Carney And the Liberal's Home Building Plan

$35 billion in capital announced to fund new pre-fab and modular homes

Prime Minister Mark Carney wants to get into the home-building business. He intends to build houses at a speed and scale we haven’t seen before. This will be accomplished through a new “lean” government organization that will act as a developer, catalyze a new housing industry, and provide financing for home builders. He said the organization, which he referred to as “Build Canada Homes,” will work with industry to build housing at scale and use publicly owned lands to do so.

He says that prefabricated and modular housing will play a big role, claiming they can be built 50% faster, up to 20% cheaper, and with 20% fewer emissions than traditional building methods. He claims the $35 billion will be used to build 500,000 new homes.

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Too good to be true?

Let’s keep in mind the federal government’s track record on building homes—it isn’t great. The Trudeau government implemented the National Housing Strategy (NHS) in 2017, a 10-year, $115 billion plan aimed at funding and supporting various stakeholders rather than direct government construction. However, despite these efforts, only 245,120 homes were built in 2024—a decline from the 271,198 built in 2021 during the pandemic. Many attribute this to delays in planning and permits, as well as high interest rates, all of which have contributed to investor hesitancy.

Experts estimate Canada needs between 3.5 and 5.8 million homes by 2030.

Carney is not Trudeau, and Canada getting directly involved in the building process marks a departure from the NHS. Interest rates have been declining, but it remains to be seen how Carney will avoid planning delays.

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Is social housing the answer?

Canada already has public housing, of course—housing owned by provincial or municipal governments. Low-income individuals can apply and, in some cases, receive government-subsidized housing. This would be a new area for the federal government to enter, though not entirely unprecedented. The Canadian Forces Housing Agency, for example, is a federal program that provides housing for military personnel and their families.

So, if the federal government is going to get into the business of building houses, why not also get into the business of renting them out? This could help keep rental costs low if private housing has to compete with (presumably) more fairly priced, government-owned public housing.

The problem, as many on the right will be quick to point out, is that Canada has a disturbing trend of sliding further and further into socialism—some might even say bordering on communism. At some point, we may wake up with the government telling us what kind of house is best for our families and expecting us to simply accept it.

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So, will it be different this time?

Unfortunately, we have no real way of knowing for sure. This approach is different from previous programs. The reality is that the last time the government was directly involved in building housing (in the 1990s), it did pretty well. The victory houses of the 50s post World War II were also very successful.

However, $35 billion per year exceeds the NHS's available budget. If this amount were directly applied to building houses, it would only cover approximately 70,000 homes at an estimated cost of $500,000 per house. We don't have all the details of the program yet, but it's expected that the funds will be used for financing, with most—if not all—of the money being recouped through the sale of the completed houses. There may also be a system in place to absorb some losses to keep prices affordable for consumers.