The feds will need a political approach that will satisfy boomer homeowners without preserving perpetual house-price inflation.
in Domestic Policy, Latest News, Housing, Peter Copeland
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This article originally appeared in The Hill Times.
By Peter Copeland, October 7, 2026
Prime Minister Mark Carney can be proud of having made progress on many files in his short time in office so far, but his path is marked by flashy announcements and piecemeal reforms. The question remains whether voters will remain patient if the underlying problems persist. Housing is a good test case.
The Canada Mortgage and Housing Corporation’s latest figures are sobering. Under business as usual, Canada is headed for about 231,000 housing starts a year through 2036. To restore even 2019 levels of affordability, CMHC says we need roughly twice as much annual construction.
The federal government and provinces have become much more active on housing, which is welcome, but much of the approach amounts to subsidizing around the status quo rather than changing it. In housing this is “Carneynomics” in action—a new agency, and little to change the regulatory environment, coupled with many attempts to paper over it, such as federally-incentivized provincial efforts like those in Ontario that pay municipalities to reduce development charges.
It is better than subsidizing buyers, since it attacks a cost imposed directly on new housing. Though it also illustrates the strange logic of our housing policy, in which governments make housing expensive to build through dense webs of permitting, zoning, and “green” building code and planning requirements, then spend public money trying to reduce the costs of particular projects.
The problem is that the prime minister—like all of us—would like to have his cake and eat it, too. Older Canadians are unique in having had the good fortune of seeing their housing assets appreciate. From 1991 to 2000, the median owner-estimated value of a Canadian home rose in real terms by 143 per cent. They understandably don’t want to see those assets drop, while younger Canadians can be forgiven for finding this prospective hardship rather luxurious.
Boomers are also a core Liberal constituency, ironically now the party most invested in conserving the liberal cultural status quo. The latest Abacus poll has the Liberals leading 59 to 26 per cent in support among Canadians of boomer age and older.
This is why the government’s efforts to date remain cautious. They’ve made marginal differences in the overall price of housing without making development more attractive. Lower immigration has reduced demand and taken some pressure off prices, but absent further reforms, weaker prices also make new projects less attractive to developers. If prices drop too much, voters will be displeased and developers disincentivized to undertake new projects.
That’s why we need reforms that don’t simply change prices with subsidization, but make development more attractive in the first place.
Rather than indefinitely buying down development charges, the feds should tie infrastructure funding to permitting, zoning, and building code reform. In fact, Ottawa could use the National Building Code harmonization process to press the provinces toward eliminating low-value, but high cost environmental energy requirements that add to the price tag. Ontario enacted a number of reforms last year to reduce the number of studies needed for municipal planning. Ottawa is a model for municipal regulatory reduction, as is Edmonton, Alta. Ottawa’s new zoning bylaw broadly allows more housing in established neighbourhoods, and Edmonton’s reforms permitted more than 2,500 homes in mature neighbourhoods in 2025.
There is no way of getting around the fact that more attractive development prospects through regulatory reform leading to higher supply will lower prices, as it must.
The feds will, therefore, need a political approach that will satisfy boomer homeowners without preserving perpetual house-price inflation. Many older Canadians hold substantial savings and pensions. Tax reforms that are planned as part of the fall session could shift wealth accumulation away from housing. The OECD has found that owner-occupied housing receives preferential treatment in Canada, making housing an unusually attractive store of wealth. Reforms that improve the after-tax attractiveness of financial savings make it less politically necessary to preserve relentless home-price appreciation. Things like higher Tax-Free Savings Account contribution room so investments other than housing are more attractive, and reforming Registered Retirement Income Fund minimum withdrawals so retirees can leave capital invested longer are two examples worth considering.
The other way out is for incomes to catch up with house prices. As Ross McKitrick showed in our 2025 housing report, the real price of a Canadian home had nearly doubled relative to real personal disposable income from its earlier norm. There has been some improvement since. On the same series, the ratio of real house prices to real disposable income has fallen by roughly seven per cent since the third quarter of 2024. But that is mostly because real house prices have fallen; real disposable income has barely moved.
The better path on housing, therefore, is one in which supply increases markedly through the elimination and streamlining of excessive regulation, older homeowners have better opportunities for building wealth, and a more productive economy drives Canadian incomes upward.
Peter Copeland is (acting) director of domestic policy at the Macdonald-Laurier Institute.
