Building 3.5M New Homes by 2030 Not Realistic, Says CHMC

People walk past homes for sale in Oakville, Ont., in this file photo. The Canadian Press/Nathan Denette

The Canada Mortgage and Housing Corporation’s chief economist says he isn’t confident Canada will be able to meet the CMHC’s ambitious target of building 3.5 million homes in order to restore affordability by 2030.

“The 3.5 million is an enormous undertaking,” Bob Dugan, CMHC’s chief economist, told the Commons finance committee on Sept. 28. “I think it is a very ambitious goal. It is going to be difficult to attain. I don’t see how we will attain it with the current environment.”

Mr. Dugan referenced high interest rates, the elevated cost of construction materials, and the unemployment rate inching up as reasons for his outlook, according to Blacklock’s Reporter.

The 3.5 million target is the estimated goal to restore affordability in Canada’s housing market.

“We need to come up with very innovative ways to build using existing capital and labour in order to get this job done,” Mr. Dugan said. “Because this is innovation that hasn’t happened yet, it is hard to point to a solution. But it is going to be difficult. Hopefully we can do it.”

According to CMHC data, housing starts were practically flat at 244,507 in August, up from 242,552 in July. Although Montreal recorded a 41 percent increase in housing starts, Toronto and Vancouver saw declines of 20 percent and 12 percent, respectively.

A Sept. 13 report from CMHC determined there would still be a supply gap in seven years of 3,450,000 homes. It said the gap would be most pronounced in Ontario, where there would be a 1,480,000 shortfall.

According to the 2023 CMHC Mortgage Consumer Survey, nearly a quarter of Canadians are struggling to pay their mortgages and a diminishing number believe their home equity will grow.

During a Sept. 27 meeting of the housing committee, Housing Minister Sean Fraser was urged by Conservative MP Andrew Scheer to review the CMHC’s mandate amid plummeting homeownership and rental housing affordability.

“Can you tell Canadians why officials at CMHC received almost $27 million in bonuses? They have one job: making housing affordable for all,” Mr. Scheer said.

NDP MP Bonita Zarrilo suggested CMHC’s decades-long preoccupation with “market-based” housing has come at the expense of affordable and social housing, and also urged Mr. Fraser to review the Crown corporation’s mandate.