CREA Responds to Federal Budget 2025

This week, the Minister of Finance, The Honourable François-Philippe Champagne, delivered the first federal budget of the Mark Carney government. Billed in the lead-up as a budget that would lay out “generational investments” to shore up a Canadian economy destabilized by a rapidly evolving relationship with its traditional trading partner, Canada Strong Budget 2025, put specifics to the government’s plans, priorities, and Canada’s fiscal health.

The government’s challenge has been to thread the needle between investment in key priorities, while reining in spending in order to stem the growth of government spending. As expected, investments in infrastructure, security and defence, a skilled workforce and national projects to support Canadian economic independence were announced. As a counterbalance, cuts to public expenditures were outlined along with the end of programs deemed too expensive, too polarizing, or ineffective.
 

Specific to housing, and the housing sector, Budget 2025 outlined the following:

• A recommitment to the previously announced First-Time Home Buyers’ GST Rebate for homes up to $1 million, and a reduction in GST for homes between $1 million and $1.5 million.
• Elimination of two programs – the Underused Housing Tax (to streamline tax compliance) and the unimplemented Canada Mortgage and Housing Corporation (CMHC) Canada Secondary Suites Loan Program.
• Changes to the National Housing Act to raise CMHC’s guarantee limits to $1 trillion, and to decouple it from the insurance limits to support homeownership and multi-unit rental construction.
• A $51 billion Build Communities Strong Fund, split into three streams of funding including a $17 billion provincial and territorial stream over 10 years to support housing- enabling infrastructure (e.g., roads, water/wastewater), a health-related infrastructure stream (e.g., hospitals), and infrastructure at colleges and universities. Combined with other programs, this can be used to encourage lower development charges levied on new housing development.
• Some details around the previously announced Build Canada Homes (BCH) were confirmed, including investments to support a new innovative homebuilding industry.

CREA supports the government’s focus on building new housing for Canadians through BCH, including $1 billion for transitional and supportive housing for those experiencing homelessness, and a $2.8 billion recommitment to the Urban, Rural, Northern and Indigenous Housing Strategy.

However, the budget offered limited concrete measures to support Canadians currently aspiring to achieve affordable homeownership, and support for more onboarding of missing middle housing is absent – risking slamming the door on homeownership for many. 

Canada’s housing system is no longer meeting the needs of its people. Both young Canadians and aging seniors, the country’s largest demographic cohorts, are facing increasing barriers to finding suitable homes. 

Despite growing financial pressures, homeownership remains a defining life goal, though the path to achieving it looks very different than it did a generation ago.

New insights from Abacus Data, in partnership with CREA , found that among younger Canadians, aspirations to homeownership remain very high, with 86% of non-homeowners aged 18 to 29 saying they would still like to buy a home someday. Unfortunately, from 2011 to 2021, the homeownership rate for 30 to 34-year-olds plunged from 59.2% to 52.3%, according to Census data. While young aspiring homeowners have reasonable expectations, traditional “missing middle” housing – such as semi-detached and townhomes – make up only slightly more than 11% of Canada’s housing stock, leaving young families and seniors stuck between housing options that are either too expensive or too small.

CREA will continue to advocate for forward-thinking policies that unlock and incentivize large-scale development of missing middle housing—from townhomes to low-rise apartments—across Canada, ensuring the door to homeownership remains open to more Canadians. We will continue to monitor and analyze federal commitments to ensure these policies support a fair, sustainable, and thriving housing system.

The Budget Bill will now be debated and voted upon in the days and weeks ahead. It remains unclear whether Carney’s minority government will be able to gain enough opposition support to pass the Budget Implementation Act.