On Tuesday, November 4, Finance Minister François-Philippe Champagne presented Budget 2025, the first budget under Prime Minister Mark Carney’s government. Framed as an austerity budget with “generational investments”, it showed a $78 billion deficit for 2025-26, with $141 billion more over the next five years, offset by $51.2 billion in cuts and savings. The main budget vote will take place on November 17.
Disappointing to the residential construction industry was the lack of support and investment for market-rate housing, especially when urban centers such as Metro Vancouver continue to sound the alarm on the housing delivery crisis, and report more job losses in direct response to the weakened market.
Although the Build Canada Homes (BHC) program continues to gain federal funding and attention, it targets the non-market side of the industry. At the CHBA National Fall meetings, BCH representatives spoke to a room of Executive Officers, including myself, and members from across the country, and it was made clear that it is a supportive-housing initiative and not one to support homeownership. The language surrounding the BCH program creates confusion, whether intentional or not, misleading Canadians to believe it will restore market affordability. In reality, affordable housing (non-market/ government-assisted housing which BCH supports) is not housing affordability (the ability for the average Canadian to purchase or rent homes typically without spending more than 30% of their income). This budget still lacks the homeownership support Canadians need.
A potentially positive measure is the new Build Communities Strong Fund which will direct much-needed infrastructure funding to local governments, though it requires provincial cost-matching. There are still significant details to be released including targets, timelines and how to ensure municipalities will follow-through on reducing development cost charges.
For a full breakdown on how Budget affects our industry, CHBA National summarized the details in the information below, and their Federal Budget 2025: Industry and Business Highlights webinar from last week is now available as a recording. To voice disappointment on the lack of policies to restore affordability and advance homeownership, CHBA issued a media release last week. Representing our membership at the federal level, CHBA will continue to advocate for this industry.
SPECIAL NOTE: Kevin Lee will be attending and speaking at HAVAN’s CONNECT Municipal event this Thursday.
CHBA Summary on Budget 2025:
The federal government has tabled the 2025 budget, and CHBA issued a press release in response. This is the first budget in a year and a half and the first one since Mark Carney became Prime Minister. Unlike the 2024 budget, which was commonly referred to as ‘The Housing Budget’ and which had some 53 pages dedicated to housing affordability measures, today’s document fell short of policies that will help restore affordability and advance homeownership. Instead, it focused on government-supported housing through the government’s Build Canada Homes initiative.
CHBA CEO Kevin Lee was invited to attend the stakeholder lock-up where he got an advance, embargoed copy of the budget and the budget speech delivered by the Finance Minister. Additionally, Lee was able to dialogue with political and public service officials to give immediate feedback on the documents. This followed on Lee’s appearance before the Senate Finance Committee on Tuesday morning, where he emphasized CHBA’s concerns over housing affordability, the need to take action, and the limited expectations for the budget – which unfortunately came to fruition.
Last year’s budget contained many advancements for market-rate housing, which fortunately are still in place, but the new government is underestimating the downturn in the industry for housing for ownership, and the devastating impact the slowdown is having in provinces like Ontario and B.C.
Lacking policies and programs for market-rate housing and homeownership
What little emphasis there is on housing in the budget is very much focused on social housing. The government reemphasized its Build Canada Homes (BCH) announcement from September. However, BCH focuses on government-supported housing for homelessness and low-income families. It does not address market-rate housing for rent, let alone for homeownership. BCH’s targeted 4,000 units in its initial tranche is less than one percent of the 500,000 units of all housing types that the government is setting as a yearly goal.
There are multiple areas that the government needs to address in order to support homeownership and today’s budget fell short of that.
GST not expanded to include all buyers
Despite vigorous advocacy by the Association on expanding the GST rebate beyond first-time buyers to include all buyers of new homes, and to renovations that created additional units, the government did not do so. In fact, the initial rebate still has not received Royal Assent. The impact of the rebate being announced in the spring, but slowing winding its way through the legislative process, has been a holdup of new home sales, and therefore construction, all summer long. CHBA has emphasized this repeatedly to government.
The government’s annual projected costs suggest that they expect, at minimum, 15 to 20 thousand buyers to access this rebate per year in its current form.
CHBA continues to put pressure on the government to pass Bill C-4 (the bill that contains the GST rebate) as soon as possible, and to expand it. It is expected that Bill C-4 will indeed be passed shortly, but with the budget out, this will certainly only be for first-time buyers at this time.
Development charges still need work
Budget 2025 announced the government’s intention to launch a new Build Communities Strong Fund. There will be a provincial and territorial stream that will provide $17.2 billion over 10 years, starting in 2026-27, to support infrastructure projects. Funding will support housing-enabling infrastructure (e.g., roads, water/wastewater), health-related infrastructure (e.g., hospitals), and infrastructure at colleges and universities. To access funds, provinces and territories must agree to cost-match federal funding and to substantially reduce development charges and not levy other taxes that hinder the housing supply.
However, this policy is missing several important details, including targets and timelines and how to ensure municipalities follow through on reducing development charges.
Work continues within the Association to get all levels of government to address out-of-control development charges.
Support for purpose-built rental
The budget did include an increase into the Canada Mortgage Bond issuance from $60 billion to $80 billion will be used to increase mortgage offerings exclusively for multi-unit housing. This is a positive measure to ensure more financing is available for rental construction, though it remains unfortunate that this is the only form of tenure viable for construction right now in many cases.
