Home construction must double over next decade to restore 2019 affordability: CMHC
Cranes are seen above a condo development and other housing projects under construction, in Coquitlam, B.C., on Tuesday, May 16, 2023. THE CANADIAN PRESS/Darryl Dyck
Canada Mortgage and Housing Corp. says up to 4.8 million new homes will need to be built over the next decade to restore affordability levels last seen in 2019 based on projected demand.
The national housing agency released its latest supply gaps estimate report on Thursday, which said between 430,000 and 480,000 new housing units are needed per year across the ownership and rental markets by 2035.
That would represent around double the current pace of home construction in Canada.
A total of 90,760 housing starts have been recorded so far this year through May, and CMHC projects an average of 245,000 starts annually over the next 10 years under current conditions.
'Doubling the pace of housing construction in Canada is achievable, but not without a significantly larger and modernized workforce, more private investment, less regulation, fewer delays, and lower development costs,' said CMHC deputy chief economist Aled ab Iorwerth in a press release.
'It will also require significant innovation in construction technology and growth in labour productivity.'
In 2023, the agency estimated Canada would need to build an additional 3.5 million housing units by 2030, on top of 2.3 million that were already projected to be built by that year, to reach affordability levels seen in 2004.
In its latest report, CMHC said that timeline 'is no longer realistic,' especially after the post-pandemic price surge seen across the housing market.
'COVID-19 significantly changed the affordability landscape across the country,' the report said.
'As a result, we're changing our aspiration to restoring affordability to levels seen just before the pandemic. This change also highlights how widespread the housing affordability challenge has become across Canada.'
The agency defines affordability as the amount of income that goes toward housing. In general, it aims to return to levels of affordability at which adjusted house prices are no higher than 30 per cent of average gross household income.
But that ratio is projected to reach 52.7 per cent by 2035 in a 'business-as-usual' scenario, up from 40.3 per cent in 2019. Doubling projected housing starts over the next decade would bring the figure down to 41.1 per cent of income being allocated for homebuying nationally, according to the agency.
During the federal election campaign, the Liberals promised to double the rate of residential construction over the next decade to reach 500,000 homes per year.
The plan emphasized scaling up prefabricated housing construction. It said a new entity called Build Canada Homes would provide $25 billion in debt financing and $1 billion in equity financing to prefabricated homebuilders to reduce construction times by up to 50 per cent.
Returning to 2019 affordability levels in the next decade would lead to house prices being roughly one-quarter lower than where they would otherwise be in 2035, the CMHC's report added. Average rents would also be about five per cent lower.
The report included regional breakdowns, which show Ontario, Nova Scotia and B.C. have the most significant housing supply gaps by province.
Montreal faces the largest gap of any major city, where home ownership costs have also risen faster than other regions in recent years, followed by Ottawa, where CMHC said new supply has not kept pace with increased housing demand.
In Toronto, despite increased rental construction in recent years, the region is lacking home ownership options that match local incomes, and CMHC estimated a 70 per cent increase in homebuilding over the next decade would help to improve affordability issues.
For Vancouver, it said an estimated 7,200 additional homes are needed annually above the 'business-as-usual' scenario, an increase of 29 per cent.
It estimated Calgary, which has seen record levels of home construction for three straight years, will need 45 per cent more new homes annually. Meanwhile, no additional supply is required beyond what is currently projected in Edmonton, as sufficient market housing is expected to be built in the region to maintain affordability by 2035.
