Budget 2026 tabled by the federal government last week included some important measures to address housing affordability, but ultimately came up short in providing new actions or immediate relief, according to industry sources.

Much of what was included in the budget reiterates previous commitments, the Canadian Home Builders’ Association (CHBA) said, most notably to support social and rental housing, with few new measures to support the construction of ownership-oriented homes. 

“Addressing Canada’s housing challenges requires a range of housing options, and investments in social and rental housing are certainly needed,” said CHBA Interim CEO Frank Lohmann.

“But we cannot lose sight of the importance of homeownership in Canada’s housing system.

"We need more policies that support the construction of homes Canadians can aspire to own, alongside the measures being taken to increase rental and non-market housing supply.”

What was in the Budget

Housing-related items in Budget 2026 include:

• A $45-billion total capitalization of Build Canada Homes, comprising the $13 billion committed in Budget 2025, plus a new $13-billion injection beginning in 2027-28. Ottawa says the agency is on track to produce about 200,000 homes over the next decade.
• The ban on foreign purchases of existing homes would be extended to Jan. 1, 2029, with new residential properties exempted to stimulate pre-construction activity.
• The price ceiling for optional mortgage insurance would rise to $1.5 million from $1 million. 
• 30-year amortizations would expand to some first-time buyers, applying only where at least one borrower is a first-time buyer or the home is newly built.

While these measures are important additions to existing initiatives, including some at provincial levels, they may not be enough to jumpstart a sluggish housing market, the head of one major homebuilder said.

“It's positive to have all levels of government talking about solutions to build more homes and drive affordability for housing,” Michael Waters, CEO of Minto Group, told RENXHomes.

Minto is a builder of ownership and rental homes in Ontario, Alberta and British Columbia, as well as in the U.S.

“Homebuyers and renters are really anxious to see some of these initiatives implemented. And there's a lot of really welcome measures. So, I generally would say it's a positive step in the right direction for housing affordability.”

Waters cites the easing mortgage approval requirements, and the expansions of 30-year amortizations and Build Canada Homes as among the moves with the most promise. 

“Some of what we're waiting to see will be what they do with the HST rebate, and where that goes," he said. "Certainly, in Ontario, that will be a big issue.”

In Ontario, the HST rebate program, which began on Apr. 1 and is set to expire on March 31, 2027, has boosted new home sales. The Building Industry and Land Development Association and the Ontario Home Builders’ Association reported on Nov. 3 that new home sales jumped 61 per cent year-over-year in the third quarter of 2026, as a result of the program.

Change to foreign buyers' restrictions to have limited effect

The exemption of new homes on the foreign buyers’ ban, while a positive move on the surface, may have only limited effect.

"It’s important to remember that some provinces, Ontario and B.C. in particular, continue to have restrictions on foreign purchasers," Waters said. "So, I'm not sure the exemption on its own is enough."

Another potential dampener on the market is the Bank of Canada’s (BoC) Oct. 28 decision to raise its target for the overnight rate by 25 basis points to 2.5 per cent. 

“Higher rates don’t help,” Waters said. “Over the short to medium term, rates are going to be a key issue. 

“We're also looking at what happens in Ontario, as it relates to the HST holiday on new homes, which is due to expire March 31. What happens after that? Does it get extended in some way? That will be very, very important.”

On the interest rate front, Jesse Abrams, CEO and co-founder of Toronto-based mortgage brokerage Homewise, doesn’t foresee any increase in the near future.

“I expect (the BoC) to hold from here,” he said. “Our economy is in a rough place, and five-year yields have been falling recently, so I don’t see more hikes or a cut coming.”

Rental market stabilizing

While the industry faces such headwinds, particularly for ownership housing, the rental market seems to be stabilizing. “For the first time in two years, we saw asking rents tick up in Toronto and Vancouver (in October),” Waters said. 

Minto is well positioned for this shift, he said, as it has been building rental housing since its founding in 1955. The company has purpose-built rentals underway in Ottawa and Toronto, and two new rental towers in Vancouver. More projects are in the pre-development pipeline.

New lowrise ownership homes have also been a recent bright spot in Ottawa, the GTA and Calgary, Waters added. Minto’s launch of urban townhomes at The Heights of Harmony in Oshawa, Ont. earlier this year, with units priced at $399,990, produced a “flood" of sales.

“So, the outlook is a bit mixed, and there's certainly some cause for concern," Waters said. "But there's also some breaks of blue sky between the clouds.”