by Tim Richter
The federal government’s proposal to create “a new federal entity responsible for building affordable homes, financing affordable home builders, and catalyzing a more productive homebuilding industry” —Build Canada Homes (BCH) —is an ambitious and potentially transformative concept that could reshape Canada’s housing landscape. It’s the centrepiece of Prime Minister Mark Carney’s pledge to “drive [housing] supply up to bring costs down” and—if it’s done right—it could be a major breakthrough in ending homelessness.
That’s why the Canadian Alliance to End Homelessness’ Fall Budget 2025 priorities includes a call for the federal government to ensure BCH delivers the deeply affordable and supportive housing needed to reduce homelessness.
Recently the federal government released the Build Canada Homes Market Sounding Guide, which sets out the initial vision for the program. We reviewed the guide with an eye to how BCH can build the types of housing Canadians need and support a stronger Canadian economy.
We were glad to see a much-needed focus on deep affordability and big thinking about how BCH could deliver affordable housing at scale, support breaking down silos and leveraging land, finance, and the expertise of manufacturing, construction and market and non-market providers to have the biggest possible impact.
Based on our analysis of the guide and our experience supporting homelessness reduction in communities across Canada, here’s what else BCH needs to succeed:
1. The Full Support of Team Canada
Our number one recommendation for the federal government in this upcoming budget is to commit to negotiating a new national housing agreement with provinces and territories. The fact is, the scale of change we need can’t be accomplished by BCH or any government on its own, and our current, fragmented efforts haven’t worked.
The BCH market sounding guide nods to the need for federal/provincial/territorial (FPT) collaboration and positions the federal government as a leader. This is positive, but without the foundation of a clear FPT agreement that establishes a shared vision, objective and outcomes, BCH efforts could be delayed by jurisdictional wrangling, or some provinces opting to step back when we need them to lean in.
We know it can be done, building on past national efforts in health care, child care, and disaster response. It’s going to take everyone at the table to end homelessness and solve the housing crisis for good.
2. A Realistic Definition of Affordability
To ensure the right homes get built for the people who need them at the right price, Canada needs a clear definition of affordability, based on the accepted standard of 30% of pre-tax income. The BCH guide has a much-needed focus on deep affordability. But when it comes to defining affordability, it groups everything from supportive housing to “moderate income” housing in one sweeping category. Market-linked definitions of “affordable rents,” sometimes set at 80% of average market rent, do not reflect the reality of what Canadians can afford. The lack of a realistic standard for affordability was a critical shortcoming of the National Housing Strategy that we have the opportunity to learn from with BCH.
3. Focus on the people in greatest need
BCH’s current approach risks trying to be everything, everywhere, all at once. BCH has a critical role to play in addressing Canada’s housing crisis, but it can’t be the only thing we’re doing to fix all the challenges across the housing system.
Instead, BCH needs to be laser-focused on supporting people that the market can’t or won’t serve and prioritize serving those in the greatest housing need. It’s not just the smart thing to do; it’s the government’s own policy under the National Housing Strategy Act to foster the progressive realization of the right to housing. That means Canada’s housing policy requires BCH to prioritize those in greatest need and set clear a clear plan to achieve that.
While BCH and the federal government can help catalyze private market construction, BCH should not replicate what the private market can often deliver more quickly with smart federal incentives like a modernized Multi-Unit Residential Building (MURB) program or with other tax/regulatory changes. BCH could support people on the way to ownership, through attainable programs like Habitat for Humanity, but the predominant focus must remain on affordable and supportive housing. The government should explore other policy instruments to restore the pathway to home ownership for younger Canadians in particular.
4. Supportive Housing to Reduce Homelessness
CAEH was pleased to see that BCH will work to grow the stock of affordable housing, including supportive housing with wraparound services to support people experiencing homelessness. We’re calling for the government to work towards an initial target of 50,000 new supportive housing units. Provincial/territorial collaboration will also be key to realize the full potential of federal capital investments in supportive housing, ensuring residents have access to necessary health, mental health and case management supports.
This is not just a moral imperative, but also a smart economic investment. Supportive housing is cheaper and more effective to house people with complex needs, costing around $4,000 per month. By comparison, a month-long stay at a shelter costs $7,000, prison $10,000 and hospital nearly $30,000.
5. Design That’s Built for Outcomes not Outputs
Counting the number of units built is only one piece of the puzzle. True success means measurable community-level reductions in homelessness, measurable reductions in the rate or incidence of core housing need, and rental and home prices moving closer to true affordability. Communities across the country need thousands of new units built, but focusing solely on the raw numbers of units-built risks spending billions of dollars on housing without meeting people’s needs or improving housing outcomes for Canadians.
6. Response to Unsheltered Homelessness through Bridge Housing
Bridge housing is short-term, continuous stay accommodation that helps ‘bridge’ the gap between homelessness and permanent housing. This type of housing is very similar to temporary housing used in disaster response, workforce housing used in Alberta’s oil patch or quarantine facilities used during the pandemic. It is often factory built or prefabricated and can be rapidly deployed.
Bridge housing plays a key role in supporting people to move from encampments into permanent housing. In partnership with the provinces and municipalities providing the wraparound supports needed to make bridge housing effective, BCH could quickly purchase and deploy temporary structures to become bridge housing – rapidly resolving unsheltered homelessness across the country.
7. Support for By-Indigenous, For-Indigenous Housing
BCH should enable and support by-Indigenous for-Indigenous urban, rural, and northern housing. CAEH amplifies calls to set a 20% target for Indigenous-led housing through BCH and urges the federal government to co-develop and co-design the programs and funding mechanisms for Indigenous-led housing with Indigenous housing providers and communities.
8. Lower Construction Costs
BCH is launching in a challenging context for new housing construction. High costs for land, material and development charges, regulatory bottlenecks, infrastructure challenges, and labour and supply chain constraints are all taking a toll. BCH needs to promote the systems changes, FPT collaboration, and cross-sector commitment that we need to get things back on track.
9. No Time to Waste
Launching a new federal entity on the scale of Build Canada Homes is a massive undertaking and it will take time. Homelessness is continuing its lethal trajectory upward. More than half of Canadians are worried they are one emergency away from losing their homes.
The government must find a way to keep building housing and the infrastructure necessary to support it through existing programs while BCH is established. At the same time, the government can have an immediate impact on affordability and build a safety net by renewing, expanding, and focusing the Canada Housing Benefit in partnership with the provinces. This would ensure struggling people keep their homes and people experiencing homelessness can afford housing, and it would buy Build Canada Homes the time needed to build the homes we need for long-term sustained affordability.
What’s Next
As trade tensions drive new pressures on Canada’s economy, housing has a central role in supporting the federal government’s focused effort to drive growth – attracting investment, creating good jobs, and increasing productivity.
The design of BCH and the coming fall federal budget are key opportunities for our new federal government to develop and lock in the right approach—to deliver on their economic commitments and change the trajectory of Canada’s housing and homelessness crisis.
Read our full submission to the Build Canada Homes Market Sounding Guide consultation here.