Few measures to support the industry’s workforce
Measures to support the home building and renovation workforce were lackluster in this year’s budget.
Reiterating the announcement made on October 27th, the federal budget proposes $97 million over the next five years for a Foreign Credential Recognition Action Fund to help workers trained in foreign countries to get their credentials recognized in Canada. This is limited to internationally-trained professionals with post-secondary degrees in regulated professions, which is more applicable to industrial, institutional, and commercial (ICI) construction, though it will provide a limited amount of support to residential.
Further, the budget also proposes an additional $75 million over three years to increase the Union Training and Innovation Program, which supports union-based apprenticeship training in skilled trades. Given that only 10% of the residential construction workforce outside of Quebec operates in a unionized environment – and that many of the labour needs in residential construction are in positions that do not require post-secondary education – these measures will do little to support the home building workforce in most regions.
CHBA remains steadfast that measures to support the residential construction workforce must look beyond union models and the Red Seal trades, and is actively pushing government to focus funding and efforts on the true labour needs of the industry.
Productivity Super-Deduction
To boost productivity and attract investment, the new government is introducing a “Productivity Super-Deduction”—a set of enhanced tax incentives covering all new capital investment that allows businesses to write off a larger share of the cost of these investments right away. These will make it easier for housing manufacturers to invest, and are in line with CHBA’s Sector Transition Strategy recommendations. Under this measure, companies can recover their investment cost faster through the tax system. This makes it more attractive to invest in machinery, equipment, technology, and other productivity-enhancing assets. However, per CHBA’s recommendations, much more needs to be done to support housing supply at large before factories can afford to invest more in capital assets.
Underused Housing Tax eliminated
Budget 2025 announced the government’s intention to eliminate the Underused Housing Tax as of the 2025 calendar year. CHBA fought against this tax vigorously when it was introduced and was successful at the time in getting builders and developers exempt from this tax. Still, it is good to see this ill-conceived tax completely eliminated.
Next steps
The budget fell short for builders, renovators, everyone in the industry, and for homeowners. The current government has lost the momentum gained in recent years, and CHBA will be working to bring them up to speed on how the housing industry works by vigorously advocating for policies that help address the current challenges. CHBA remains committed to pushing the government to adopt policies that support homeownership and will improve affordability across the board.
Media release from CHBA National, November 5, 2025
FEDERAL BUDGET FAILS TO SUPPORT HOMEOWNERSHIP FOR NEXT GENERATION
The Canadian Home Builders’ Association (CHBA) is raising deep concerns regarding the 2025 Federal Budget, and the excessive expectation being placed on initiatives for government-supported housing through Build Canada Homes – an initiative that will help homelessness and low-income households needing support, but not address homeownership for the middle class of the next generation.
Despite urgent calls for action, the budget presented no new measures to address housing affordability for the average Canadian who still wants to become a homeowner. It emphasized the promise of a GST exemption for first-time buyers—a measure announced months ago and still not legislated, which has left buyers on the sidelines and stalled new construction.
The budget was a missed opportunity to expand the GST relief to all buyers of new homes, and to renovations that create added housing units, such as additional dwelling units (ADUs) or secondary suites.
Extending the GST relief would help create the variety of housing types that Canada needs, including for seniors downsizing and freeing up family-oriented housing, and Canadians with growing families moving to their next home, in turn freeing up entry-level homes for first-time buyers. It would also cost much less than Build Canada Homes, which is focused on government-supportive housing that will build less than one percent of the homes needed to correct Canada’s housing supply deficit. The government needs to focus on the full housing continuum.
The budget unfortunately retreats from the Liberal platform’s commitment to work with municipalities to reduce development taxes by 50 percent. Over the past two decades, these taxes have soared by 700%, pricing countless Canadians out of the market. The budget does propose a new Build Communities Strong Fund, which will provide housing-enabling infrastructure funding to provinces that commit to substantially reduce development charges, but no details have been provided. CHBA is keen to see this come to fruition as quickly as possible.
The budget also missed the mark on supporting skilled workers that actually build and renovate Canada’s homes: it only announced training measures that support unions, when only about ten percent of residential construction workers outside of Québec are unionized.
Finally, from a first principles perspective, the budget paints a rosy picture that housing starts are doing just fine, but analysis of where those starts are coming from tells a troubling story. In 2021, 70% of housing starts were for ownership, but today, that has plummeted to 50%, with the other half destined for rental or government-supported (social) housing. The dream of homeownership is slipping, and the budget did not take further action to turn the tide. The result will be more jobs lost: CHBA’s Housing Market Index shows that nationally, 41% of builders surveyed have laid off workers, and in Ontario, that number climbs to 64%.
“The lack of focus on additional measures that will help Canadians who work hard and have good jobs move into the ranks of homeownership, which most still aspire to, is very troubling, especially in light of the fact that last year’s budget had good momentum with positive policy reform for market-rate housing,” said CHBA CEO Kevin Lee. “Canada can’t double housing starts if the country can’t tap into the investment power of individual Canadian families to buy their own home. The government needs to go back to including market-rate ownership as part of the housing affordability equation, and we will continue to make recommendations on how to do so.”
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HAVAN continues to work with CHBA BC and CHBA to advocate for all levels of government to work together to address the challenges of the housing industry including zoning restrictions, density limits, and NIMBYism.
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