---
Sammy Hudes, The Canadian Press
This report by The Canadian Press was first published June 19, 2025.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
25 minutes ago
- Globe and Mail
Smart Homes, Safer Communities: Christopher Mickey's Call for Action on HVAC Reform
From Hurricane Relief to Everyday Energy Bills, One Entrepreneur Pushes for Smarter, More Reliable Home Systems In a new exclusive interview, Florida-based entrepreneur Christopher Mickey shares a message that reaches far beyond his own business: America needs to take HVAC systems—and the people they serve—more seriously. 'Bad HVAC isn't just uncomfortable. It's expensive, inefficient, and, in some cases, dangerous,' says Mickey, founder of Airheads HVAC. 'Every home we flip, we see the same problems: outdated systems, poor installations, and zero energy strategy.' Having personally flipped more than 545 homes with his wife, Mickey's journey from the restaurant industry to real estate and HVAC has given him a front-row seat to the systemic problems facing homeowners. 'You'd be shocked at how often families are stuck with high energy bills and unreliable systems,' he notes. 'These aren't luxuries—they're essentials.' The timing of Mickey's message is urgent. HVAC systems account for nearly 50% of the average U.S. household's energy usage, and with energy prices continuing to climb, inefficient setups are costing families thousands. Yet too few know how to spot or solve the problem. 'There are smart solutions out there—things like high-efficiency systems and smart thermostats—but people need to be educated and empowered,' he says. Mickey believes the answer lies not just in better technology, but in accountability. 'We treat every job like it's our own home. That's missing in this industry.' In the interview, Mickey also speaks about his team's response to Hurricane Helene, when they provided free and discounted HVAC services to families left without cooling. 'If you've got the tools to help, use them,' he says. 'It's that simple.' Mickey's message is clear: home systems should work for the people living in them—not against them. He urges communities to take action: Get your systems checked regularly. Invest in smart, energy-efficient solutions. Hold service providers to a higher standard. Speak up when service fails. 'This isn't just about saving money—it's about safety, sustainability, and respect for people's homes,' says Mickey. 'You don't need to be in HVAC to help fix this. You just need to care.' About Christopher Mickey Christopher Mickey is a hands-on entrepreneur and founder of Airheads HVAC. After starting in the restaurant business at 21 and flipping over 545 homes, he launched Airheads to solve the HVAC problems he saw every day on the job. His work is driven by quality service, smart technology, and a deep commitment to community support. To read the full interview, click here. Contact: Info@ Media Contact Contact Person: Christopher Mickey Email: Send Email City: New Port Richey State: Florida Country: United States Website:
CTV News
26 minutes ago
- CTV News
Competition Bureau pushes for air travel changes as passengers face high costs and limited choice
Canadians appear on a "YYC" sign at Calgary International Airport in Calgary, Alta., Monday, Oct. 10, 2022. (THE CANADIAN PRESS/Jeff McIntosh) A new report from Canada's Competition Bureau has called for significant reforms aimed at increasing competition in the domestic airline market, reducing airfare prices, and reining in government powers that could hinder a truly competitive environment. The news is promising for airline passengers like Kelsey Wokke who says she just spent $1,000 for a roundtrip flight between Vancouver and Calgary. 'That's absolutely crazy to me,' she said. 'So yes I do think there should be more competition in Canada's airline prices.' 'It's also interesting how if you look at the cost breakdown of your ticket, just how much of it isn't going to your actual flight and directly into airport fees instead. So finding ways to put that money elsewhere would be nice.' Released Thursday, the Competition Bureau's report on the air travel industry advocates for a 'leverage (of) international capital and experience to strengthen domestic competition,' including through raised ownership caps for investors outside Canada. Some of the highlights include recommending major reforms to rebalance the playing field. Among them: raising the cap for foreign ownership of airlines from 25 per cent to 49 per cent, and creating a new class of 'domestic-only Canadian airlines' that could be 100 per cent foreign-owned—a model already in use in Australia. Passengers bear the burden of fees The Competition Bureau also advocated for the Canadian aviation system to make changes to its 'user-pay' model, in which airlines and passengers cover the full costs of building and operating airports and navigation services. These fees account for 30 cents of every dollar passengers pay on traditional full-service airlines, and an even higher share on ultra-low-cost carriers. The breakdown includes: Fuel tax: 1 per cent Air travelers security charge: 3 per cent Nav Canada air navigation charges: 5 per cent Airport landing, terminal, and operational fees: 20 per cent Competition commissioner Matthew Boswell argues this fee structure disproportionately impacts travelers and new market entrants, adding to the challenge of fostering a more competitive and affordable domestic airline market. 'With the right policy changes, governments can create the conditions for new airlines to grow and compete – and give Canadians access to more affordable, reliable options for flights.' Independent aviation analyst Rick Erickson called the report one of the most thorough he's seen, but warned that 'we've heard this before.' 'The structural problem is we don't have enough secondary airports, which stifles new entrants,' he said. 'And the fee structure is nuts—aviation pays more than 100 per cent of its costs. Marine pays 10 per cent, Via Rail gets a subsidy, but aviation gets punished.' Erickson supports the idea of loosening foreign ownership rules. 