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'We Have Been Failing Young Canadians': The Red Tape Behind Ottawa's Stalled Housing Push
Canada started 259,028 homes in 2025, according to CMHC. That looks respectable until you set it beside the agency's own September 2026 estimate that the country needs up to 4.69 million new homes by 2036. The same report warned that construction could slow from here.
Benjamin Tal, deputy chief economist at CIBC World Markets, put the gap in plain language:
"We have been failing young Canadians ... and we have to change it."
He's right. Most of the federal response, though, aims at the step that is easiest to fix.
Where the years actually go
Ottawa's main tool is the Housing Design Catalogue, a book of pre-approved home designs modelled on the templates Canada used after the Second World War. The idea is simple. If a city has already approved a fourplex design, a builder skips months of back-and-forth with planners.
The second tool is money with strings attached. Through the Housing Accelerator Fund, Ottawa pays cities that end exclusionary zoning, such as allowing four units on a lot by right. Cities that drag their feet risk losing federal dollars for pipes, roads and transit.
Both ideas have merit. Approval delays are real, and they cost builders interest on land they can't build on yet.
But zoning changes don't end the fight.
A council can allow fourplexes everywhere and still watch neighbours oppose a specific project at the development permit stage, arguing about height, shadows or parking instead of density. The objection simply moves down the line. And the three levels of government still don't plan together. Ottawa sets targets, the province sets the rules, and the city pays for the water mains, the sewer upgrades and the extra power capacity that new density needs, often without the budget to do it.
A permit can't fix the math
Picture a builder holding a serviced lot in Winnipeg with a catalogue-approved fourplex design in hand. The paperwork is done. Before a shovel moves, the builder still has to borrow construction money at rates the Bank of Canada is expected to keep above pre-pandemic levels, and then find framers, plumbers and electricians in a trade where roughly one in five workers is near retirement. If rents or sale prices can't cover those costs with a margin left over, the project sits.
Developers call this calculation the pro forma. It decides more projects than any planning committee does.
A faster approval makes a project that already works start sooner. It does very little for one that doesn't pencil out, and right now plenty don't.
Manitoba feels this from both ends
Winnipeg's rental vacancy rate sat around 1.8% (2023) in 2024, according to CMHC, among the tightest readings in years. People who can't buy are competing for very few empty units. At the same time, buyers moving in from Ontario and B.C. for relative affordability have pushed local prices up for people who already live here.
Now the demand side is shifting. Statistics Canada reported that the population fell by 55,025 in the first quarter of 2026. CREA data show national home sales down 6.7% year over year as of September 2026.
That will tempt some to say the pressure is easing. I'd read it the other way. Slower sales and fewer newcomers make builders more cautious, not less, and the 1.8% vacancy problem doesn't solve itself because the headlines got quieter. A cooling market is precisely when half-finished housing plans get shelved.
The supply that's already sitting there
For readers over 40 with solid equity, one change deserves a closer look. Fourplex-by-right zoning means many existing lots can legally hold more homes than they do today. A secondary suite or a backyard unit doesn't wait on a developer's pro forma or a federal catalogue. It waits on a homeowner's own numbers, a building permit and a contractor's schedule.
That route carries real costs and risks: construction financing, landlord obligations, and the tax treatment of a property that is no longer purely your principal residence. Talk to your accountant before you pour a foundation.
But the young Canadians Tal is talking about include our own kids. The quickest new home available to them over the next few years might be built behind a house that's already paid for, on a street that has been zoned for it since the rules changed.
Canada started 259,028 homes in 2025, according to CMHC. That looks respectable until you set it beside the agency's own September 2026 estimate that the country needs up to 4.69 million new homes by 2036. The same report warned that construction could slow from here.
Benjamin Tal, deputy chief economist at CIBC World Markets, put the gap in plain language:
He's right. Most of the federal response, though, aims at the step that is easiest to fix.
Where the years actually go
Ottawa's main tool is the Housing Design Catalogue, a book of pre-approved home designs modelled on the templates Canada used after the Second World War. The idea is simple. If a city has already approved a fourplex design, a builder skips months of back-and-forth with planners.
The second tool is money with strings attached. Through the Housing Accelerator Fund, Ottawa pays cities that end exclusionary zoning, such as allowing four units on a lot by right. Cities that drag their feet risk losing federal dollars for pipes, roads and transit.
Both ideas have merit. Approval delays are real, and they cost builders interest on land they can't build on yet.
But zoning changes don't end the fight.
A council can allow fourplexes everywhere and still watch neighbours oppose a specific project at the development permit stage, arguing about height, shadows or parking instead of density. The objection simply moves down the line. And the three levels of government still don't plan together. Ottawa sets targets, the province sets the rules, and the city pays for the water mains, the sewer upgrades and the extra power capacity that new density needs, often without the budget to do it.
A permit can't fix the math
Picture a builder holding a serviced lot in Winnipeg with a catalogue-approved fourplex design in hand. The paperwork is done. Before a shovel moves, the builder still has to borrow construction money at rates the Bank of Canada is expected to keep above pre-pandemic levels, and then find framers, plumbers and electricians in a trade where roughly one in five workers is near retirement. If rents or sale prices can't cover those costs with a margin left over, the project sits.
Developers call this calculation the pro forma. It decides more projects than any planning committee does.
A faster approval makes a project that already works start sooner. It does very little for one that doesn't pencil out, and right now plenty don't.
Manitoba feels this from both ends
Winnipeg's rental vacancy rate sat around 1.8% (2023) in 2024, according to CMHC, among the tightest readings in years. People who can't buy are competing for very few empty units. At the same time, buyers moving in from Ontario and B.C. for relative affordability have pushed local prices up for people who already live here.
Now the demand side is shifting. Statistics Canada reported that the population fell by 55,025 in the first quarter of 2026. CREA data show national home sales down 6.7% year over year as of September 2026.
That will tempt some to say the pressure is easing. I'd read it the other way. Slower sales and fewer newcomers make builders more cautious, not less, and the 1.8% vacancy problem doesn't solve itself because the headlines got quieter. A cooling market is precisely when half-finished housing plans get shelved.
The supply that's already sitting there
For readers over 40 with solid equity, one change deserves a closer look. Fourplex-by-right zoning means many existing lots can legally hold more homes than they do today. A secondary suite or a backyard unit doesn't wait on a developer's pro forma or a federal catalogue. It waits on a homeowner's own numbers, a building permit and a contractor's schedule.
That route carries real costs and risks: construction financing, landlord obligations, and the tax treatment of a property that is no longer purely your principal residence. Talk to your accountant before you pour a foundation.
But the young Canadians Tal is talking about include our own kids. The quickest new home available to them over the next few years might be built behind a house that's already paid for, on a street that has been zoned for it since the rules changed.
Sources
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