The Canadian housing market has been a hot topic for years, and it feels like everyone’s looking for answers. The federal government, trying to tackle the issue head-on, recently rolled out ‘Canada’s Housing Plan’ and followed up with some hefty promises in Budget 2025. But here in Ontario, where the market often feels like it’s playing by its own rules, you might be wondering: what does all this actually mean for you, the homeowner or hopeful buyer?
As a mortgage brokerage in business since 1988, we’ve seen a lot of market shifts. And we’re here to tell you, understanding these federal housing strategies is key to navigating your next steps. Let’s break down the latest federal efforts and see how they stack up against the realities on the ground, especially here in the GTA.
Photo by Chris Robert on Unsplash
Table of Contents
- The Grand Plan: Billions for Builders?
- Ontario’s Reality Check: Where are the Homes?
- Population Puzzle: A New Approach
- Shifting Support: What’s Out, What’s In?
- Frequently Asked Questions
Key Takeaways
- Federal Commitment: Billions are earmarked for housing, especially affordable and rental units, with significant boosts to programs like the Apartment Construction Loan Program (now totaling over $55 billion) and the removal of GST on new rental projects.
- Ontario’s Struggle: Despite federal efforts, Ontario is seeing a drop in new housing starts, with Toronto on track for its lowest condo starts in 30 years due to high costs, weak presales, and reduced investor demand.
- Population Strategy: The federal government is adjusting its population growth strategy from 2026-2028, aiming to better align permanent resident admissions and reduced temporary resident inflows directly with housing capacity.
- Program Changes: Some previous homeowner support programs, such as the Canada Secondary Suite Loan Program and Canada Greener Homes Grant, are being phased out or closed, while the Underused Housing Tax is eliminated from 2025.
The Grand Plan: Billions for Builders?
The federal government has definitely stepped up, launching ‘Canada’s Housing Plan’ and creating the ‘Build Canada Homes’ agency. We’re talking about billions in investments here, all aimed at significantly boosting housing supply and affordability. The focus is squarely on non-market, affordable, and purpose-built rental housing. Think big apartment complexes and student residences, not necessarily your typical detached home in Oakville.
Budget 2025, for its part, threw another $25 billion into new housing measures. A huge chunk of that, over $55 billion in total, is going to expand the Apartment Construction Loan Program. And here’s a good one for developers: they’re removing the GST on new rental projects, which should, in theory, make it cheaper to build and encourage more rental units to come online.
The bottom line for you? These initiatives are designed to increase the overall housing supply, particularly for renters and those seeking more affordable options. If these plans work, we could see more rental units popping up in places like Vaughan and Markham, which might ease some of the pressure on the broader GTA housing market.
Ontario’s Reality Check: Where are the Homes?
But let’s be real for a moment. Federal ambition is one thing, and the actual pace of construction here in Ontario is quite another. Despite all these big plans, we’re actually seeing declining housing starts across the province. Toronto, for example, is on track for its lowest condo starts in 30 years. That’s a huge problem when you consider how many people want to live here.
Why the slowdown? It’s a mix of things: high construction costs, a dip in presales for new developments, and reduced investor demand. Builders in places like Mississauga or Burlington are facing tough choices. If a project to build a new condo tower in downtown Hamilton, where units might sell for $650,000, isn’t getting enough presales, it might just get delayed or even cancelled. This creates a real bottleneck for housing market supply, even with federal funds available.
Here’s a quick look at the stark difference between demand and actual construction in parts of the GTA:
| City | Typical New Condo Price (Est.) | Housing Starts Trend |
|---|---|---|
| Toronto | $800,000 – $1,200,000 | Significantly down, multi-decade low |
| Mississauga | $700,000 – $950,000 | Declining |
| Richmond Hill | $750,000 – $1,100,000 | Stagnant/Declining |
This table shows you a snapshot, and it’s clear that the ‘supply surge’ we’re hoping for is still struggling to get off the ground in many areas.
Population Puzzle: A New Approach
Another piece of the puzzle is population growth. For years, Canada has welcomed a lot of new residents, and that’s been great for our economy and diversity. But let’s be honest, it’s also put immense pressure on our housing supply. The federal government is adjusting its population growth strategy from 2026-2028, linking permanent resident admissions and reduced temporary resident inflows directly to housing capacity.
