Canada's federal government has launched a major initiative to address the nation's housing affordability crisis through targeted investments and innovative construction strategies. On September 14, 2025, Prime Minister Mark Carney announced Build Canada Homes, a new agency backed by an initial $13 billion in funding. This agency aims to double housing construction rates, focusing on affordable and non-market options to support low-income households, middle-class families, and those experiencing homelessness. The launch follows public consultations that shaped its framework, aligning with the government's election pledge to create a centralized federal housing entity.

Build Canada Homes operates initially as a Special Operating Agency within Housing, Infrastructure, and Communities Canada (HICC), with plans to transition into a standalone entity by early 2026. It reports to Minister Gregor Robertson, who oversees its investment policies and governance. The agency consolidates federal efforts by transferring responsibilities from entities like the Canada Lands Company, providing access to 88 federal properties spanning 463 hectares suitable for development. This land bank, equivalent in size to downtown Ottawa, will be leveraged to reduce development costs by eliminating land acquisition expenses.

The initiative responds to Canada's acute housing shortage, where the Canada Mortgage and Housing Corporation (CMHC) estimates a need for 3.5 million additional homes by 2030 to restore affordability. In 2024, national housing starts reached 240,267 units, but this falls short of the projected annual requirement of 480,000 units by 2035 to meet demand driven by population growth and immigration. Regions like Toronto and Vancouver have seen construction slowdowns, with Toronto's condominium starts dropping 60 percent in the first half of 2025, exacerbating rental vacancies below 1.5 percent in major cities.

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Leadership and Expertise

Ana Bailão was appointed as the inaugural Chief Executive Officer of Build Canada Homes. Bailão, who immigrated from Portugal to Canada at age 15, holds a Bachelor of Arts from the University of Toronto and has extensive experience in housing policy. She served on Toronto City Council from 2010 to 2022, representing Ward 9, and held the role of Deputy Mayor from 2017 to 2022. During her tenure, she chaired the Planning and Housing Committee, spearheading initiatives like Housing Now, which utilized public lands to develop over 10,000 affordable units. Bailão also contributed to boards including CreateTO, Toronto Community Housing, and the Toronto Public Library.

Post-council, Bailão joined Dream Unlimited as Head of Affordable Housing and Public Affairs in January 2023, advancing strategies that integrated affordability into large-scale developments. She briefly ran for Toronto mayor in 2023, receiving endorsements for her housing expertise but losing to Olivia Chow. Returning to Dream Unlimited, she focused on public-private partnerships until her appointment. In her statement, Bailão described the role as a "personal mission," emphasizing transformations in lives through stable housing. Her track record includes catalyzing public-private collaborations that delivered 2,500 affordable units in Toronto, making her a fitting leader for an agency tasked with scaling similar models nationally.

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Strategic Pillars of Build Canada Homes

Build Canada Homes is structured around three pillars to streamline housing delivery.

The first pillar involves direct building partnerships with industry, governments, and Indigenous communities to construct affordable housing rapidly. The agency acts as a "one-stop shop," providing low-cost financing and expedited approvals for large projects. It will derisk developments by offering incentives and using public lands, enabling private builders to focus on construction. This approach draws from successful models like Singapore's Housing and Development Board, which has built over 1.2 million units since 1960, achieving 90 percent homeownership.

The second pillar emphasizes financing and innovation in construction technologies. Build Canada Homes will deploy capital for methods like modular and factory-built housing, potentially reducing timelines by 50 percent, costs by 20 percent, and emissions by 20 percent. Bulk procurement and long-term loans will mainstream these techniques, prioritizing low-carbon materials like mass timber. This aligns with Canada's National Housing Strategy, which has invested $82 billion since 2017 but faced criticism for slow delivery, with only 150,000 units completed by 2024.

The third pillar integrates the Buy Canadian policy, announced in September 2025, mandating the use of domestic materials such as lumber, steel, and aluminum. This is expected to strengthen supply chains and create high-paying jobs, with estimates from similar policies suggesting up to 100,000 new positions in construction and manufacturing over five years. It responds to global trade pressures, including U.S. tariffs under President Donald Trump, by bolstering domestic industries. For context, Canada's forestry sector employs over 200,000 people and contributes $25 billion to GDP annually, which this policy aims to expand.

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Detailed Breakdown of Initial Investments

The agency announced four immediate investments totaling $3.5 billion from the $13 billion pool, with further details forthcoming.

The flagship project develops six federal sites for 4,000 factory-built homes, with scalability to 45,000 units. Sites in Dartmouth (Nova Scotia), Longueuil (Quebec), Ottawa (Ontario), Toronto (Ontario), Winnipeg (Manitoba), and Edmonton (Alberta) will feature mixed-income communities. Construction, starting in 2026, employs a "direct-build" model overseen by the agency. This mirrors British Columbia's Modular Housing Initiative, which delivered 2,000 units since 2017 at 30 percent lower costs. A $1.5 billion Canada Rental Protection Fund will acquire at-risk rental buildings, inspired by British Columbia's program that preserved 1,500 units since 2023. It targets buildings vulnerable to redevelopment, ensuring long-term affordability amid national average rents of $2,202 in August 2025. Another $1 billion funds transitional and supportive housing for homeless individuals, collaborating with partners for integrated services. This addresses Canada's 235,000 annual homelessness cases, building on programs like Reaching Home, which supported 50,000 people in 2024.

Finally, a partnership with Nunavut Housing Corporation will build over 700 units, with 30 percent off-site construction. This tackles Nunavut's 52 percent overcrowding rate, where average home costs exceed $400,000.

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Broader Economic and Policy Context

Build Canada Homes integrates with other federal measures, including Bill C-4's GST elimination on new homes up to $1 million and reductions up to $1.5 million for first-time buyers, potentially saving $50,000 per purchase. It complements CMHC's ongoing programs, such as the Apartment Construction Loan Program, which approved $20 billion in loans for 30,000 units in 2024.

Economically, the initiative could boost GDP by 1.5 percent annually, based on industry reports, while creating skilled jobs in trades, where shortages exceed 80,000 positions. Internationally, it echoes Sweden's Million Homes Programme, which built 1 million units from 1965-1974, reducing shortages significantly.

Critics, including Conservative Leader Pierre Poilievre, argue it adds bureaucracy, advocating instead for municipal incentives and tax cuts. However, supporters point to potential for 200,000 new affordable units by 2030, per CMHC projections.

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Implications for Canadian Real Estate

This $13 billion investment positions Build Canada Homes to transform housing supply, particularly in urban centers where affordability indices show homes requiring over 60 percent of median income. By prioritizing non-market housing, it could stabilize rents, which rose 8.9 percent year-over-year in 2024. Regional impacts include relief in high-cost areas like Vancouver, where average prices hit $1.2 million, and Toronto at $1.1 million.

At Coldwell Banker Horizon Realty, we analyze these developments to assist clients in navigating opportunities. This agency signals increased availability of affordable options, potentially influencing market dynamics. Contact us for insights on how it aligns with your real estate goals.