Prime Minister Mark Carney has launched a new federal housing agency that he says will partner with the private sector to build non-market homes for Canadians struggling with affordability.
Mr. Carney announced on Sunday that the government is providing Build Canada Homes with $13-billion in initial capital.
It has also selected six cities where projects will be developed on federal lands to deliver 4,000 factory-built homes. They include Dartmouth, Longueil, Que., Ottawa, Toronto, Winnipeg and Edmonton.
“Build Canada Homes will announce a series of additional projects across the country in the months ahead, leveraging those public assets, public lands [and] partnering with the private sector to build at scale,” Mr. Carney said during a news conference in Ottawa.
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The agency was introduced just ahead of Parliament’s return on Monday, allowing Mr. Carney to check off another campaign promise before squaring off with Conservative Leader Pierre Poilievre in the House of Commons for the first time.
Both U.S. tariffs and slowing economic activity have weighed on housing construction, raising concerns that Canada could fall further behind on its homebuilding ambitions.
Mr. Carney said during the federal election campaign that he would move government machinery quickly to tackle the country’s economic challenges. While he’s struggled so far to secure any U.S. tariff relief, he’s launched his major promise − the federal Major Projects Office − and announced the first set of projects that will be reviewed for fast-track approval.
On Sunday, the Prime Minister pitched Build Canada Homes as both an economic opportunity and a social responsibility. He said the new agency will adopt the government’s “Buy Canadian” policy and prioritize innovative construction methods such as factory-built and modular housing.
“We have a responsibility to those less fortunate. We don’t build enough social housing, we don’t build enough affordable housing. So, it’s us filling our core role, but in a smart way that drives innovation,” Mr. Carney said.
Ana Bailão in June, 2023. The former municipal politician has also worked on affordable housing in the private sector.Cole Burston/The Canadian Press
The Prime Minister tapped former Toronto city councillor and mayoral candidate Ana Bailão to head Build Canada Homes. Ms. Bailão, who was the deputy mayor during John Tory’s tenure and was active on the housing file in Toronto, will serve as chief executive officer.
Ms. Bailão was the head of affordable housing and public affairs for real estate company Dream Unlimited Corp. before entering the Toronto mayoral race in 2023. She came in second to Olivia Chow, with 32 per cent of the vote.
Of Build Canada Homes’ initial capitalization, $1-billion will go toward a transitional and supportive housing initiative, which will be aimed at addressing homelessness and housing insecurity. Ottawa plans to work with other levels of government to provide wrap-around services, which are additional supports provided to vulnerable individuals.
Mr. Carney said the agency will also partner with Nunavut Housing Corporation to build more than 700 public, affordable and supportive housing units in the territory.
As the government eyes more housing construction on public lands, it has decided to transfer Canada Lands Company, a Crown corporation that manages federal real estate, under the Build Canada Homes portfolio.
Build Canada Homes will also be responsible for the Canada Rental Protection Fund, which former prime minister Justin Trudeau’s government promised in 2024. The $1.5-billion fund aims to help the non-profit housing sector acquire rental apartments to preserve their affordability.
Build Canada Homes is being launched before Parliament’s return on Monday, allowing Prime Minister Mark Carney to check off a campaign promise before returning to the House of Commons.Sean Kilpatrick/The Canadian Press
Non-profit housing advocates and stakeholders have applauded the government for prioritizing non-market housing in its vision for Build Canada Homes.
Raymond Sullivan, executive director of the Canadian Housing and Renewal Association, said in a statement that it shows “the government is focusing their attention where it is needed most.”
But University of Toronto senior housing researcher Carolyn Whitzman said Build Canada Homes will have to significantly expand its work to make a significant impact on the lives of Canadians.
“The scale of it is not as large as many of us who’ve been running the numbers would like to see, but I think the approach is the right approach,” Dr. Whitzman said.
Mr. Poilievre dismissed the Liberal government’s housing plan, predicting that it will have the effect of delaying needed construction starts.
“The funny thing is, we all agree that Canada has everything you need for affordable homes. In fact, housing should be dirt cheap, because we have the most dirt to build on. We have the builders, we have the trades, we have the companies,” Mr. Poilievre said in a Sunday morning speech to Conservative caucus members on Parliament Hill, a few hours before the Prime Minister’s announcement.
“What’s standing in the way is bureaucracy. And so, Mark Carney’s solution is to add another bureaucracy that will only slow things down. It took him six months to set up a new office, an office that has not built a single new home.”
The federal agency is being established as stakeholders urge the government to help spur more construction amid a sluggish housing market in some parts of the country.
Housing starts across Canada’s seven key census metropolitan areas in the first half of 2025 have been flat relative to 2024, according to a recent report from the Canada Mortgage and Housing Corp. However, the report said the ”overall stability masked sharp regional differences.”
Housing starts in Toronto, for example, plummeted to the lowest rate since 1996, when adjusting for population.
The CMHC said the continuing construction slowdowns across major metropolitan areas “pose risks to future housing supply, work-force retention and affordability.”
“In the context of trade tensions, economic uncertainty and slower population growth, we expect combined starts across the 7 major CMAs to recover only gradually, with modest improvement by 2027,” the report said.
Geoff Cape, chief executive officer of Canadian modular-housing builder Assembly Corp., said the government’s plan to buy such housing in volume is “tremendous news.”
Mr. Cape says the benefits of prefabricated homes come from faster timelines – as much as half those of traditional construction methods – cost savings between 10 to 20 per cent of standard, as well as a lower carbon footprint.
With reports from Bill Curry in Ottawa and Shane Dingman in Toronto