So what does this actually mean for you? Well, the idea is to ensure that population growth doesn’t outpace our ability to build homes. If fewer people are competing for the same limited number of homes in Ajax or Whitby, that could, theoretically, help stabilize prices or at least slow down rapid appreciation. It’s a recalibration, a recognition that we need to match our welcome with our capacity.
For aspiring homeowners in the GTA, this could mean a slightly less frenzied market. But it doesn’t change the fundamental need to understand your finances, and how much down payment you’ll need for a home in Brampton or Milton.
Shifting Support: What’s Out, What’s In?
It’s not just about new programs; some existing ones are changing or disappearing. For instance, the Canada Secondary Suite Loan Program and the popular Canada Greener Homes Grant are being phased out or have closed to new applications. The Greener Homes Grant, which helped homeowners with energy-efficient retrofits, closed to new applicants in early 2024, and the loan program closed applications in October 2025. The Secondary Suite Loan Program, which aimed to help you add rental units, was initially launched with a loan limit of $80,000 in early 2025, but it’s now listed as not proceeding.
And for those who own multiple properties, or might have been concerned about it, the Underused Housing Tax (UHT) is being eliminated from 2025. This tax, which applied to vacant or underused residential properties, proved to be a bit of a headache for many, even some Canadian owners. Its removal simplifies things, which is always a good thing in our book.
These shifts mean you’ll need to stay on top of what’s available if you’re looking for federal assistance. It’s a dynamic environment, and securing the best mortgage rates and understanding how these changes affect your borrowing power is more important than ever. This is precisely why working with a mortgage broker compared to a traditional bank can be so beneficial; we’re here to help you make sense of it all.
Frequently Asked Questions
1. What is the Canada Housing Plan and how does it affect Ontario homeowners?
A: The Canada Housing Plan is a federal initiative designed to increase housing supply through massive investments, including the $55 billion Apartment Construction Loan Program. For Ontario homeowners, the plan focuses heavily on rental and affordable housing. While this may ease the rental market in the GTA, the plan’s success depends on overcoming local construction delays and high building costs currently slowing down new starts in cities like Toronto and Hamilton.
2. Is the Canada Greener Homes Grant still available in 2026?
A: No, the Canada Greener Homes Grant is no longer accepting new applications, having closed in early 2024. Additionally, the federal government has phased out the Canada Secondary Suite Loan Program as of late 2025. Homeowners looking for energy-efficient retrofits or suite additions should consult with a mortgage broker to explore alternative financing options or private lending solutions.
3. Why are housing starts declining in Toronto despite federal funding?
A: Despite billions in federal commitments, Toronto is seeing its lowest condo starts in 30 years. This reality check is driven by high construction costs, a significant dip in pre-construction sales, and reduced demand from investors. Even with initiatives like the GST removal on new rental projects, many developers in the GTA are delaying projects until market conditions and interest rates become more favorable.
4. How does Canada’s new 2026–2028 population strategy impact housing?
A: The federal government has shifted its strategy to directly link population growth, specifically permanent and temporary resident admissions, to housing capacity. By better aligning the number of new arrivals with the number of available homes, the goal is to reduce the “frenzied” competition for limited housing in Ontario suburbs like Brampton, Milton, and Whitby, potentially stabilizing prices over the long term.
5. Is the Underused Housing Tax (UHT) still in effect for 2026?
A: As of 2025, the federal government has eliminated the Underused Housing Tax (UHT). This move was intended to simplify the tax system for property owners after the initial rollout caused significant confusion. While this removes a layer of paperwork and potential cost for those with vacant or underused secondary properties, it remains crucial for owners to stay informed on local municipal vacancy taxes which may still apply.
So, will the federal housing plan truly lead to a supply surge or continued strain for Ontario? Only time will tell, but the government is clearly aiming to make an impact. For you, the homeowner or aspiring buyer in the GTA, staying informed and having a trusted advisor by your side is your best strategy. We’ve got 37 years of experience helping Ontarians navigate these waters, and we’re ready to help you too.
Got questions? Contact us today or call 905-455-5005. No pressure, no obligation.
About the Author: Aman Harish
Aman Harish is a Co-Owner and Mortgage Broker at Canadian Mortgage Services. With over 14 years of experience in the Canadian lending landscape, Aman specializes in helping homeowners and buyers develop proactive renewal strategies and optimize their debt structure in challenging economic climates. His commitment is to ensuring clients not only secure the best rates but also build long-term financial resilience.
