500,000 Homes? No Chance — Why Canada’s Housing Plans Are Falling Apart

In this week we cover some of the most consequential turning points in Canada’s housing narrative to date including the breakdown of the Federal Conservative and Liberal housing plans. New home construction is collapsing at a national level—plummeting in cities like Vancouver by as much as 36% year-over-year—just as Canadians are being asked to decide who should lead the country through the next era of growth, or decline. 

We begin with the Bank of Canada’s latest rate decision: after seven cuts in the last 12 months, the BoC held steady at 2.75%, citing uncertainty caused by the ongoing U.S. tariff war. 

Governor Tiff Macklem emphasized that monetary policy can’t fix trade disputes but must focus on maintaining price stability. Although unemployment is rising and growth is slowing, the threat of inflation led the Bank to pause further cuts. At the same time, bond yields are surging, which could soon push mortgage rates higher, adding yet another affordability challenge for buyers.

Inflation data offered a brief reprieve, coming in at 2.3% for March—cooler than expected—thanks largely to lower gas prices. Shelter costs remain high but are decelerating, and rents continue to trend downward. 

National home sales, however, paint a more sobering picture. Volumes fell 5% month-over-month and 9% year-over-year, making this past March the slowest on record since 2009. Despite that, prices have only dipped modestly—just 2.1% year-over-year by HPI, and 3.7% by average price—suggesting the market remains surprisingly resilient even as sentiment erodes.

But it’s the housing start data that really underlines the problem: Canada posted the lowest monthly housing starts in six years, and it’s getting worse. Toronto’s pre-sale condo market has all but collapsed. Sales are 88% below the 10-year average, and unsold inventory now sits at a staggering 78 months of supply! That's 6 years! 

Developers are pulling out, projects are being cancelled or converted to rentals, and there’s zero profit margin left in many builds. As construction slows, a severe future housing shortage feels inevitable as the roller coaster continues.

Finally, we break down the election housing platforms of both the Liberal and Conservative parties. The Liberals plan to double annual home construction to 500,000, reintroduce tax incentives for rental construction, and create a new government housing agency—yet offer little in the way of realistic execution given Canada hasn’t built more than 270,000 homes in a single year in over four decades. 

Meanwhile, the Conservatives propose slashing GST on new homes up to $1.3M, punishing cities that fail to meet housing targets, and offering financial rewards to those that exceed them. They aim to unleash supply by freeing up federal land and cutting red tape, though critics argue their platform lacks implementation details.

If housing affordability matters to you—and it should—then this episode is essential listening. We examine not only the data but the direction each political party is trying to take Canada. With construction grinding to a halt, affordability still out of reach for most, and developers hitting pause across the country, the decisions we make now will define the housing market for the next generation. 

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