Targeting the Right Housing Supply in Canada

The following set of Housing Supply Mix Strategy briefs are based on research conducted by School of Cities and City Building TMU to inform the Task Force for Housing and Climate regarding Canada’s housing needs. 

Quick links to the Supply Mix Strategies >>

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As the 2020s unfold, Canada faces two challenges. First, the nationwide housing affordability crisis is growing, putting social and economic well-being in jeopardy for all Canadians. In 2022, the Canada Mortgage and Housing Corporation (CMHC) recommended that 5.8 million new homes be built in Canada by 2030 as a strategy to restore housing affordability. However, this alone will not solve Canada’s housing affordability crisis.  

Second, the threat of climate change continues to progress, putting pressure on the country to reduce greenhouse gas emissions as quickly as possible. A poll conducted by the Task Force for Housing and Climate found that more than 4 in 5 Canadians want new housing built to be resilient to the impacts of climate change, which shows that Canadians are alarmed about both the housing affordability crisis and the worsening climate crisis. 

About this research 

Existing housing mix in Canada

Aligning housing supply with affordability and climate goals 

The CMHC’s 5.8 million homes target aims to not only build enough homes to meet the projected number of households by 2030, but also aspires to build an additional 3.5 million homes “beyond predicted growth in the number of households,” to restore affordability.¹ Studies show that this process, known as filtering, can reduce prices by a few percentage points but won’t fill the structural gap between income and housing costs and takes too long to trickle down.²  

• Its supply is disproportionately ownership (66%), when demand is overwhelmingly for rental housing. Most housing is built by the private sector, which is subject to speculation and financialization, at a time when many Canadians are experiencing poverty and financial insecurity.  

• Almost 70% of housing is on greenfields (whether auto-oriented suburbs or exurban areas), when building in existing neighbourhoods results reduces both emissions and the costs of commutes. Just 29% of Canada’s housing units are in apartment buildings, despite the benefits of density for affordability and emissions reductions. 

• 95% of Canada’s housing stock is built by the private market, with decades of disinvestment in non-market housing. 

There are signs of improvement, but urban sprawl persists. Across three of these dimensions, Canada is trending in the right direction: we are building more rental, more social housing and significantly more apartment typologies. The biggest challenge remaining is building in existing urban and suburban lands, since a disproportionate share of construction continues to land outside our transit-oriented urban areas. 

• Canada requires a robust Housing Needs Assessment 

Achieving a green and affordable supply mix for all Canadians requires a more robust housing needs assessment beyond a numeric target, and a supply mix strategy to alleviate pressures on the current housing stock and construct new housing with both market and non-market options. Jurisdictions such as British Columbia are conducting these assessments. 

• A supply mix assessment should identify and frontload the right housing that addresses both the affordability and climate crises with simultaneous effectiveness. Empirical evidence shows that building more market-rate supply will not filter to affordability in the near term, although it will alleviate pressure on older existing stock by accommodating market-rate household demand.(i)  

• Not targeting the right supply misdirects scarce resources and infrastructure investment and can “bake in” decades of climate and affordability consequences while putting municipalities in financial risk.(ii) This will require new federal programs that specifically support social housing. 

Supply Mix Strategy Briefs