Canada’s housing affordability?
Experts say there’s no silver bullet to fix Canada’s housing affordability. It’s going to take a mix of changes, including faster permitting, zoning reform to allow denser developments, and more investment in affordable housing. There’s also a push to encourage more rental builds and to rein in speculative buying, which can drive prices even higher.
The federal government is trying to move the needle in Canada’s housing affordability but has yet to solve the problem. In September 2024, Finance Minister Chrystia Freeland rolled out updates to mortgage rules. That included bumping the cap on insured mortgages from C$1 million to C$1.5 million and extending mortgage terms to 30 years for first-time buyers purchasing new builds. These measures will “incentivize more new housing construction and tackle the housing shortage,” said Freeland in a previous statement.
Still, not everyone’s convinced this will be enough. Tackling Canada’s housing crisis requires all hands on deck: federal, provincial, municipal, private sector, and community organizations working together. Without that kind of coordination, we’re not likely to see lasting change.
Canada’s population isn’t slowing down, and if our housing supply doesn’t keep pace, affordability will only get worse. We’ve been building too little for too long. It’s time for a serious look at how we plan, finance, and approve new homes.
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