The first item on former finance minister and Liberal leadership candidate Chrystia Freeland’s 10-point plan to “end the housing crisis” is a pledge to link immigration to home construction. “For the good of newcomers and all Canadians, we must not grow our population faster than we can build homes.” 

To deliver on the spirit of that promise, if she became prime minister Freeland would have to stop all immigration immediately and maybe even deport thousands of recent migrants. Canada’s population increased by more than 950,000 people in 2024, according to Statistics Canada, while the country’s builders started work on only about 245,000 units, according to Canada Mortgage and Housing Corporation.

Whatever-it-takes thinking is in the air. U.S. President Donald Trump’s apparent belief in Manifest Destiny has inspired serious talk in Canada of erasing interprovincial trade barriers and building west-east pipelines and high-speed trains. There’s political space to be bold. Yet when it comes to the crisis that has dominated federal politics for most of the past few years, the ideas remain decidedly stale and uncreative. 

Conservative Leader Pierre Poilievre also would tie immigration to housing, a desperate fix that portends a long list of unintended consequences for an aging society like ours. Poilievre and Freeland agree on several other fronts. Both would eliminate the GST for some buyers of new homes, and both would make federal transfers to municipalities conditional on mayors agreeing to make it easier to build homes. 

When political blood enemies are shopping the same aisle for policy ideas, it might be a sign that it’s time to blow up everything and start over. 

Poilievre made housing the central plank of his successful leadership campaign in 2022. Freeland’s 2024 budget committed $8.5 billion to back the Liberal government’s pledge to build nearly four million homes by 2031. That’s a pace of almost 484,000 units per year if you start the clock in 2024. 

Optimistically, CMHC predicts housing starts could hit 243,000 this year, but its economists reckon a smaller number is more realistic. The country is desperate for more shelter, the political class has been obsessed with the issue for years and yet construction is slowing.

“When the economic model does not support vertical construction or new supply, I would say the model is broken and needs to be rethought,” said Adrian Rocca, chief executive and founder of Fitzrovia, a builder of rental properties, primarily in Toronto. “There needs to be a sense of urgency around changing that economic model.” 

Rocca has ideas on how to do that. Notably, none involve adding more lather to the “Canadian dream” of home ownership, a myth that has distorted the housing market more than foreign buyers ever could. 

It fuels the fear of missing out that causes individuals and families to pile up debt while chasing runaway housing prices. It serves as justification for all the demand-side incentives that favour real estate over more productive forms of investment. And it provides moral cover for the NIMBYs who insist their city councillors let them live their “dream” inside a protective bubble of zoning restrictions. 

Freeland would increase the annual contribution to the First Home Savings Account to $10,000 from $8,000, and the lifetime limit to $50,000 from $40,000. The proposal looks harmless, but it’s yet another measure that would stoke demand when supply can’t keep up. Nudging younger people to save makes sense, but why skew investing decisions towards buying a house? Remove the strings. The economy would be better off if more households felt secure enough to up stakes and move to take better jobs, help with the “succession tsunami” by taking over businesses from aging founders or start companies of their own.

Such policies also reinforce Canada’s version of a caste system, as surveys find that renters tend to be poorer than homeowners. The answer isn’t necessarily creating an ownership society. According to Statistics Canada’s 2023 survey of financial security, 15 per cent of younger renters had a net worth of at least $150,000, compared to five per cent in 2019, thanks to investments in real estate that wasn’t their principal residence and stocks and bonds. 

“I am really passionate about changing the optics around renting,” Rocca said. “I lived in Europe for seven years, in London, and renting was pretty normal. Lots of people rented. I thought it was really strange, coming back to Canada, that there wasn’t the same pride around rentership as there was in Europe or other parts of the world.”

Rocca’s strategy involves offering a competing dream: one of comfort and convenience. A Fitzrovia lease comes with a concierge, access to a virtual health clinic with on-site diagnostic equipment, luxury fitness facilities, subsidized preschool and kindergarten programs and third-wave coffee shops. Unlike other developers, Fitzrovia is vertically integrated—it buys the land, puts up the buildings and then manages the properties. The idea was to make property development a safer bet for institutional investors that have limited appetite for risk. “We pride ourselves on wanting to be the widget manufacturer of the apartment business,” Rocca said. 

An innovative business model can only do so much. Interest rates remain an impediment to building apartment towers because institutional investors can earn a decent return by parking their money in risk-free assets. But with inflation at target, and a potentially inflationary tariff war on the horizon, the Bank of Canada probably will pause its interest-rate cuts. 

So if governments want to turbocharge home construction, they will have to make bolder bets themselves. Rocca recommended a backstop that would allow municipalities to waive developments, a 20-year holiday on property taxes and a more aggressive use of CMHC’s balance sheet to underwrite the financing of big real estate projects. 

All those suggestions would enrich Fitzrovia, obviously. It might be time to worry less about that and concentrate on outcomes. If the problem is supply, listen to the suppliers. 

Kevin Carmichael is The Logic’s economics columnist and editor-at-large. He has spent more than two decades covering economics, business and finance for outlets including Bloomberg News, The Globe and Mail and the Financial Post, where he also served as editor-in-chief.