TLDR
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Over the last 12 months, the federal government has announced a series of new policies and programs designed to grow Canada’s housing supply, from Build Canada Homes to an expanded HST rebate with the Ontario Government.
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RBC’s Housing Policy Lead, Stephanie Shewchuk, shares her analysis on how these programs could unlock supply and make housing more affordable.
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Ontario’s tax rebate could have a significant impact on the homebuyer market, making home ownership more accessible to more people.
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While the announcements promise policies and funding aimed at addressing Canada’s housing supply, Shewchuk notes that some of these bigger shifts could take years to hit their stride.
Since the Liberal Government was re-elected with a mandate to improve housing affordability over a year ago, Prime Minister Mark Carney and his cabinet have launched a series of programs seeking to attack the problem from many angles.
Together, the programs paint a picture of a federal government looking to increase housing supply locally using the levers it can pull at the national level. Those levers primarily pertain to directly supporting affordable and low-income housing, reducing barriers for new home construction, and incentivizing municipalities to lower development fees.
“We’re seeing an attempt to address different types of housing across the continuum, from homelessness to home ownership,” explains Stephanie Shewchuk, Housing Policy Lead, RBC Thought Leadership. “We have yet to see the full strategic vision of what that looks like, and I think that will come through over the course of the rest of the year as there are discussions and deliberations about the next iteration of the National Housing Strategy.”
Based on the policies that have been announced thus far, Shewchuk says there’s a clear emphasis on speed, affordability and modernizing construction practices. Though the federal government’s intentions have been made clear to build more homes, faster, some of the programs and policies will still take time to develop and operationalize.
“When people are making decisions about probably maybe the biggest purchase they will ever make, they want the details to be clear,” Shewchuk says. “Otherwise, they start to develop more of a wait-and-see approach, and you lose some of the momentum. “
What is clear is the federal government’s appetite to make big changes to the country’s approach to housing policy. Here’s what they’ve unveiled to date.
Build Canada Homes crowns a new housing corporation
One of the Carney government’s marquee housing initiatives was the establishment of Build Canada Homes (BCH) in September of 2025. The new crown-corporation is tasked with increasing access to more deeply affordable housing options for Canadians who need the support.
“It’s interesting because of course, in our country, the private sector builds housing,” says Shewchuk. “Even though Build Canada Homes is set up to focus on non-market housing, there’s still a key role for the private sector as far as building and financing, two areas where you’re going to need private partners.”
So far, the BCH has announced the Direct Build initiative, which will fast-track the development of 4,000 homes at six Canada Lands Company sites. The organization has also announced a $1.5 Rental Protection Fund to preserve at-risk affordable rental housing and committed $1 billion to the construction of supportive and transitional housing for those experiencing or are at risk of homelessness.
Read more: What to watch as Build Canada Homes takes shape
Shewchuk notes that it will be interesting to see how BCH evolves alongside Canada Mortgage and Housing Corporation (CMHC), which has been operating as the country’s federal housing agency since 1946.
Though the organization was created to address the needs of those left out of the housing market Shewchuk says their efforts could nonetheless impact everyday renters and buyers. “It should take some pressure and competition out of a certain area of the market,” she says.
Could Ontario’s HST rebate be a game changing tax break?
When it comes to anticipating shifts in the buyer market, a significant signal could be the HST New Housing Rebate, which went into effect on April 1st 2026. The rebate, which was developed in partnership with the Province of Ontario, refunds the HST paid by purchasers of a new home in the province.
“I’ve heard terms like ‘game changer’ directly from some developers,” Shewchuk says. “People are starting to buy houses in Ontario directly as a result of this rebate.”
At the same time Shewchuk notes that the policy requires legislative changes, which are currently making their way through the process. For now, Ontario homebuyers are on the hook for the sales tax but have been assured that when it becomes law, they will be refunded that amount through the Canada Revenue Agency.
“Effectively, you have to apply for a rebate at this stage, but once the legislation is passed, developers can put it on the sales agreement,” Shewchuk says. “There’s probably not a lot of risk around this—the legislation stands to go through—but it will take a bit of time. That still means, however, that this uncertainty is a factor in decision-making.”
Though the rebate is currently only available in Ontario, Shewchuk believes that this framework could possibly be used as a template for agreements with additional provinces in the future.
