As Canada finds itself at a political crossroads with Justin Trudeau's resignation and Parliament prorogued until late March 2025, the housing crisis continues to be a defining issue for Canadians.
With Conservative leader Pierre Poilievre and Prime Minister Mark Carney running tight campaigns towards the pending election, their contrasting, yet imparative approaches to housing policy could significantly impact the future of Canadian real estate and Canadian home ownership. This analysis examines both leaders' housing strategies against the backdrop of current market conditions to determine which might better address Canada's persistent housing affordability challenges.
Current State of Canadian Housing: A Crisis of Affordability
The housing market in Canada has reached crisis proportions, with affordability metrics hitting alarming levels before showing modest improvement in recent quarters.
According to RBC's affordability index, the share of income a median household would need to cover housing costs reached an all-time high of 63.8% in Q4 2023, before improving slightly to 58.4% by Q3 2024. This improvement stemmed from a combination of depreciating property values, interest rate cuts, and household income growth, with income gains contributing most significantly to affordability relief.
Despite these improvements, the situation remains dire for many Canadians. Habitat for Humanity's Affordable Housing Survey revealed that 82% of Canadians worry the housing crisis is impacting their health and well-being, while 88% of renters believe homeownership is out of reach. More concerning still, 59% of Canadians report sacrificing basic needs such as food, clothing, and education to afford housing costs.
In major markets, the challenge is even more pronounced. Vancouver remains Canada's least affordable city, with housing costs consuming a staggering 96.7% of median household income.
As of February 2025, median home prices stood at $1,224,858 in Greater Vancouver and $1,073,900 in Greater Toronto.
The Greater Toronto Area housing market showed signs of transition in 2024, with annual sales increasing by 2.6% to 67,610 compared to 2023, while new listings surged by 16.4% to 166,121.
This supply increase provided buyers with greater choice and kept price growth in check, with the average selling price for all home types at $1,117,600 in 2024, a slight decline from $1,126,263 in 2023.
Poilievre's Housing Vision: Supply-Side Solutions and Tax Cuts
Pierre Poilievre's housing strategy centers on boosting supply, cutting taxes, and reducing bureaucratic obstacles. His comprehensive approach rests on three key pillars that target various aspects of the housing crisis.
Poilievre: Building More Homes and Accountability Measures
Poilievre proposes tying federal funding to specific housing targets, requiring municipalities to boost housing starts by 15% annually to receive full federal infrastructure funding. This approach aims to create accountability in municipal housing development. Just a quick note that this approach has been used before by the current liberal government and while there was some progress made, sky-high development charges and municipal red-tape when it comes to permits and zoning, are still slowing down developers from building homes as fast as we need to.
Poilievre: GST Exemption for New Homes
Initially proposing to eliminate GST on new homes below $1 million, Poilievre recently upped the threshold to $1.3 million, arguing that the million-dollar mark is insufficient for quality homes in expensive markets like Vancouver and Toronto. He claims this tax cut would stimulate the construction of an additional 36,000 homes annually.
Poilievre: Bureaucratic Reform and Funding Redirection
Poilievre has pledged to eliminate what he terms "bureaucratic" Liberal housing initiatives, including the $4 billion Housing Accelerator Fund, to finance his GST exemption proposal. His plan prioritizes streamlining processes and reducing red tape that delays housing development.
Carney's Housing Approach: Investment, Innovation, and Targeted Relief
Mark Carney, drawing on his background as former Governor of the Bank of Canada and Bank of England, presents a multi-faceted housing strategy focusing on investment, innovation, and accessibility. On March 31st, Carney unveiled his housing platform, which represents an unprecedented effort to tackle Canada’s housing crisis through public investment paired with private capital.
Carney: Build Canada Homes (BCH) Initiative
Carney proposes creating a new federal entity called Build Canada Homes (BCH) to directly build affordable housing at scale, particularly on public lands. BCH would consolidate existing programs like the Affordable Housing Fund and Federal Lands Initiative under one umbrella to streamline operations. Its functions include developing affordable housing projects as a federal developer and partnering with builders for construction phases. Providing $25 billion in debt financing and $1 billion in equity financing to innovative prefabricated home builders to reduce construction times by up to 50%, costs by up to 20%, and emissions by up to 22%.
Doubling Construction and Supporting Innovation
Carney pledges to double home construction through private investment and fund innovative solutions like modular housing to accelerate development. His plan also includes expanding training programs for skilled trades to address labor shortages in construction. All these issues have been identified as vital bottlenecks in accelerating construction and building the much-needed 3.5 million homes needed to address Canada's home shortage.
Cutting Municipal Red Tape and Development Charges
To accelerate construction timelines, Carney proposes cutting municipal development charges in half for multi-unit residential projects while compensating municipalities for lost revenue over five years. He also plans to reduce zoning restrictions, simplify building codes, and leverage pre-approved standardized housing designs across public lands.
