The cost of meeting housing goals may be too high without significant investment reforms
Meeting Ottawa’s aggressive housing construction goals will require more than $300 billion in additional financing each year until 2030, according to a new report from the Fraser Institute.
The study highlighted the scale of investment needed to address Canada’s housing affordability crisis and the challenge of securing the necessary capital.
"To increase home building and restore business investment in key areas like technology to previous levels, Canada needs to become much more attractive to investors, both from within Canada and around the world," said Steven Globerman, senior fellow at the Fraser Institute and author of the report.
The Canadian Mortgage and Housing Corporation (CMHC) has estimated that 3.5 million additional housing units must be built by 2030 to restore affordability. To meet this target, the report finds that between $331 billion and $364 billion in extra financing will be required annually from 2025 to 2030.
In addition to the housing sector, the report noted that for business investment in industries like communications and IT to return to previous levels, another $13 billion annually would be necessary. In total, the financing gap ranges from $343 billion to $377 billion per year, an amount equivalent to increasing Canada’s current savings rate by 50%.
The report raised concerns about whether Canada can realistically generate the required financing, suggesting that attracting foreign investment could be a key part of the solution. However, it warned that significant policy reforms are needed to make Canada a more attractive destination for investors.
“One option to mitigate the need for a drastic increase in the domestic savings rate is to attract more foreign investment, but that will require substantial policy reforms to make Canada a more attractive environment for foreign investors,” the report read.
The findings come amid increasing political scrutiny over housing construction shortfalls. During the first debate of the ongoing election campaign, Ontario premier Doug Ford faced criticism for missing his 2022 pledge to build 1.5 million homes in the province.
Ontario’s housing starts fell by 16% in 2024, according to CMHC data, leaving the province well behind its target of 125,000 new homes per year. Opposition leaders, including NDP leader Marit Stiles, Liberal leader Bonnie Crombie, and Green Party leader Mike Schreiner, accused Ford of prioritizing developers over residents and failing to deliver on housing targets.
Despite the shortfalls, Ford’s government has pointed to high interest rates as a major factor slowing down construction and insists the long-term goal remains achievable.
Read more: Ontario party leaders clash over housing crisis in first election debate
“It is very likely that the ambitious targets that have been set for homebuilding and business investment won’t be met, but even so, encouraging increased investment and higher domestic savings is a worthy policy pursuit,” Globerman said.
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