It’s been just over a month since the November 4, 2025 release of federal Budget 2025. It’s the first big financial plan from Prime Minister Mark Carney’s team, and housing is a critical focus. The budget doesn’t reinvent the wheel, but it doubles down on the idea that more supply equals lower costs. The core of the housing push is this new agency called Build Canada Homes (BCH). Launched just a couple months back in September, it’s getting $13 billion over five years to crank up construction. It is a one stop shop that rolls up old programs like the Housing Accelerator Fund and federal land deals into something faster and punchier. So, is the $13 billion new money? Is it recycled money from the old programs? The ‘net’ amount of added investment is an important question. The BCH goal is ambitious: double homebuilding from about 280,000 units a year to 430,000 or even 480,000 by the early 2030s. That’s according to the Canada Mortgage and Housing Corporation (CMHC), which crunched the numbers needed to get us back to 2019 affordability levels (pre-COVID). BCH will team up with builders, use public lands for quick starts, and lure in private cash (including overseas and foreign money) with low interest loans and incentives. Early wins include four pilot projects announced this fall, like modular housing factories in the North that could ship units across the country.

Tied to that is the shiny new Build Communities Strong Fund, with $51 billion over ten years for infrastructure that indirectly boosts housing. That’s a big deal. This pot covers roads, water lines, and even health facilities, but a chunk goes straight to community projects that make building easier, like upgrading utilities in growing suburbs. Provinces and territories have to chip in matching funds, and in return, they promise to cut red tape, like slashing development charges on multi-unit builds. Provinces like Ontario are constantly investing in these kinds of housing-enabling infrastructure projects, so this will strongly accelerate the momentum we’re seeing across the country. Tembo applauds this initiative, it will yield long-term benefits for decades to come and takes significant financial pressure off developers and municipalities.

Another move is jacking up spending on Canada Mortgage Bonds, or CMBs. These are basically bonds backed by insured mortgages that help lenders free up cash for more loans, especially for rental projects. The annual limit jumps from $60 billion to $80 billion starting in 2026. Experts say this could unlock thousands of new rental units each year by making it cheaper for builders to borrow. It’s part of a broader $25 billion fresh injection for housing over five years, on top of $130 billion in total commitments. This spending is treated as “capital spending” under a new budgeting arrangement. That means it doesn’t hit the deficit as hard right away, giving the government wiggle room to borrow big without scaring markets. Overall, the feds are eyeing $280 billion in investments across housing, infrastructure, and more, aiming to spark $500 billion from private players. That’s a big, big gamble, and will require Canada’s big pension funds to chip in (a big if).

The budget delivers help to first time buyers, they will now get the GST wiped out on new homes worth up to $1 million. For pricier spots, like a $1.2 million condo, you pay a reduced rate on the chunk over $1 million. That could save up to $50,000 on the upfront bill, a game changer when closing costs alone can eat 2 to 4 percent of a home’s price. It’s building on the Home Buyers’ Amount tax credit, which lets you claim up to $1,500 off your federal taxes if you’re buying your first place. No more shared equity headaches either, the old First Time Home Buyer Incentive got the boot last year due to low uptake, but this simpler rebate fills the gap without strings.

The budget abolishes the Underused Housing Tax completely for 2025 onward. That was the 1 percent annual tax on empty or foreign owned second homes, which sounded good but turned into a paperwork nightmare for regular folks with a cottage gathering dust. Scrapping it cuts admin hassles and saves owners thousands in compliance fees. If you’re thinking about adding a secondary suite, like a basement apartment for rental income, the budget nods to easier access to home equity loans starting January 2025. Plus, the Canadian Mortgage Charter gets a boost, outlining how banks must offer fair renewals, like extending amortizations temporarily if life’s throwing curveballs. No more interest on deferred payments, and waived fees for those in a bind. These are all excellent reforms that are clearly designed to attract overseas investors and to make life easier for homeowners.

Will this all work? Tembo believes that execution is key. The budget claims it’ll create thousands of skilled trade jobs, especially for young Canadians, and coordinate with provinces to speed permits. Rents are already dipping 3.2 percent year over year thanks to rental incentives from earlier plans, like the Apartment Construction Loan Program, which now has $40 billion in low-cost loans committed. Immigration tweaks help too, trimming temporary residents to ease demand without slamming the brakes on growth. This is a government that has had issues with executing big policy promises. Can Carney execute better than Trudeau? Tembo hopes so.

There are excellent initiatives in the budget, but the big question is how quickly can the federal government get the economy growing, and where will the BOC take rates? Can the two manage inflation and keep it low? Housing starts will rise if the economy achieves higher rates of growth and productivity and if rates fall and are kept lower.