Finance Minister François-Philippe Champagne delivered the Carney government's first federal budget this week, billing it as a plan for "generational investments" to stabilize a Canadian economy rattled by trade uncertainty with the United States. The Canada Strong Budget 2025 put numbers to priorities: infrastructure, security and defense, skilled workforce development, and national projects to support Canadian economic independence.

For housing specifically, the budget committed to previously announced measures while ending programs deemed too expensive or ineffective. But the Canadian Real Estate Association says the budget falls short on concrete measures to help Canadians currently aspiring to homeownership, and it lacks support for missing middle housing that could keep the door open for more buyers.

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What Budget 2025 Actually Includes for Housing

The budget recommitted to the previously announced First-Time Home Buyers' GST Rebate for homes up to $1 million, with a reduction in GST for homes between $1 million and $1.5 million. The Parliamentary Budget Officer estimated this would save eligible first-time homebuyers an average of $26,832, with 71,711 new builds qualifying for GST relief over the lifetime of the program.

That's real money for first-time buyers. On a $1 million home, eliminating the 5% GST saves $50,000. In cases where the GST portion is rolled into the mortgage principal, the typical owner could expect to save $240 per month on mortgage payments.

The budget eliminated two programs: the Underused Housing Tax to streamline tax compliance, and the unimplemented CMHC Canada Secondary Suites Loan Program.

Changes to the National Housing Act will raise CMHC's guarantee limits to $1 trillion and decouple it from insurance limits to support homeownership and multi-unit rental construction.

The budget includes a $51 billion Build Communities Strong Fund, split into three streams over 10 years. That includes $17 billion for provincial and territorial infrastructure supporting housing-enabling infrastructure like roads and water/wastewater systems, plus health-related infrastructure and infrastructure at colleges and universities. Combined with other programs, this can be used to encourage lower development charges levied on new housing development.

Details around Build Canada Homes were confirmed, including $1 billion for transitional and supportive housing for those experiencing homelessness, and a $2.8 billion recommitment to the Urban, Rural, Northern and Indigenous Housing Strategy.

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CREA Supports Some Measures, But Says More Is Needed

CREA supports the government's focus on building new housing through Build Canada Homes, including investments in innovative homebuilding and support for vulnerable populations.

But the association points out a critical gap. "The budget offered limited concrete measures to support Canadians currently aspiring to achieve affordable homeownership, and support for more onboarding of missing middle housing is absent, risking slamming the door on homeownership for many."

That's not hyperbole. The numbers back it up.

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The Homeownership Rate Is Dropping for Young Canadians

From 2011 to 2021, the homeownership rate for 30 to 34-year-olds plunged from 59.2% to 52.3%, according to Census data. That's nearly a 7-point drop in one decade.

Meanwhile, aspirations to homeownership remain very high. New insights from Abacus Data, in partnership with CREA, found that among younger Canadians, 86% of non-homeowners aged 18 to 29 still want to buy a home someday.

The gap between aspiration and reality is widening. Young Canadians want to own homes. They have reasonable expectations about what homeownership looks like. But the pathway to getting there is blocked.

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The Missing Middle Problem

Traditional missing middle housing, like semi-detached homes and townhomes, makes up only slightly more than 11% of Canada's housing stock. That leaves young families and seniors stuck between housing options that are either too expensive, like single-family homes, or too small, like condo apartments.

CREA will continue to advocate for forward-thinking policies that unlock and incentivize large-scale development of missing middle housing, from townhomes to low-rise apartments, across Canada. Without that, the door to homeownership remains closed for too many Canadians.

The budget's $51 billion infrastructure fund could theoretically support missing middle development by funding the roads, water, and sewer systems needed for denser, walkable neighborhoods. But there's no specific requirement or incentive pushing municipalities to approve missing middle zoning or developers to build it.

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What's Actually in the $280 Billion Investment Plan

The government's plan rests on $280 billion in investments over five years: $115 billion for infrastructure, $110 billion for productivity and competitiveness, $30 billion for defense and security, and $25 billion for housing.

The housing allocation is the smallest of the four priorities. That tells you where housing sits in the government's hierarchy of concerns. Trade uncertainty, economic competitiveness, and security are driving policy decisions. Housing is important, but it's not the top priority.

The deficit is projected to hit $78.3 billion this fiscal year, with the debt-to-GDP ratio rising from 42.4% to 43.3% by 2028. Public debt charges are climbing to 13% of federal revenue by 2030.

Those numbers constrain what the government can do on housing. Massive new spending programs aren't politically or fiscally feasible. The focus has shifted to leveraging private sector investment through tax incentives and reducing regulatory barriers.

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The GST Rebate Could Spur Construction, Or It Could Just Raise Prices

A Desjardins Economics analysis noted that if the GST rebate program proves popular with first-time buyers, it could spur additional housing construction to meet higher demand. That would be a win, more supply to match increased demand.

