CMHC Forecast Shows Housing Starts Declining Further

OTTAWA — As Canadians contend with rising rents and unattainable home prices, newly minted Prime Minister Mark Carney is facing growing pressure over a sharp decline in housing starts — despite sweeping campaign promises to double construction nationwide.

In the spring federal election, Carney staked much of his campaign on tackling the housing crisis, declaring his plan would be “the most ambitious housing strategy since the Second World War.” His pledge aimed to double the pace of housing construction to nearly 500,000 homes per year to confront what experts had long called a supply and affordability emergency.

But new figures from the Canada Mortgage and Housing Corporation (CMHC) show a worsening outlook:

• Actual housing starts in 2024 stood at 245,367

• CMHC now forecasts starts could decline to 224,948 in 2026, and to just 212,550 in 2027

• In Toronto, one of Canada’s most pressured housing markets, starts could plunge to 23,000 by 2027, down from 37,718 in 2024

Liberal Government Promised Ambitious Housing Plan

That’s a far cry from Carney’s target of 500,000 units per year, prompting fierce criticism from Conservative MPs, who accuse the Liberals of failing to address systemic barriers to building — and worse, of contributing to the crisis.

Conservative Claims: Fact Check

Claim: “Housing starts are lower under Carney than under Trudeau.”
✅ True — with context.
Housing starts began declining during Trudeau’s final years, with the market hit hard by rising interest rates, labour shortages, and inflation in construction materials. Under Carney, the decline appears to have accelerated, though broader economic factors — including tightening monetary policy by the Bank of Canada — remain influential.

Claim: “Carney promised 500,000 homes per year but is delivering less than half.”
✅ Accurate.
The CMHC’s 2027 forecast of 212,550 starts is less than half of the 500,000 promised, though that figure was presented as an aspirational target contingent on regulatory cooperation from provinces and municipalities.

Claim: “Conservatives will fix the crisis by cutting immigration.”
🟡 Misleading.
Reducing immigration might ease housing demand in the short term, but many economists warn it could hurt construction capacity long-term, since the building trades rely heavily on newcomer labour. Meanwhile, the Conservative plan to speed up permitting and reduce taxes on builders and buyers aligns with expert recommendations to reduce bottlenecks.

What This Means for Thunder Bay

For mid-sized cities like Thunder Bay, the situation poses both risks and opportunities. While home prices here remain more stable than in Toronto or Vancouver, a national construction slowdown could:

• Delay the delivery of affordable or multi-family housing

• Increase pressure on local planning offices as provincial mandates accelerate approvals

• Impact labour availability as tradespeople concentrate on larger urban projects

Thunder Bay’s housing strategy may need to lean on local incentives and land-use reform to keep development on track amid national headwinds.

Final Considerations

Carney’s ambitious promises set a high bar, and his government now faces a very steep climb to meet even modest targets.

While opposition attacks carry valid critiques, the Conservatives can be accused that they are oversimplifying a complex crisis shaped by decades of underbuilding, policy inertia, and economic shifts.

For Canadians — especially young people and families in Northern Ontario — real solutions can’t come fast enough.