Federal government to create new 'Build Canada Homes' developer for building and financing affordable housing
Prime Minister Mark Carney and his Liberal-led federal government are following through on their election campaign promise of creating a new national agency dedicated to affordable housing.
The federal government has unveiled its preliminary vision for Build Canada Homes, a forthcoming federal entity that will have a mandate to deliver affordable housing at scale, modernize construction methods, and act as a “single-window” partner for large housing projects.
According to a newly released document to perform consultation with the general public, industry, and other stakeholders, this new agency would be responsible for building and financing affordable homes, working closely with private developers, non-profit organizations, Indigenous partners, and other governments. It would also focus on breaking down barriers in the development process, reducing risk for housing providers, and speeding up the use of federal lands for housing.
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The plan outlines two priorities: dramatically increasing the supply of affordable housing for working families, students, and seniors on fixed incomes; and adopting advanced building methods — such as modular construction, prefabrication, and low-carbon materials — to reduce costs, timelines, and environmental impact.
The document emphasizes partnering with “mission-driven” housing providers, including co-operatives and community housing organizations, and prioritizing large-scale projects or portfolios. Deals could include both supportive housing with wraparound services and attainable homeownership initiatives.
Build Canada Homes would be equipped with a suite of financial and non-financial tools, including low-interest loans, equity investments, land acquisition, loan guarantees, and targeted contributions. The agency could also act as a developer, bringing together land, financing, contractors, and operators, while leveraging its buying power to boost demand for Canadian-made, modern construction technologies.
Investment decisions would be guided by principles such as linking funding levels to housing outcomes, sharing both risk and rewards with private partners, and crowding in capital from a range of investors.
“Build Canada Homes could act as a developer in varying capacities, working with contractors, operators, investors and other developers to build housing, develop land, procure materials, share risks and provide expertise,” reads the document.
“Build Canada Homes could take and share targeted risks which unlock productivity and grow sector potential. Similarly, Build Canada Homes could expect private sector partners to share in financial risks. Build Canada Homes may seek to share in the financial returns of profitable projects it supports, to ensure private investors do not disproportionately benefit from public investment.”
Proposed selection criteria include the scale of projects, affordability for low- and moderate-income households, innovation in building methods, and efficient use of public funds. The government is also seeking to ensure investments prioritize Canadian-made materials and climate-resilient, net-zero construction techniques.
The aim is to align Build Canada Homes with existing housing programs, accelerate permitting and servicing, and create a regulatory environment that supports large-scale adoption of modern building methods.
Much of this may seem like this is what is already being performed by the federal Crown corporation Canada Mortgage and Housing Corporation (CMHC), and there is a specific reason for that.
During the election campaign, it was stated that the new federal entity would be created by spinning affordable housing programs and initiatives out of CMHC. To date, the vast majority of the federal government’s affordable housing initiatives have been delivered through CMHC, which has effectively served as the de facto entity for such programs.