Report says plan will make only a 'modest contribution' toward easing housing crisis
Canada’s new federal housing agency is projected to deliver only a sliver of the supply needed to restore affordability, even as overall Ottawa housing spending is set to fall sharply over the next four years, according to Parliament’s budget watchdog.
In a report released Tuesday, the Parliamentary Budget Officer (PBO) said Build Canada Homes, launched in September with an “initial investment of $13 billion” in loans, financing and land, would add about 26,000 units between 2025‑26 and 2029‑30, roughly half of them affordable for low‑income households.
That represents a 2.1% lift in completions over the PBO’s baseline and covers just 3.7% of the agency’s own 690,000‑unit affordability gap to 2035.
“[Build Canada Homes] should be expected to make a modest contribution towards housing supply and affordability,” the PBO report said, citing the agency’s current funding envelope and program design.
At the same time, federal housing outlays across Canada Mortgage and Housing Corporation (CMHC) and other departments are projected to drop 56% from $9.8 billion in 2025‑26 to $4.3 billion in 2028‑29 as the Housing Accelerator Fund, Affordable Housing Fund, Canada Housing Benefit and several Indigenous housing envelopes reach their scheduled end dates.
Modest lift to supply from marquee agency
The agency’s $7.3 billion in planned accrual spending includes “$625 million to help community housing providers acquire rental apartments,” “$1 billion in contributions towards transitional and supportive housing,” and “$5.4 billion in grants, contributions and loan concessions for the supply of affordable housing,” the report said.
Those figures rest on current authorities and public plans; the PBO flags them as contingent on future policy decisions.
Fraser Institute analysts have criticized the federal government’s new BCH initiative, arguing that Ottawa’s track record in real estate management raises serious doubts about its ability to deliver on ambitious housing promises.
Similarly, Mike Moffatt, founding director of the University of Ottawa's Missing Middle Initiative, said that the framework still won't solve affordability for middle-class families despite its stated goal to "finance, build and industralize" social and mixed-income housing on federal lands.
For lenders, a narrower federal backstop
For mortgage and housing professionals, the numbers suggest a smaller federal backstop over the medium term, even as Ottawa pursues a high‑profile development role.
New supply attributed to Build Canada Homes remains modest next to the estimated national shortfall, while key programs under CMHC and other departments face expiry without renewed funding yet on the books.
Unless future budgets reverse course, lenders and developers could be operating in a market where federal capital is more tightly targeted, and where execution risk around Ottawa’s new building agency matters as much as headline spending totals.
The PBO’s wider work suggests that Canada needs 690,000 net new units on top of current building plans by 2035, while CMHC estimates a 2.6‑million‑unit gap and a requirement for roughly 3.2 million net new units by 2035 to ease pressures.
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