Fraser Institute Flags Risks in Ottawa’s New “Build Canada Homes” Agency

Ottawa | September 30, 2025 — Mortgage.Expert News Desk

Filed on 29-Sep-2025, 12:30 EST via Mortgage Professional Australia.

Canada’s federal government has launched a new housing agency — “Build Canada Homes” — to accelerate affordable housing supply. But the Fraser Institute, a leading policy think tank, is warning that the initiative risks repeating past policy mistakes, potentially distorting the housing market rather than fixing it.

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What the Agency Proposes

The new “Build Canada Homes” agency is intended to:

• Streamline federal funding into affordable housing projects.
• Partner with provinces, municipalities, and developers to increase rental and ownership stock.
• Expand financing tools beyond CMHC’s existing programs to speed construction.

Ottawa says the program will address the chronic shortage of affordable units and relieve pressure on Canadians struggling with high rents and home prices.

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Fraser Institute’s Concerns

The Fraser Institute argues that:

1. Risk of Inefficiency: Government-led construction may face the same cost overruns and delays that have plagued past public housing projects.
2. Crowding Out Private Builders: By competing for land and labor, a large federal agency may actually drive up costs for private-sector developers.
3. Policy Redundancy: Canada already has CMHC and multiple housing funds; adding another agency risks duplication rather than efficiency.
4. Market Distortions: Artificially subsidized units could distort local housing markets, leaving taxpayers to cover future gaps.

“Government doesn’t have a strong track record of building housing efficiently. Policy should focus on freeing up land supply and reforming municipal zoning, not creating another federal bureaucracy,” the institute noted.

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The Wider Debate

Supporters of the program counter that:

• With affordability at crisis levels, government action is essential.
• Federal support can reduce risks for builders, making affordable projects viable.
• Waiting for market forces alone risks leaving low- and middle-income families behind.

The clash reflects a broader debate in Canada’s housing policy: Should affordability be solved by stronger public intervention, or by deregulating markets and letting supply adjust naturally?

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Implications for Borrowers & Investors

• Borrowers: More subsidized units could stabilize rents in the long term, but short-term effects may be minimal as projects take years to complete.
• Investors: Condo and rental property investors may face increased competition if new government-backed rentals flood certain markets.
• Policy Watchers: Future mortgage demand will depend on how effectively Build Canada Homes boosts actual supply, especially in cities like Toronto and Vancouver where affordability is stretched.

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Outlook

The coming year will test whether the new agency can deliver tangible results. Analysts say the key is coordination — avoiding duplication with CMHC, ensuring provinces/municipalities buy in, and targeting areas with the greatest need. Otherwise, Build Canada Homes could risk becoming another layer of bureaucracy without easing affordability.