Canadians are set to head to the polls this month to elect a new federal government against the backdrop of a global tariff war that continues to affect the real estate market north of the American border.
Looming U.S. threats of tariffs on Canadian goods have created uncertainty that is showing up in housing, from for-sale homes and condos to rental apartments. Real estate boards across the country reported that demand is stalled as buyers sit on the sidelines, waiting to see how the dispute will affect the economy.
Even before Prime Minister Justin Trudeau resigned and was replaced by former Brookfield Asset Management Chair Mark Carney this year, housing affordability has been a major issue across Canada. Carney called for the snap federal election to be held April 28.
"We need to tackle the housing crisis and the economic crisis brought on by President Trump's trade war," Carney said in an election speech this past week.
That said, Canada Mortgage and Housing Corp., the Crown Corporation known as CMHC that advises the federal government on policy, said the country needs an additional 3.5 million homes beyond the present pace of construction by 2030.
CMHC said there were 227,697 units, including all housing classes, started in 2024, compared to 223,513 in 2023. While the Crown corporation has said the country is capable of 400,000 starts a year, Carney upped that target to 500,000.
Months ago, it appeared an election would guarantee a majority government for the Conservative Party of Canada and its leader, Pierre Poilievre, after a decade of being out of power. But the political landscape changed dramatically after the administration of U.S. President Donald Trump implemented tariffs on Canada, and polls now indicate the Liberals could be poised for the majority under Carney.
With another group, the New Democrats, trailing in the polls that indicate they may not even get the 12 seats needed for official party status, the debate on real estate now revolves around Liberal versus Conservative policies, including real estate.
Competing housing plans
Doug Porter, chief economist with the Bank of Montreal, acknowledged while there is almost no debate in the country about the need for more housing, disagreement exists in how to accomplish the goal of building more residences.
"It plays to some of the core beliefs of the parties," Porter said in an interview with CoStar News. "The Conservatives tend to believe that market forces are the thing to rely on more heavily and not to intervene heavily whereas is often the case, the Liberals and even more the NDP, believe the government should intervene."
The Liberal Party's housing plan, or Build Canada Homes, calls for providing $25 billion in financing for builders of prefabricated homes and $10 billion in low-cost financing to companies that build affordable homes.
The party plan also pledges to halve municipal development charges for multiunit residential projects, make converting existing structures into affordable housing easier and reduce housing bureaucracy and red tape.
The party also aims to eliminate the goods and services tax, or GST, for first-time buyers of homes that cost less than $1 million.
That plan met backlash from within the real estate industry, however, for its stated intention of "acting as a developer to build affordable housing at scale including on public lands."
KingSett Capital CEO Jon Love said in a social media post that, "Canada has a world-class large-scale development community, being restrained by excess taxation and regulation. Conservatives want to unleash this powerful force; Liberals announced they want to compete."
The CEO of Canadian Apartment Properties, Canada's largest publicly traded apartment real estate investment trust, struck a similar tone. "Option 1: Government can spend billions. Becoming a developer, or Option 2. Eliminating development fees and regulation and let the experts do what they do best. I would support Option 2," Mark Kenney said.
Home sales, prices down
Uncertainty appears to be taking a bite out of the existing homes market in Canada, with the country's largest city of Toronto seeing March sales drop almost 25% from a year earlier.
The Toronto Regional Real Estate Board, or TRREB, said there were 5,011 home sales in the region in March compared to 6,519 in the same time last year. The average selling price last month was $1,093,254, down by 2.5% from March 2024, the group said.
"Given the current trade uncertainty and the upcoming federal election, many households are likely taking a wait-and-see approach to home buying," said Jason Mercer, chief information officer of TRREB, in a commentary. "If trade issues are solved or public policy choices help mitigate the impact of tariffs, home sales will likely increase. Home buyers need to feel their employment situation is solid before committing to monthly mortgage payments over the long term."
Renters are also dealing with uncertainty heading into the election. As for affordability concerns, a poll by Rentals.ca found renters listed inflation as the top driver at 44%, followed by wage stagnation at 41%, government inaction at 40% and a lack of housing supply at 36%.
BMO's Porter would not talk about which party he supports in the election but said housing "has been every bit a demand story" as much as a supply issue.
"Some pretty big steps have been taken on the demand side," said Porter, referring to cuts in immigration.
Still, he said, "Given the population surge, we still need more supply. Housing would have been the big issue if not for trade."
The Conservatives have been directly attacking Carney, saying he continues to support the housing policies of Justin Trudeau, including rewarding local gatekeepers who block homebuilding and raise housing taxes. They maintain that the Liberal Party has no plan to increase homeownership.
"This is perhaps not surprising given Brookfield's landlord status, including their growing single-family home rental business," the Conservatives said in a shot at the current prime minister's past business background.
Poilievre also released a plan called Canada First Reinvestment Tax Cut that real estate professionals are watching closely.
That plans says any person or business selling an asset would pay no capital gains tax when they reinvest the proceeds in Canada. Companies that reinvest in active Canadian businesses would also defer any capital gains tax. The break would be available on any reinvestments done until the end of 2026.
"The current capital gains tax locks up investment in old assets because selling them would force a big bill," Poilievre said in making the announcement. "Allowing reinvestments without tax will unlock billions to begin building, hiring, investing and growing immediately."
Industry wants change
Regardless, the real estate industry has shown support. NAIOP, the commercial real estate development association with chapters in Vancouver, Calgary, Edmonton and Toronto, said it wants all parties to back significant reforms to federal housing policy.
"Canadians are facing some real challenges in finding an affordable home," said Derick Fluker, chief investment officer at Wesgroup Properties and a NAIOP Vancouver chapter board member, in a statement. "We need to ramp up supply in a timely way. The real estate industry is providing our political leaders with some ideas that will significantly increase the amount of housing that is built,"
NAIOP said it wants development charges extended over the life of supported infrastructure, a reduction in planning delays and tax measures to attract capital to the real estate industry.
"Canada needs change at the national level in a range of policies and institutions if we are going to meet the needs of Canadians across Canada," said Leona Savoie, a NAIOP Toronto board member and chair of the NAIOP Canada Chapters Task Force, in a statement. "Many in the industry are frustrated with a policy environment that seems stuck in the past."
Ben Myers, president and owner of Bullpen Research & Consulting, said the election pits the two main parties against each other on real estate.
"Certainly, Carney has gone into this with the idea of the public builder, which many people in the development industry believe is a bit of a pipe dream to have the expertise to develop it, find the land, budget it and build it on time," Myers said in an interview. "The profit motive is key to delivering housing. There are things in the Carney platform that make it easier for developers, and that is great. And Poilievre has agreed" to remove federal taxes from homes valued at up to $1.3 million.