Financing and Regulatory Frameworks Are Constraining Canada’s Housing Supply

February 17, 2026 – Current regulatory, financial, and structural barriers are constraining new housing supply, raising costs for both buyers and renters, and increasing long-term economic risks, according to a new report from the C.D. Howe Institute

The Institute’s Housing Policy Working Group finds that Canada’s housing affordability crisis is being worsened by the way governments finance and regulate housing-enabling infrastructure. As a result, many regions, especially Ontario and British Columbia, face mounting pressure and growing vulnerability to construction slowdowns. Without structural reform, these trends risk undermining long-term affordability for Canadians and long-term economic performance.

Co-chaired by CIBC Capital Markets’ Lisa Raitt and Technomics Inc.’s Peter Weltman, these conclusions reflect discussions from the Working Group’s first two meetings this past fall, convening leaders from land development, finance, construction, real estate, as well as academia and public policy.

Members found that municipalities’ heavy reliance on levying charges early on in housing development projects raises prices for both owners and renters, as this discourages construction in high-growth regions and forces households to finance through higher-cost private mortgages. Broad support was also expressed for a modernization of regulation and expansion of borrowing capacity for municipalities, emphasizing the importance of spreading infrastructure cost over the full lifecycle.

Poor coordination across housing, infrastructure, labour, and immigration policy was recognized as a main concern as tax revenues risk falling and housing needs grow. Prolonged decline in housing starts risks permanent loss of skilled trades capacity, including experienced workers and apprentices. The group also emphasized that existing rules are constraining development on greenfield lands and limiting missing-middle housing and flexible ownership models.

Read the Full Report

For more information, please contact: Colin Busby, Director of Policy Engagement; or Raquel Schneider, Communications Officer, C.D. Howe Institute, 647-805-3918, rschneider@cdhowe.org.