The 2026 Federal Budget was a watershed moment for the movement to end homelessness with a federal commitment to ensure all Canadians have a safe place to call home within 10 years, backed by large scale housing investment and direction to collaborate with provinces and municipalities.
In the days since, many people have asked: is it actually possible to end homelessness? And is there enough money promised in the budget to make it happen?
The short answer to the first question is a definitive yes. Canada has a demonstrated ability to end homelessness at scale in natural disasters. We can draw on that experience and build on it with a wealth of Canadian and international experience in preventing, reducing and ending all homelessness. How the federal government leads and executes on their bold national vision will determine their success.
And on the question of money: is the funding allocated in the federal budget enough to end homelessness? By itself probably not, but it is more than enough to get started – and as negotiations with provinces and territories unfold, we will see what they contribute and what else they ask for. We expect federal and provincial/territorial contributions will change through negotiation and adapt over time as needs, plans, and results evolve. This government’s approach seems geared to ambition, urgent action, and continuous improvement.
Here’s what we’re taking away from Prime Minister Mark Carney’s budget announcement and what we’re watching for next.
A Bold New Vision on Homelessness
A commitment to end homelessness with essential federal leadership: The federal government has set a clear and ambitious goal, committing to put Canada on a path to end homelessness in the next decade. This Budget sets the tone, defines the government’s ambition, and backs that ambition with billions in new investments in deeply affordable and supportive housing and an extension and expansion of the Canada Housing Benefit and Reaching Home. Previous federal homelessness goals have not been backed with adequate deeply affordable and supportive housing or provincial alignment.
A call to other levels of government: The Budget recognizes that the crisis is too big for any one government to tackle alone and calls other levels of government to the table. This coordination and alignment around shared outcomes is a critically important step. While the federal government hasn’t yet committed to a Canada Housing Accord, they’re proposing a renewed partnership, where the federal government invests in capital and housing infrastructure, and the provinces and territories take the lead on operations and wraparound supports.
Recognition that homelessness is not just a housing problem, but it is always a housing problem: The Budget reinforces what we have long known: the solution to homelessness starts with a home. The government defines their interventions around three pillars: help (supports as people transition out of homelessness), housing, and healthcare. It is a recognition that homelessness isn’t only a housing issue, but it is always a housing issue.
Alignment with CAEH’s Model for Ending Homelessness: The budget and subsequent announcements outline an approach to ending homelessness grounded in municipal leadership with provincial and federal government support and alignment. Data modernization and the expectation of real-time community level data is a critical first step to coordinate local efforts and implementing the model for ending homelessness, which has been proven to prevent, reduce and end homelessness at a community level.
What We’re Watching For
Defining an end to homelessness: It will be critical to determine how we measure ending homelessness, as outcomes drive strategy and will frame provincial negotiations. It will be important to use a definition aligned with achieving functional zero.
Functional zero is defined as when the number of people experiencing homelessness is less than the number of people a community can house in a month. This means that if a community can house more people than are actively homeless in a month, it has reached functional zero. The goal is to ensure that homelessness is rare, brief, and non-recurring, indicating that systems are in place to prevent and resolve homelessness effectively.
How the government then prioritizes initial efforts will be important. Canadians strongly support action on homelessness but are looking for rapid, visible progress. Defining shared outcomes and priorities will guide investment, strategy and impact.
Durable and effective leadership: Leadership is the secret sauce to ending homelessness. Look anywhere in the world where there has been progress on homelessness and you will find durable and effective local, provincial/regional, and national leadership. The Prime Minister’s leadership on ending homelessness is vital and he has made important moves to secure provincial and municipal partnership. We’ll be watching to see how the Prime Minister’s leadership will be received by provinces and cities.
Canada Housing Benefit: The Canada Housing Benefit is the single most powerful homelessness prevention measure governments have at their disposal. Our analysis shows that deep and rapid reductions in homelessness are possible if governments re-imagine the CHB around a residual income approach, prioritizing renter households in deepest poverty and housing need. Will the provinces push the federal government to expand the CHB?
Reaching Home & Veteran Homelessness Program: Reaching Home has been the centrepiece of federal homelessness strategy. Reaching Home could be highly effective in achieving rapid community homelessness reduction by embedding the Model for Ending Homelessness, along with real-time data and data modernization, community leadership capacity building and flexible funding. Prevention is essential, and communities need a system in place that sees homelessness as it happens so they can respond quickly to changes in homelessness and target prevention activities and housing investment.