Bill C-26: A big investment that’s light on details
In March, the federal government introduced Bill C-26, which earmarked a whopping $1.7 billion to improve housing supply through direct payments to provinces and territories.
While the Bill was big on dollars, however, it was light on specifics. “At present, there does not seem to be that much specific detail or current direction on this, but it was indicated that funds may be used for reducing development charges and fees and to make investments in programming already in place,” Shewchuk says.
When passed, it could provide the federal government the flexibility to distribute funds in whatever manner it believes would be most effective in each individual province and territory.
“It’s great that there is this allocation so that there can be flexible approaches to the different needs and ways of working across different provinces and territories,” Shewchuk says. “Housing markets and conditions across the country are quite varied.”
A new Canada-Ontario partnership founded on building
On March 30th, the federal government announced that it had struck a unique partnership with the province of Ontario to collaborate on and co-fund new housing and infrastructure.
The Canada-Ontario Partnership to Build includes a combined investment of $8.8 billion over 10 years, split between the two governments, “to support housing-enabling infrastructure projects in Ontario.” It is the first partnership established through the Building Communities Strong Fund.
The funds will be primarily used to incentivize municipalities to lower development charges, as well as to fund infrastructure projects prioritized by the province. All projects will also prioritize domestic suppliers, content and materials under Canada’s new Buy Canadian Policy.
“It should, in theory, reduce the cost of a unit, but we’ll have to see,” Shewchuk says. “Being so recently announced I think we’ll need to see how this plays out in practice, and there are always market factors at play.”
Shewchuk notes that similar partnerships with other provinces may prioritize different outcomes, given that development fees aren’t as significant a contributor to housing costs in other markets.
The Build Communities Strong Fund takes on municipal infrastructure
Announced in Budget 2025, the Build Communities Strong Fund is another initiative designed to help build municipal infrastructure without leaning as heavily on development charges.
The fund earmarks $51 billion for major public infrastructure projects in its first 10 years, starting in 2026, and $3 billion more per year ongoing.
Shewchuk explains that municipalities typically charge development fees to pay for the infrastructure required for new housing, from sewage to hospitals to bridges, and those costs ultimately get passed on to these buyers.
“The original intent behind development charges was that growth should pay for growth, and there are many who would argue that how they are used in practice has become quite broad,” she says.
As the cost of home construction has risen due to inflation, trade pressures and labour shortages, Shewchuk says the costs of building housing will need to come down so that more people can afford the end product. Reducing fees and levies, including development charges, can be a piece of the puzzle, especially in areas where they are relatively high, like the Greater Toronto Area and Greater Vancouver Area.
“There’s this tension between needing to build new infrastructure and paying for it, especially when things are quite expensive in terms of large infrastructure projects,” she says. “That’s where I think the federal government came in, understanding they collect the most revenue and have the most capacity to fund large projects.”
While the impacts of the fund may be years away, it could enable greater housing supply at more affordable levels in the years ahead.
The Spring Economic Update aims to find the “missing middle”
As the federal government looks to lower the cost of development, increase affordable housing supply and lower taxes for home buyers, its latest policy document seeks to take aim at a missing piece of the Canadian housing mix.
The Spring Economic Update 2026, which was published on April 28th, takes aim at so-called “missing middle” housing by permitting private mortgage insurers to offer multi-unit mortgage loan insurance on five to eight unit properties, while increasing flexibility for insurers to offer more products for three- and four-unit developments. “There’s a specific priority here to use existing land more efficiently and make more types of housing options available,” Shewchuk explains.
The Spring Economic Statement also allocated nearly $42 million over five years to modernize building codes and speed up the review and approvals processes, which Shewchuk notes is a key factor in encouraging the use of innovative construction methods and improving productivity in housing construction.
“The federal government is saying they are going to work to harmonize the building codes and also try to smooth the regulatory process so that there’s a pathway for factory-built housing,” she says. “In a lot of the research that I’ve looked at, that building code piece is a really sticky barrier for scaling up modern methods of construction.”
Read more: How modern methods of construction can help solve Canada’s housing crisis
Over the last year, the federal government has announced a suite of new housing policies, each seeking to address constraints at different ends of the housing continuum, from deeply affordable to new home purchases. And while new housing takes time to get built, and there is always opportunity to go further, the announcements to-date demonstrate a sense of the scale of the challenge in Canada, and a commitment to addressing challenges across the housing system.
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