(Version française disponible ici)

Canada faces an urgent need for affordable housing and the federal government is uniquely positioned to address it. It owns much underused urban land, has greater fiscal capacity than other levels of government and faces strong public demand for action.

Despite this, federal progress on housing has lagged. The adoption of Canada’s National Housing Strategy (NHS) in 2017 set clear policy goals but lacked a coherent plan to achieve them. Its implementation was fragmented across agencies and levels of government, with competing interests. The introduction of the Build Canada Homes Act in February fixes this by consolidating responsibility into a single Crown corporation with one clear mandate and timeline, but issues remain.

Why the National Housing Strategy wasn’t enough

Since 2017, federal housing policy has been defined by the NHS. The strategy was the basis for key programs such as the Affordable Housing Fund, the Apartment Construction Loan Program, the Rapid Housing Initiative, the Housing Accelerator Fund, and the Federal Lands Initiative.

As of December 2025, $49.5 billion had been committed through NHS-linked initiatives to create 348,240 “affordable” units by either building new units or converting existing ones. An affordable unit is defined as one for which rent or mortgage payments are less than 30 per cent of the local median household gross income.

While this added volume of affordable units may seem significant, it pales in comparison to the 3.5 million new units the Canada Mortgage and Housing Corporation (CMHC) estimates will be required by 2030 to restore housing affordability.

So, how can output jump from nearly 350,000 over 10 years to 3.5 million in under five?

Fragmented process and bottlenecks

To date, a key barrier is decentralized delivery. For housing on federal lands, CMHC devises a plan, Public Services and Procurement Canada identifies surplus land, and the Canada Lands Company implements projects – creating a slow, fragmented process.

This is even more complex in areas with additional layers of federal governance, such as Ottawa-Gatineau, where the National Capital Commission is involved, or anywhere Parks Canada is a significant landowner, such as the Lachine Canal area in Montreal.

There is also a tendency to comply and collaborate with provinces or municipalities. While important for developing relationships between different orders of government, this adds significant technical and political complexity to projects that take time to tackle. In this context, projects move slowly, burdened by repeated due diligence and planning workflows within each organization, resulting in a trickle of new housing. BCH can potentially address this bottleneck through its unified structure.

Co-ordinated federal action on public lands

If adopted, the Build Canada Homes Act will substantially increase federal capacity to deliver affordable housing. The new Crown corporation is also tasked with normalizing prefabrication in residential construction. The act allows BCH to take over Canada Lands Company assets, develop or lease property nationwide, invest, and subsidize projects. It can act decisively without other agencies, and, as noted by economist Mike Moffat, is largely shielded from political interference as a Crown corporation.

On federal land the Government of Canada and, by proxy, its agent Crown corporations can approve and build what they want, where they want, and how they want. This includes building housing without municipal rezonings or building permits. This is true for military bases, port lands, and other federal enclaves. Municipalities may be, and almost always are, consulted for servicing and good-neighbour co-ordination, but they do not control approvals on federal property.

That matters because approvals take time, and time is money. As a public-sector developer, BCH can assemble, prepare, and service lands while approving builds – releasing sites as “shovel-ready” bundles to private-sector bidders. To promote and lock in affordability, it can set long-term federal ground leases with affordability covenants, standardize repeatable building types, and run projects on its own timelines.

Potential risks and roadblocks

One area of concern is the fact that legislative and public relations documents for the Build Canada Homes Act lack concrete goals. This leads to uncertainty about BCH where there should be none: how many homes will it build, where will they be built, which income deciles will they target, when can Canadians expect them to come online, how much will they cost to build per unit, and which modern methods of construction will they use?

BCH and Housing, Infrastructure and Communities Canada will need to address these concerns sooner rather than later to solidify public support. This lack of transparency also affects private-sector buy-in. BCH has an innovative business model, but clarity on expected costs, risks, revenues, and profits will be needed to incentivize partnerships.

Additionally, the federal government will need to consider long-term opportunity costs. BCH’s business model likely requires dedicating billions of dollars in current real assets to affordable housing projects. This will prevent the concerned federal lands from being used for other key functions, notably logistic and military uses. Land is the textbook example of a scarce, rivalrous and excludable resource, and urban land is even more so.

This can become an issue similar to one faced by cities that have undergone significant brownfield redevelopment: having turned the most suitable areas for manufacturing over to residential uses, they now lack the capacity to smoothly relaunch their industrial sector. As Canada grapples with a rupture in the rules-based order, sacrificing state capacity in this way must not be done lightly.

Federal-first solutions

The single biggest advantage BCH can leverage is federal jurisdiction. While working with municipal and provincial partners is ideal, avoiding scope creep and respecting project timelines will likely require going over their heads. Again, time is money, and for the millions of Canadian households struggling to make ends meet in the current housing crisis, the perfect is the enemy of the good.

Regarding transparency and accountability, BCH would benefit from publishing clear, quantifiable goals for affordable housing output and the cost by city. These goals could include cost and time per unit (by unit type) and units by type per city. These goals should be tracked through regularly updated performance indicators or dashboards, which would allow investors and the public to determine how well BCH delivers on its commitments, as well as provide a strong incentive for its employees to achieve those objectives.

For now, the final form BCH will take is yet to be determined. The Build Canada Homes Act has cleared second reading in the House of Commons, and as Jean Lamirande, senior vice-president for policy and operations at BCH, put it, they are very much “building the plane while flying it.” While it now has approximately 30 staff on payroll, BCH is currently top-heavy with an overwhelming majority being managers, executives, or direct reports to its CEO, Ana Bailão.

Nevertheless, the adoption of Bill C-15 has allowed the organization to appropriate $11.5 billion from the Consolidated Revenue Fund. While not inconsequential, in a capital-intensive sector like housing, this initial funding will not be sufficient to achieve BCH’s objectives.

The next year will be defined by tough choices on what it will do, and what it won’t.