The federal government also announced an extension of the Veteran Homelessness Program (VHP). There is an opportunity with the renewal of the VHP to re-imagine it after the highly successful U.S. HUD-VASH model.
Supportive and deeply affordable housing and Housing First: The budget makes huge and essential investments in supportive and deeply affordable housing. It will be important that supportive housing is prioritized for those in greatest need and the federal government works with the provinces to establish national standards grounded in the findings of At Home/Chez Soi.
The vast majority of people experiencing homelessness do not need a supportive housing intervention, but supportive housing is essential for those with complex and long-term addiction, mental health, and/or medical needs who cannot safely or successfully live in market or affordable housing. The federal government, in partnership with the provinces, should consider scaling scattered site housing interventions grounded in Housing First as a way of achieving progress quickly. We will be watching to see if this budget’s supportive housing investments will allow the introduction of intensive housing for people with people with severe cognitive disability and support the conversion of transitional housing or emergency shelter to supportive housing.
Summary of Major Investments
Renewed funding of key programs
Budget 2026 responded to calls from the sector to provide funding continuity and certainty on key programs, including Reaching Home (RH), the Veteran Homelessness Program (VHP) and the Canada Housing Benefit (CHB).
Reaching Home and the Veteran Homelessness Program
Budget 2026 invests $6.5 billion in RH and the VHP over 10 years, importantly noting that the federal government will maintain community-led approaches to prevention and homelessness services.
Earlier this year, CAEH put forward recommendations on how the government can better leverage Reaching Home to accelerate homelessness reductions, including a reduction-focused funding structure that builds strong local systems. We also argue that Reaching Home should be explicitly oriented toward achieving measurable, community-level reductions in chronic, unsheltered, and veteran homelessness. With a broad federal goal on ending homelessness, now is the time to orient the federal government’s largest homelessness program around that same goal.
Canada Housing Benefit
Budget 2026 invests $5.6 billion in the Canada Housing Benefit over 10 years, recognizing the important role of rental assistance in preventing and reducing homelessness. The impact of this investment will depend on how the next iteration of funding is structured and negotiated through the bilateral agreements. Earlier this year, CAEH worked with Blueprint to analyze the current Benefit and determine the impact of an improved benefit focused on preventing homelessness. Getting the structure right will be critical to ensuring the significant federal investment translates to meaningful homelessness prevention and better housing outcomes.
Housing Investments
Knowing that homelessness is a housing problem, Budget 2026 moves Canada in the right direction.
Commitment to Tripling the Pace of Non-Market Housing Development
Budget 2026 proposes to provide an additional $13 billion over ten years, on a cash basis, to boost the capital of Build Canada Homes and build non-market housing – with a goal to triple the pace of non-market housing starts to 24,000 per year over the next decade. This pace of construction was roughly the same as Canada produced through the 1970’s and early 1980’s.
Integrated Supports Fund through BCH
Budget 2026 proposes to provide $1.8 billion over four years, starting in 2027-28, and $3.2 billion in future years for a new Integrated Supports Fund, delivered through BCH. This funded is intended to support projects that bring housing together with health, mental health, addictions, and social supports.
Transitional and Supportive Housing Investment through BCH
Budget 2026 also proposes to provide an additional $3.6 billion over four years, starting in 2027-28, and $6.4 billion in future years, through Build Canada Homes to build new supportive and transitional housing across Canada. Federal funding will support capital costs, while provincial and territorial partners will be expected to fund ongoing operations and wraparound services.
The Next Step
Budget 2026 represents a watershed moment in our work. This Budget is a decision to put Canada on the path toward ending homelessness – how they move along that path will depend on their next steps. We’ll be watching how provinces and municipalities step up to the plate, the federal government’s approach in working with other levels of government, the shape the CHB takes in the coming months, and how the federal government plans to use Reaching Home to drive community-level reductions in homelessness.
The Alliance is focused on ensuring that these commitments translate to real change in the lives of people experiencing homelessness. CAEH will continue to work with the federal government to ensure we make rapid and meaningful progress. The Budget is just the beginning, and the next step of our work starts now – more to come!