Canada’s housing sector must scale up to modernize and meet demand, CMHC analysis found
Canada’s housing sector is at a crossroads, with the Canada Mortgage and Housing Corporation (CMHC) warning that scaling up is essential to address the country’s deepening housing crisis.
In a recent analysis, Mathieu Laberge, chief economist and senior vice-president of housing insights at CMHC, argued that “unlocking housing supply at scale is critical if we want to move the needle on affordability and supply.”
Laberge pointed to international example, particularly the Netherlands, where consolidating and scaling the housing system have helped sustain supply and affordability.
“Canada can learn from the Netherlands, which has achieved scale in the housing sector, including with not-for-profit affordable housing providers,” Laberge said.
Small scale, big challenge
In 2024, Canada had more than 40,000 businesses employing workers in residential construction, but only six had more than 500 employees.
Nearly 70% were micro businesses with just one to four employees. The real estate leasing and management sector showed similar fragmentation, with over 80% of firms employing fewer than five people, a far higher proportion than the national average across all industries.
Not-for-profit housing providers face the same challenge. “Most Canadian not-for-profit housing providers manage a few hundred units, with larger ones overseeing between 1,000 and 2,000,” Laberge said.
In contrast, Dutch not-for-profit housing associations manage an average of 10,000 units, with some overseeing as many as 80,000.
Why scale matters
Laberge and other industry voices, such as Ray Sullivan of the Canadian Housing and Renewal Association, emphasized that scale brings more than just operational efficiency.
“Scaling up allows housing organizations to accumulate funds, resources and dedicate talent to innovating how housing is built and provided,” Laberge said.
Larger organizations can invest in new building techniques, adopt technologies like AI, and create a base demand for modular and prefabricated housing—practices already standard in countries like Sweden.
For not-for-profits, scale could mean less reliance on ad hoc government funding. The Netherlands offers a model where associations fund new development through rental income and loans, with government intervention only as a last resort.
“Imagine what could be achieved if Canada leveraged its AAA debt rating to strengthen and expand the not-for-profit housing sector,” Laberge said.
Driving change
The federal government’s push to double housing starts and embrace modular construction puts the onus on both private builders and not-for-profits to modernize.
“A necessary first step is to allow and facilitate for not-for-profits to leverage the equity in their current assets to build new affordable housing projects,” Laberge said.
With the right incentives and a focus on consolidation, Canada could unlock millions in dormant capital and accelerate the delivery of affordable homes. “Now is the time for the housing sector to rise to the challenge,” Laberge said.
Scaling up Canada’s housing sector—both private and not-for-profit—is essential to modernize construction, boost supply, and reduce reliance on government subsidies. International models show it can be done, but it will require bold action and industry-wide collaboration.
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