Continued focus on project viability will be essential to ensuring that progress translates into the supply needed to improve affordability.
By Derek Lobo
Canada’s housing problem is no longer about ambition; it is whether building still makes economic sense.
In its 2026 spring economic update, the federal government outlined progress on housing, arguing that Canada’s outlook has improved from a structural deficit toward a more manageable gap. There is evidence to support that.
Much of this progress has been driven by purpose-built rental housing, and many of the measures included in the update are specifically aimed at supporting rental construction. Rental construction has been strong, and recent policy steps are beginning to support supply.
Updates to the Apartment Construction Loan Program (ACLP) were part of that progress. The spring economic statement expands the program, accelerating more than $7-billion in low-cost loans to support up to 16,500 new rental homes.
But progress does not mean the problem is fully resolved.
Canada recorded roughly 259,000 housing starts in 2025. However, the Canada Mortgage and Housing Corporation (CMHC) estimated in June 2025 that restoring affordability to pre-pandemic levels would require building approximately 430,000 homes annually.
While conditions may have improved since then, a significant gap remains. This is the context in which the government’s housing commitments must now be considered.
During the last federal election, the Liberals committed to reintroducing a modernized version of the Multiple Unit Rental Building (MURB) incentive, a policy aimed at unlocking private capital and accelerating rental housing construction. That commitment has yet to move forward.
This reflects a broader implementation challenge. Canada has set increasingly ambitious housing targets, but the conditions required to deliver them are still evolving.
Prime Minister Mark Carney has called for a significant acceleration in homebuilding. The ambition is necessary and achievable, but only if projects can move forward. Today, many face challenges in doing so.
Across the country, the key constraint is feasibility. Construction costs remain elevated, financing conditions are tight, and timelines are uncertain. Even in strong markets, rental projects are finding it more difficult to meet the thresholds required to proceed.
The result is a familiar dynamic: capital is available, but not yet being deployed at the scale required.
Recent CMHC data reinforces this point. Affordability pressures remain closely tied to increasing rental supply, and while rental construction has been strong, financial conditions and project delays are beginning to affect the future pipeline.
This is how housing shortages persist—not through a lack of intent, but through a gap between policy ambition and the economics of delivery.
Programs like the ACLP demonstrate that well-designed federal tools can make a meaningful difference. They have improved access to financing and supported project viability. There is an opportunity to build on this progress.
While this is a positive step, greater clarity on implementation, particularly timelines, application processes, and approvals will help ensure these measures translate into projects on the ground.
At the same time, supporting activity is not the same as enabling scale.
MURB addresses that gap directly. Originally introduced as a tax incentive to encourage investment in rental housing, it improves after-tax returns, making marginal projects viable and attracting private capital into purpose-built rental construction.
The case for MURB is not about revisiting the past. It is about ensuring the tools needed to deliver on current commitments are in place.
Without further improvements to project viability at scale, developments may continue to face delays. Over time, this could constrain supply and make it more difficult to close the gap.
MURB was not included among the measures advanced. This raises an important question: how will housing targets be met without further strengthening the conditions that allow rental projects to proceed?
The spring economic update reflects important progress, but also highlights the work still to be done.
Continued focus on project viability will be essential to ensuring that progress translates into the supply needed to improve affordability.
Derek Lobo is president and chair of the National Apartment Council, representing private apartment developers in Canada.