'We've got to allow more entrants into the market. Full stop.' Nine per cent decrease in airfare for every new competitor added Research from the Competition Bureau shows that when just one new competitor flies on a route between two cities, airfares go down by nine per cent on average. Currently, two airlines—Air Canada and WestJet—handle between 56 and 78 per cent of domestic passenger traffic at Canada's major airports. Over time, they have divided the market geographically, with Air Canada dominating the east and WestJet the west, leading to diminished competition between them, the report notes. The Competition Bureau identifies part of the problem as a restrictive regulatory environment that limits international competitors. Restrictions on non-Canadian airlines operating domestic flights, along with caps on foreign investment, have hindered new and smaller players from entering the market—restrictions the Bureau believes could be eased to foster greater competition. Balanced regulation and consumer protection Gabor Lukacs, President of Air Passenger Rights, welcomed the report's push to reduce government intervention that has historically hindered competition. 'We are pleased that the Competition Bureau adopted our position on opening up domestic air travel to foreign competition and improving transparency around subsidies for remote routes,' Lukacs said. 'Importantly, the report recommends curtailing the minister's ability to override expert decisions on anti-competitive agreements between airlines. This creates a necessary balance between political interests and consumer protections.' Lukacs also highlighted challenges with the current Air Passenger Protection Regulations (APPR), which airlines have frequently contested, driving up costs. 'The APPR has been a failure by design. Airlines complicate the claims process and litigate legitimate passenger complaints, inflating administrative costs,' he explained. 'The solution is to simplify the regulations, following the European gold standard, where passengers can quickly determine compensation eligibility and airlines comply with the law. We want profitable airlines that respect consumer rights, not those that profit by breaking the law.' 090324_flair Flair Airlines Captain Ken Symonds inspects the outside of one of the company's Boeing 737 MAX 8 aircraft, in Richmond, B.C., on Wednesday, April 17, 2024. (Source: The Canadian Press/Darryl Dyck) Opportunity in increased competition: Flair Eric Tanner, VP Commercial at Calgary-based Flair Airlines, welcomed the Competition Bureau's report but stressed that government action is essential. 'We know how difficult it is to compete in Canada's aviation market, dominated by entrenched legacy carriers, with high costs making travel more expensive than elsewhere,' Tanner said. He criticized the current 'user-pay' airport model and lack of oversight, noting, 'Airports here cost much more than in other parts of the world, and fees are unfairly structured to favour certain business models.' Tanner also highlighted that connecting passengers pay far less in fees than local travelers, calling this 'unacceptable,' and pointed out that Flair's customers often pay more in airport fees than those flying with Air Canada or WestJet. 'This report identifies the problems, but now we need government to turn these findings into policies that improve competition and make air travel more affordable for Canadians,' he said. Porter plane A Porter airplane lands in Toronto on Wednesday, March 18, 2020. Porter Airlines and Air Transat are announcing a joint venture as the two carriers look to expand their range of destinations and tap into each other's markets. THE CANADIAN PRESS/Nathan Denette 'Cautious support': Porter Porter Airlines highlighted its efforts to increase competition by expanding its fleet and route network across Canada since 2023. In an statement to CTV News, the airline says it 'sees value in several of the report's suggestions, such as opening international flights at Montreal Metropolitan Airport and exploring new aircraft technology at Billy Bishop Airport.' Porter supports raising foreign ownership limits to 49 per cent for a single shareholder but urges caution on broader foreign ownership and market access changes. The airline warns that allowing foreign carriers to operate domestic routes could disadvantage smaller airlines unless reciprocal access is guaranteed for Canadian airlines abroad—benefits that would mainly favor the largest, most established players. CTV News reached out to both WestJet and Air Canada for comment on the Competition Bureau's report and recommendations, but has not received a response.
CTV News
26 minutes ago
- CTV News
Ontario to provide ice storm recovery funding for businesses, municipalities
Ontario Premier Doug Ford arrives in Barrie, Ont. on Friday, April 4, 2025 to inspect the damage from the ice storm and thank front-line workers and volunteers. THE CANADIAN PRESS/Christopher Drost The Ontario government says it's introducing two financial assistance programs to help municipalities and businesses recover from a severe March ice storm. The storm in late March left nearly 400,000 homes and businesses with power outages and damaged property as freezing rain covered parts of Ontario in layers of ice. The province says it will launch two one-time financial assistance programs to help with ice storm recovery, including one to help municipalities pay for emergency response and cleanup costs such as clearing fallen trees. The other program will provide up to $5 million for small businesses, small farms and not-for-profit organizations to pay for storm-related cleanup and essential repairs not covered by private insurance. Related Articles The province did not specify how much money it has set aside for the programs, but said final amounts for business assistance will be based on the number of applicants and eligible costs, while municipal funding will be based on the eligible emergency response and recovery costs. The province says eligible businesses and municipalities will have until Oct. 31 to apply for the funding. This report by The Canadian Press was first published June 19, 2025.
