How Ottawa plans to jump-start housing construction next year

The average cost of Canadian housing went wild during the COVID-19 pandemic — and now there's a broad consensus that Canada badly needs to build more homes.

Adding new supply could slow the housing market's dramatic price gains, giving hope to would-be home buyers and ensuring more Canadians have access to adequate housing that's within their budget.

"We can have people live closer to where they work. We can reduce commutes. We can reduce Canada's greenhouse gas footprint," said Mike Moffatt, a senior director at the Smart Prosperity Institute who tracks demographics and housing trends.

Moffatt's work has uncovered dramatic shifts in population movements during the pandemic — including an exodus of young families from overpriced cities to suburbs and smaller communities.

"This is going to take time ... going all the way from approval stage to being built, it can take years. So this is not going to be solved overnight, but there's no time like the present to start," he said.

The major federal parties and economists at Canada's major banks tend to agree that new housing is needed to create a more stable real estate market.

What's less clear is how the federal government should go about funding new construction, and how much is actually needed.

A pillar of the re-elected Liberal government's plan to build new housing is the new $4 billion Housing Accelerator Fund, which has a goal of building 100,000 new "middle-class" homes by 2025.

The program, launched under the government's larger National Housing Strategy, will give money directly to municipalities that demonstrate an ability to speed up new residential construction.

The money is conditional but Ottawa says cities and towns can apply for funding by doing things like reducing approval times for construction, updating dated zoning bylaws and building housing near public transit.

Ottawa also has earmarked $2.7 billion to repair and build new affordable housing units.

Ahmed Hussen, the minister responsible for housing, said the various home construction and repair programs introduced by his government are showing results already.

"Taken all together, we're talking about hundreds of thousands of new, affordable homes for people," he told CBC News.

The Conservatives have been particularly focused on the need for more housing supply. The party's platform included a pledge to build a million new homes over three years. The Liberal government's smaller target for new housing exposed it to question period attacks when Parliament reconvened.