Canada’s 2025 Federal Budget: A Deep Dive into Housing Initiatives
Summary:
The Liberal government’s 2025 budget, tabled under Prime Minister Mark Carney, pledges $25 billion over five years to address Canada’s housing supply crisis. With a focus on affordable housing and homelessness, the budget introduces Build Canada Homes, a federal agency aiming to construct 430,000 to 480,000 new units annually to restore affordability to 2019 levels. Experts like Kevin Lee of the Canadian Home Builders’ Association and Clay Jarvis of NerdWallet Canada express concerns about the lack of private sector incentives and collaborative efforts across government levels. The GST exemption for first-time homebuyers is highlighted, but critics argue it falls short of addressing broader affordability challenges.
What This Means for You:
- First-time homebuyers: Benefit from GST exemptions on new builds up to $1.5 million, reducing upfront costs.
- Affordable housing seekers: Expect increased availability of co-op and community housing through Build Canada Homes.
- Investors and developers: Watch for flexible financial incentives and public land utilization to stimulate housing construction.
- Future outlook: Success hinges on private sector involvement and intergovernmental collaboration to meet housing targets.
Original Post:
By Sammy Hudes
The Liberal government’s 2025 budget tabled Nov. 4 — its first under Prime Minister Mark Carney — pledged to spend $25 billion on housing over the next five years. The budget noted Canada’s “steep housing supply gap,” with the Canada Mortgage and Housing Corp. estimating 430,000 to 480,000 new housing units are needed per year in the next decade in order to restore affordability to 2019 levels.
That would represent around double the current pace of home construction across the country. Canadian Home Builders’ Association CEO Kevin Lee called it an “aspirational” target and said there’s still much that would need to change in order to achieve it, including when it comes to federal policy.
Ottawa said last week it would “supercharge” the housing industry with an initial spend of $13 billion over five years toward Build Canada Homes, a federal agency announced by the Liberals in September that aims to build and finance more affordable homes.
But the budget said the agency would focus primarily on non-market housing, highlighting a commitment to tackle homelessness while also building deeply affordable community and co-op housing for low-income Canadians.
Lee said that while it’s important to create more social housing, it represents less than one per cent of the total housing stock that gets built. “We really need to focus on the big picture here and really get more going on home ownership,” he said.
NerdWallet Canada spokesman Clay Jarvis said the budget was short on details on how Ottawa plans to incentivize private investment to catalyze housing supply growth. He said the budget seemed to put “an awful lot of housing eggs in the Build Canada Homes basket.”
Toronto real estate broker Cailey Heaps said many in the industry are hoping to see more collaboration between federal, provincial and municipal governments to help align conditions and remove barriers to home ownership.
The federal government announced earlier this year it would eliminate the GST for first-time buyers on some homes, a measure included in last week’s budget. The relief applies to new builds up to $1 million, while Ottawa will also reduce the GST for first-time homebuyers on new homes between $1 million and $1.5 million.
But Lee said the measure doesn’t go far enough to help improve housing affordability. He said the GST exemption should be extended to all buyers, not just those purchasing their first home, along with those renovating their properties to build secondary suites or accessory dwelling units.
Jarvis said the struggling condo market in regions like Toronto and Vancouver could also benefit from such relief. He worried the measure, as it stands, could amount to a “gift to developers.”
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budget 2025 Canadian Home Builders’ Association Clay Jarvis gst break gst exemption housing supply Kevin Lee sammy hudes The Canadian Press
Last modified: November 13, 2025
Extra Information:
CMHC Housing Market Outlook: Understand the current trends and forecasts shaping Canada’s housing supply.
National Bank Housing Analysis: Gain insights into regional housing market dynamics and affordability challenges.
People Also Ask About:
- What is Build Canada Homes? A federal agency focused on constructing affordable and non-market housing units.
- How does the GST exemption help first-time buyers? It reduces upfront costs on new builds up to $1.5 million, making homeownership more accessible.
- What are the main barriers to housing supply growth in Canada? High development charges, lack of private investment, and intergovernmental coordination.
- Will the 2025 budget improve housing affordability? It aims to, but success depends on broader policy implementation and private sector involvement.
Expert Opinion:
Kevin Lee emphasizes that while initiatives like Build Canada Homes are a step forward, addressing Canada’s housing crisis requires a multifaceted approach that prioritizes homeownership across all demographics. Without significant private sector engagement and streamlined intergovernmental efforts, ambitious targets may remain unmet.
Key Terms:
- Canada 2025 federal budget housing
- Build Canada Homes initiative
- GST exemption first-time homebuyers
- Canadian housing supply crisis
- Affordable housing programs Canada
- Mark Carney housing policy
- Kevin Lee Canadian Home Builders’ Association
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