At long last, Canada has begun to take housing reform seriously. Governments have introduced tax rebates and programs designed to lower development charges (DCs) and stimulate construction.

The debate now circles around whether the reforms are working.

The answer, according to experts who weighed in on the matter at a recent housing summit hosted by the Residential Construction Council of Ontario (RESCON), is both yes and no.

“Good stuff has happened,” Ian Lee, associate professor at Carleton University’s Sprott School of Business, told the summit. “We’re going in the right direction, but we’ve got to do more.”

On the positive side, governments have moved further on housing reform than they had for decades.

Federal and provincial leaders have acknowledged that excessive taxes, fees and regulatory delays have contributed to rising housing costs. Programs such as GST and HST rebates for new homes are improving affordability and helping stimulate activity in the new-home market.

Development charge relief initiatives, meanwhile, are encouraging municipalities to rethink how growth-related infrastructure is funded.

These are meaningful changes.

But as Lee and a number of other speakers at the summit emphasized, they are not sufficient.

 

A supply gap years in the making

 

The fact of the matter is that Canada continues to build far fewer homes than it needs. The country is producing roughly 250,000 housing starts annually, while estimates suggest between 400,000 and 470,000 new homes are required each year to restore affordability and close the deficit.

Even after the federal government reduced immigration targets and slowed population growth, housing construction still trails demand.

The result is a massive supply gap that was years in the making and will take years to correct.

As of August, total year-to-date Canadian housing starts were 149,542 units, down 4 per cent compared with the same period in 2025, according to Canada Mortgage and Housing Corp. (CMHC).

 

Buyers waiting on the sidelines

 

There is a fascinating paradox.

Jason Mercer, chief market analyst at the Toronto Regional Real Estate Board, noted that the Greater Toronto Area resale market now displays many of the conditions normally associated with a recovery. Affordability has improved significantly. Mortgage rates have moderated from their peaks. Home prices have softened and inventory levels are beginning to tighten.

Under normal circumstances, these developments would trigger a strong rebound in sales. However, many buyers remain on the sidelines.

The big issue, it seems, is no longer affordability. Concerns about trade disputes, inflation, global instability and the direction of interest rates are weighing on prospective buyers.

Even though the income required to buy a typical GTA home has fallen substantially over the past two years, consumers remain cautious.

The result is a growing pool of pent-up demand waiting for greater certainty.

Mercer offered a measure of optimism. With the ingredients for a recovery largely in place, he said housing activity could rebound relatively quickly if economic conditions stabilize and confidence returns.

 

A tale of two markets

 

Daniel Foch of Valery Real Estate brought another perspective to the table, suggesting that Canada’s housing market is increasingly becoming a tale of two realities.

In Ontario and British Columbia, for example, home prices relative to household incomes continue to rank among the highest in the country, placing ownership beyond the reach of many younger households.

Meanwhile, in Alberta and Atlantic Canada, many communities remain comparatively affordable and continue attracting residents seeking opportunities unavailable in Toronto or Vancouver.

Encouragingly, Foch told the summit that the preconstruction market is beginning to show signs of renewed life, particularly after the introduction of federal GST and HST relief measures. New-home sales have improved from the depressed levels seen in 2024, and evidence suggests tax reductions are helping stimulate demand rather than simply boosting builder profits.

While affordability has improved in some segments, though, Foch warned that future housing supply is weakening, construction activity is slowing, and project launches are declining.

 

From announcements to outcomes

 

Taken together, the summit presentations point to a clear conclusion.

Housing reform is working because governments have finally begun addressing long-standing structural problems. Tax relief, DC reductions and efforts to accelerate approvals are moving policy in the right direction. But it’s also not working because the pace of change remains too slow relative to the scale of the crisis.

Canada has not yet bridged the gap between announcements and outcomes. Making an announcement is easy. Putting it into practice is difficult.

Governments must turn partial reforms into complete ones, make temporary measures permanent, and ensure the programs already in place deliver as promised.

The country knows what needs to be done. We have already made progress. We are headed in the right direction. We must now finish the job.