But the analysis also warned that increased demand from homebuyers could push up home prices in the near term. If builders raise prices to capture some of the GST savings, first-time buyers don't get the full benefit. They're just paying higher base prices instead of GST.

That's the challenge with demand-side housing subsidies. They help buyers afford more, which is good. But they also increase what buyers are willing to pay, which signals to sellers and builders that they can raise prices. Unless supply responds quickly, the subsidy gets absorbed into higher prices rather than making housing more affordable.

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Immigration Cuts Will Reduce Demand, But Also Supply

The budget includes major cuts to immigration, with temporary residents like students and foreign workers to be cut by nearly 50%. That reduces housing demand in the short term, which could ease pressure on rental markets and slow home price growth.

But it also reduces the labor force available to build housing. Construction already faces severe labor shortages. Cutting immigration makes that worse, which slows new housing supply exactly when we need to be building faster.

The government is betting that the demand reduction outweighs the supply constraint. Maybe they're right. But it's a risky calculation that could backfire if construction slows more than demand.

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The Budget Needs Opposition Support to Pass

Prime Minister Carney's minority government needs opposition votes to pass the Budget Implementation Act. With one MP already crossing the floor to join the Liberals, Carney needs only two more votes or abstentions.

The Bloc Québécois appears unmoved. Leader Yves-François Blanchet called it "a red conservative budget which Mr. Harper might have signed, and there is nothing in there for Quebecers."

The NDP interim leader praised the budget's investment in infrastructure but raised concerns about the coming cuts. The seven-member NDP caucus will meet to discuss how to approach the budget vote, which could include abstaining.

Conservative Leader Pierre Poilievre has already said his party will oppose the budget and put forward an amendment aimed at "making Canada affordable again." Most notably, the budget blew past Poilievre's demand to keep the deficit under $42 billion, coming in at $78 billion instead.

Whether the budget passes remains unclear. And if it doesn't, the housing measures it contains won't happen.

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What CREA Is Watching

CREA will continue to monitor and analyze federal commitments to ensure policies support a fair, sustainable, and thriving housing system. The organization is looking for three things specifically:

Forward-thinking policies that unlock and incentivize large-scale development of missing middle housing across Canada. Without that, homeownership remains out of reach for too many young families and aging seniors looking to downsize.

Concrete measures to support Canadians currently aspiring to homeownership. The GST rebate helps, but it's not enough on its own. Buyers need access to credit, manageable down payment requirements, and a path to qualifying for mortgages that doesn't require impossible income levels.

Coordination between infrastructure investment and housing development. The $51 billion Build Communities Strong Fund could enable missing middle housing if it's deployed strategically. But if that money just goes to sprawl-enabling infrastructure on the urban fringe, it makes the problem worse.

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The Bigger Picture

Canada's housing system is no longer meeting the needs of its people. Both young Canadians and aging seniors, the country's largest demographic cohorts, are facing increasing barriers to finding suitable homes.

Despite growing financial pressures, homeownership remains a defining life goal. But the path to achieving it looks very different than it did a generation ago.

The budget includes some measures that will help. The GST rebate provides real savings for first-time buyers. The infrastructure fund could enable better development patterns. Build Canada Homes could increase supply.

But without specific support for missing middle housing, without policies that make it easier to build the townhomes and low-rise apartments that young families actually want, the budget leaves a critical gap unfilled.

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How Coldwell Banker Horizon Realty Can Help

At Coldwell Banker Horizon Realty, we understand that federal housing policy affects your ability to buy, sell, and invest in real estate. Whether you're a first-time buyer trying to navigate the GST rebate, a homeowner wondering how infrastructure investments will affect your neighborhood, or an investor evaluating how policy changes will impact property values, we provide the expertise and local market knowledge you need.

Budget decisions create winners and losers in real estate markets. Understanding how these policies play out in your specific area requires professional guidance from people who know the local market.

Contact Coldwell Banker Horizon Realty today to discuss how Federal Budget 2025 affects your real estate plans and how we can help you make informed decisions based on the changing policy landscape.

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The Bottom Line

Federal Budget 2025 includes measures that will help some homebuyers, particularly first-time buyers purchasing new homes under $1 million who will benefit from the GST rebate. Infrastructure investment could enable better housing development if deployed strategically.

But CREA is right to point out what's missing. Without specific support for missing middle housing, without policies that make it easier to build the townhomes and low-rise apartments that bridge the gap between condos and single-family homes, the budget doesn't solve the fundamental affordability problem.

Homeownership rates for young Canadians are dropping. Aspirations remain high. The gap between what people want and what they can actually achieve is widening. Budget 2025 takes some steps to address that, but it's not enough to fundamentally change the trajectory.

Whether the budget even passes remains uncertain. And if it doesn't, the housing measures it contains won't happen at all. For now, Canadians aspiring to homeownership are left waiting to see if opposition parties will support a budget that offers some help, but not nearly enough.