Canada is Slashing its Housing Budget by 56% (Yes, You Read That Right)

If you follow Canadian news, you know there is one headline that dominates everything else: the housing crisis. You would assume that in the face of record unaffordability and supply shortages, the federal government would be ramping up spending to historic highs.

According to a bombshell report from the Parliamentary Budget Officer (PBO), the exact opposite is happening.

Despite the rhetoric, Ottawa is set to cut housing funding by 56% over the next few years. Here is the breakdown of the report and what it means for Canadians.

The Big Number: A 56% Cut

The PBO—Canada's independent budget watchdog—looked at the government’s books and found a glaring disconnect between promises and plans. Federal spending on housing is scheduled to plummet from $9.8 billion in 2025 down to just $4.3 billion by 2029.

Why the massive drop? The government is letting "legacy programs" expire, phasing out social programs, and ending the Canada Housing Benefit. As Better Dwelling puts it, this looks like a "structural pivot away from affordability support."

Defunding the CMHC

Perhaps the most alarming part of the report is the hit to the Canada Mortgage and Housing Corporation (CMHC). The national housing agency is facing a $2.4 billion cut between 2026 and 2030.

This isn't just "trimming the fat." The PBO warns that these cuts are so deep they could impact the CMHC’s ability to simply maintain existing social housing, let alone build anything new. Because the government is legally locked into some funding agreements, the cuts will likely fall disproportionately on unprotected social programs.

The "Build Canada Homes" Reality Check

The government has touted its "Build Canada Homes" (BCH) initiative as the solution to double housing production. The PBO’s analysis of this is devastating.

• The Goal: Double housing production.

• The Reality: The PBO estimates the plan will achieve just 2% of that goal.

The report projects the agency will help produce only 26,000 net new homes over 5 years. Even worse, the cost to taxpayers to achieve this tiny fraction of the goal is astronomical. It works out to roughly $13 billion—or a subsidy of $500,000 per home.

To add insult to injury, the PBO estimates that only half of those 26,000 homes will actually be "affordable." The rest will be market-rate housing that likely would have been built by the private sector anyway.

The Bottom Line

We are currently in a timeline where the housing crisis is at a fever pitch, yet the budget allocated to fix it is being cut in half.

The PBO has warned about this before. In 2021, they noted that the government's massive housing plans often took credit for construction that was already happening. Now, it appears we are paying a premium for a bureaucracy that is delivering 2% of its target while the agencies responsible for affordable housing are being defunded.

For Canadian renters and buyers hoping for relief, the math simply doesn't add up.