Canada can’t solve its housing crisis without the provinces

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Mike Moffatt is the founding director of the Missing Middle Initiative. Lisa Raitt is the co-chair of the Task Force for Housing and Climate and a former minister of transport, labour and natural resources.

Canada is facing a housing crisis of historic proportions. To restore affordability, the country needs to build 5.8 million new homes by 2030. That means doubling the current rate of housing starts – an ambitious goal set by Prime Minister Mark Carney during the federal election campaign. It’s a promise that will define his leadership, and one he’ll be under intense pressure to deliver on.

But no single order of government can solve Canada‘s housing crisis alone. While the federal government sets the tone and provides funding tools, the provinces hold many of the most important policy levers. If they don’t act boldly, they risk becoming the bottleneck in Canada‘s efforts to boost supply, improve affordability and build housing that aligns with climate goals and can withstand extreme weather.

The federal government has taken meaningful steps, including the promise to launch a Build Canada Homes entity and reinstate a 1970s-era tax incentive to spur rental apartment construction. It has also removed GST from new rental builds and made federal land available for housing. These are important changes – but their impact will be limited unless provinces get moving.

In some provinces, we’ve seen positive momentum toward building density: British Columbia‘s reform allowing multiple units per lot and Ontario’s recent relaxation of parking minimums are helpful steps.

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Although both provinces have introduced reforms, these measures have been neutralized by skyrocketing development charges and sluggish approval timelines. As a result, housing starts in both provinces dropped more than 30 per cent in the first quarter of 2025 compared to the previous year.

Municipalities, for their part, are largely “creatures of the province,” and the decisions they make must be compliant with provincial regulations, such as Ontario’s Development Charges Act. Some have begun to implement long-overdue zoning reforms. Some have acted independently, while others were encouraged to do so through the federal Housing Accelerator Fund. These initiatives show promise – but are frequently undermined by provincial inaction or contradictory policies.

Fortunately, governments don’t have to start from scratch. In 2024, the Task Force for Housing and Climate – composed of 15 housing and policy experts, including former Edmonton mayor Don Iveson and Mr. Carney (he’s no longer a member) – published a comprehensive roadmap: Blueprint for More and Better Housing. It outlines more than 140 actionable recommendations across all levels of government to boost supply, deliver affordability, and build homes resilient to climate impacts.

This year, the Task Force followed up with a report card grading federal and provincial governments on their performance. The federal government earned a B, praised for its recent initiatives but urged to improve transparency in programs like the Housing Accelerator and to launch a national hazard mapping initiative to prevent building in flood- and fire-prone areas.

For the provinces, it’s a different story. No province scored higher than a C+, with high fees, slow approvals and inconsistent reforms holding housing back.

Among the provinces, Prince Edward Island earned among the highest marks for reforms that have boosted housing supply. However, the province still needs to do more to ensure new homes meet energy and climate-resilience standards.

British Columbia introduced some of the country’s boldest reforms, but its overall impact is undercut by rising municipal fees and glacial approval processes. Ontario, despite Premier Doug Ford’s public opposition to fourplexes, has quietly legalized more density than most provinces and promised to launch a housing innovation fund. But volatile policymaking, persistent delays in the Greater Toronto Area, and the highest development charges in North America have led to low housing starts and, accordingly, a middling grade of C.

If Canada is serious about tackling the housing crisis, now is the time for leadership, especially at the provincial level. We already know what works. The policy solutions are well understood and widely supported. What’s missing is the political will to implement them.

The housing crisis is not just a federal problem, or a municipal one. It is a national challenge – and solving it requires co-ordination and commitment from all three levels of government. The provinces hold many of the keys to housing, and need to act soon to help unlock supply.