Renew Canada’s housing strategy to restore affordability for younger generations
Ottawa’s 2017 National Housing Strategy expires in 2027, and current plans would slash federal housing spending. A new approach must tackle measurement, funding and intergenerational fairness.
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By Torontoer Staff
Canada’s current National Housing Strategy, launched in 2017, was a start but it will not restore affordability on its own. Federal housing spending is scheduled to drop sharply after 2027, and without renewal the country risks leaving younger Canadians with persistent rental and ownership insecurity.
Policymakers must confront three linked problems: housing prices that remain out of reach in many regions, official inflation measures that undercount the true cost of buying a home, and a funding approach that favours protecting retirement incomes over making housing attainable for the next generation.
What stalled prices mean for affordability
National home values have been stagnant for three years, and adjusted for inflation average prices are near 2020 levels. That sounds like progress, but 2020 prices were already unaffordable in major provinces. Returning to those levels does not make housing accessible for younger adults who face higher rents, larger mortgage payments and reduced savings capacity compared with earlier generations.
The picture varies across the country. Prices have moderated in some markets, but other provinces continue to see rising costs. A refreshed strategy must recognise regional differences while setting a clear national objective: stop the upward pressure on home prices so new entrants can plan for stable housing.
We will not fix housing affordability without an honest conversation about what this tension implies for home prices: do we want them to rise, stall, or fall?
Dr. Paul Kershaw, Generation Squeeze
Measure housing inflation the way buyers experience it
Canada’s Consumer Price Index tracks homeowners’ ongoing costs, not the spike in acquisition costs that buyers face. That mismatch helped keep credit cheaper for longer, which in turn fed price growth. Adopting Statistics Canada’s tested "acquisition approach" would measure housing inflation based on the full cost of purchasing a home, including land. That change would give monetary policymakers a more accurate signal and reduce the risk that low rates inadvertently inflate housing costs.
Address the intergenerational gap explicitly
The housing boom of the last quarter century generated large, often unearned gains for many existing homeowners. Those gains have not been matched by equivalent improvements for younger cohorts. A credible housing strategy must acknowledge this redistribution and design tools to rebalance opportunity across generations.
Policy options include targeted programs to expand affordable rental supply, incentives for starter homes, and taxes or levies that capture a portion of windfall gains from rapidly rising property values. Private family transfers, such as intergenerational help on down payments, are not a scalable policy solution.
Funding choices and who pays
Federal planning currently anticipates growing retirement costs while scheduling a sharp reduction in housing investments after 2027. That funding balance reflects political priorities, but it runs counter to the objective of improving long-term affordability for younger Canadians.
One practical route is modestly progressive measures that shift some resources toward housing affordability. Examples include a surtax on high-value properties, targeted adjustments to tax treatment of unproductive housing assets, or recalibrated retirement benefit growth to free up room for housing investments. Any change should include clear, transparent design so benefits reach those with the greatest need.
A short list of priorities for National Housing Strategy 2.0
- Make funding commitments beyond 2027 and protect capital for affordable housing supply.
- Adopt the acquisition approach in national inflation measures so monetary policy responds to housing cost pressures.
- Expand rental supply with focused incentives for mid-rise and purpose-built rental development.
- Implement progressive revenue measures to recapture a portion of windfall gains from high-value properties.
- Increase transparency on regional approvals and development fees to smooth the path for construction across cities.
These steps do not promise overnight relief. Increasing supply and rebalancing incentives takes time, and measurement changes take months to implement. Still, they would create a strategy aligned with the lived experiences of younger Canadians and reduce the chance that future monetary or fiscal cycles repeat past mistakes.
What households should watch for
Households should follow three signals from Ottawa: whether the next strategy includes multi-year funding, whether Statistics Canada adopts an acquisition-based inflation measure, and whether revenue measures to address windfall gains are part of the package. Those elements will determine if the next decade of policy actually improves affordability.
A renewed National Housing Strategy can be practical and targeted. It can combine better measurement, stronger supply commitments and fairer funding to prevent housing insecurity from continuing to shape a generation’s life choices.
housingaffordabilitypolicygeneration squeezeNational Housing Strategy