Carney: Targeted GST Relief for First-Time Buyers
Similar to Poilievre, Carney proposes eliminating the GST, but specifically for first-time homebuyers on homes under $1 million]. This more targeted approach focuses relief on those entering or looking to enter the market, rather than all buyers.
Carney: Community Housing and CMHC Reforms
Carney's plan includes doubling non-profit community housing (including co-ops) and expanding access to funding and low-interest loans from CMHC so smaller builders can develop affordable housing. He also emphasizes addressing the specific housing needs of Indigenous peoples.
Carney: Immigration Cap and Tax Reform
Recognizing the relationship between population growth and housing demand, Carney proposes capping immigration "until it can be returned to a sustainable trend". He also advocates for fundamental tax system reform to incentivize building.
Interest Rate Outlook: How will interest rates do under Carney or Poilievre?
The effectiveness of either housing strategy will be significantly influenced by interest rate trends. After the Bank of Canada's rate cut on March 12, 2025, forecasts from the Big 6 Banks suggest rates could decrease by another 75 basis points during 2025, with potential policy rates ranging from 2.0% to 2.75% by year-end.
With approximately 60% of outstanding mortgages due for renewal in the next two years, many borrowers will face significant payment increases despite recent rate cuts, as they'll still be renewing at higher rates than their previous terms.
Carney Vs. Poilievre on Canadian Real Estate: Evaluating Both Approaches
Supply-Side Emphasis vs. Balanced Approach
Both leaders prioritize increasing housing supply, but through different mechanisms. Poilievre's approach relies heavily on municipal accountability and private sector incentives, while Carney balances private investment with expansion of non-profit and community housing options.
Tax Relief: Universal vs. Targeted
Poilievre's broader GST exemption (up to $1.3 million) would benefit all homebuyers in the new construction market, regardless of whether they're first-time buyers.
Carney's more targeted approach focuses specifically on first-time buyers (up to $1 million), potentially directing relief where it's most needed but at a lower threshold that may not reflect pricing reality in the hottest markets.
Market-Based vs. Mixed Solutions
Poilievre's approach leans more heavily on market mechanisms and private sector solutions, while Carney incorporates a mix of private investment, public funding, and non-profit housing expansion.
This reflects their different economic philosophies, with Poilievre focusing more on reducing government intervention and Carney advocating for strategic public investment alongside private capital.
Streamlining Processes
Carney’s platform includes cutting municipal development charges, simplifying building codes, and leveraging pre-approved designs—all measures aimed at reducing costs and speeding up approvals for affordable projects. Poilievre similarly emphasizes reducing red tape but lacks detailed proposals comparable to Carney’s comprehensive streamlining efforts under BCH.
Regional Impacts: One Size Doesn't Fit All
Given the significant price disparities across Canadian housing markets, the regional impacts of both plans would vary considerably.
In expensive markets like Vancouver and Toronto, where median home prices exceed $1 million, Poilievre's higher GST exemption threshold could provide greater relief to buyers. However, Carney's focus on innovative construction methods and expanded community housing options might deliver more affordable units in the long run.
In more moderately priced markets, both plans would likely stimulate supply, but through different mechanisms that could lead to varying types of housing development.
Industry Perspectives: Construction and Real Estate Sector Implications
The construction industry would benefit from either plan's emphasis on increased building, but labor shortages present a significant challenge. Carney's emphasis on expanding training for skilled trades directly addresses this bottleneck, while Poilievre focuses more on removing regulatory barriers to existing builders.
The different GST approaches would also impact the types of homes being built. Poilievre's higher threshold might encourage more luxury or mid-luxury development, while Carney's first-time buyer focus could stimulate more entry-level construction.
Carney Vs. Poilievre on Canadian Real Estate: Who is the better choice?
Based on the available data, both housing strategies present viable but different approaches to addressing Canada's housing crisis.
Poilievre's plan emphasizes market mechanisms, regulatory reduction, and broader tax relief, while Carney proposes a bold, more mixed approach combining private investment, targeted relief, and expansion of non-profit options, coupled with a very focused set of investments (BCH) and measures that have been unprecedented to turn around Canada's housing crisis.
The effectiveness of either approach will depend largely on implementation details, cooperation from other levels of government, and external factors like interest rates and global economic conditions. As the campaign plans get unveiled further, the leaders may present more information that helps us understand their stance on housing and how they plan to lead Canada out of our housing affordability crisis.
Both leaders acknowledge the severity of the housing crisis and propose substantial interventions, suggesting that regardless of who takes power, housing will remain a top policy priority.
For Canadian homebuyers and investors, the coming political transition represents both uncertainty and opportunity. While neither plan offers an overnight solution to the affordability crisis, both present pathways toward increased supply, the fundamental factor most economists agree is necessary for long-term improvement in housing affordability.
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