CMHC says removing barriers could see thousands of new housing starts a year
First ministers from across Canada are meeting in Huntsville, Ontario this week to discuss how they're working together to combat the threat to the economy from US president Donald Trump's trade war.
Prime minister Mark Carney is set to deliver a detailed update on his government's negotiations with the US on Tuesday, while discussions between provincial leaders at the summit will focus on removing trade barriers and improving province-to-province cooperation.
The premiers meet as new modelling from Canada Mortgage and Housing Corporation (CMHC) indicates that the recent removal of interprovincial trade barriers could lead to an additional 30,000 housing starts annually, pushing the total close to 280,000 starts over time.
This move, which began with federal reductions on Canada Day and was followed by similar provincial actions, is seen as a significant step toward addressing Canada’s housing supply gap. The CMHC report suggests these changes could also increase household income by approximately 6%, ultimately improving rental market affordability as incomes are projected to grow faster than rents.
Economic impact and affordability
CMHC’s chief economist and senior vice-president of housing insights, Mathieu Laberge, stated that a stronger overall economy, lower unemployment, and higher household incomes are expected outcomes.
Initially, about 300,000 additional households could gain access to homeownership. However, this number is anticipated to diminish to around 150,000 by 2035 as increased incomes support higher housing demand and prices. Crucially, an equivalent number of rental units may become available, benefiting those seeking to enter or upgrade their rental situations.
Beyond internal barriers: The US tariff 'reality'
While internal trade liberalization is gaining momentum, Canada faces external trade challenges, particularly with the United States. Saskatchewan premier Scott Moe acknowledged what he called “the reality” of ongoing US tariffs.
Moe stated that achieving an entirely tariff-free deal with the US is unlikely, echoing prime minister Mark Carney’s warnings. According to a report from CBC News, Quebec premier François Legault emphasized the need for certainty in any trade agreement to encourage business investment.
Infrastructure and domestic sourcing
The CMHC report highlights that despite Canada being a net exporter of materials like wood, aluminum, iron, and steel, interprovincial transportation costs remain a significant barrier to utilizing domestic resources for construction. This underscores the need for “commensurate investments in transportation infrastructure” to fully realize the benefits of reduced trade barriers.
Ontario premier Doug Ford, hosting the premiers’ summit, advocated for “onshoring everything” and prioritizing Canadian-made goods as a response to US tariffs, a sentiment echoed by Moe. The discussions among premiers also included strategies for moving forward with a “more expansive agreement” on internal trade, aiming to counter external pressures by strengthening the domestic economy.
How do you think reducing trade barriers will impact Canada’s economy? Share your insights in the comments below.
