Fifteen-plus years of BC mortgage experience, distilled into practical writing on buying, renewing, refinancing, and building wealth through real estate.
Canada's $1.7 Trillion Housing Fix Isn't a Burden, It's the Only Way Out
Desjardins published the $1.7 trillion figure in 2026 and nobody in Ottawa flinched. The number represents what it would take to restore housing affordability to mid-2000s levels over the next decade. That's not new stock to keep up with population growth. That's correcting the hole we've dug.
The reflex response, the one you'll hear from columnists and backbenchers, is that we can't afford it. That the number is unsustainable. That directing this much capital toward housing will crowd out productive investment and keep interest rates elevated for years.
All true. And all beside the point.
The Alternative Is Already Costing More
The question isn't whether we can afford $1.7 trillion. The question is what we're paying to avoid it.
Housing costs already claim 40-50% of gross income for renters in Toronto and Vancouver. Households earning $120,000 can't qualify for starter homes in suburban markets that were solidly middle-class five years ago. A 32-year-old engineer in Kitchener making $95,000 is being told her best path to ownership is inheriting a down payment or moving to Sudbury.
That's not a policy outcome. That's a structural exclusion. And it has a price tag we're already paying in delayed household formation, suppressed birth rates, and the erosion of the professional class outside the investor/homeowner divide. You can call that a social cost if you want to be polite about it. It's also an economic cost. Labour mobility has collapsed because people can't afford to move where the jobs are. Startups get strangled because half the salary offer disappears into rent. The most productive workers in their late twenties and early thirties are making financial decisions as if they're managing a crisis, because they are.
The Productivity Objection Runs Backward
The standard critique of the $1.7 trillion plan is that it diverts capital from the machinery, R&D, and infrastructure that actually drive GDP per hour worked. Housing is a mostly non-productive asset. Building 3.5 million units to fix a supply shortfall doesn't make the economy more efficient.
Correct on the mechanics. Wrong on the conclusion.
The current equilibrium, where housing takes 35-50% of household income instead of the historical 25-30%, is already crowding out productive investment. Households that would have been saving, investing, or spending on consumption that drives business formation are instead funnelling every marginal dollar into shelter. The engineers and accountants and project managers who should be starting companies or taking risks on new ventures are instead locked into salary jobs because they need the mortgage pre-approval.
Building our way to lower price-to-income ratios isn't a detour from productivity. It's a prerequisite. You can't run a high-growth economy when the professional class is house-poor at $110,000 household income.
The Interest Rate Problem Is Real but Backward-Looking
Yes, deploying $1.7 trillion in residential construction over ten years will keep the neutral rate higher than the 2010s. Credit demand at that scale has to show up somewhere.
But the "low-for-long" era is already over. We're not comparing the $1.7 trillion path to 2015 monetary conditions. We're comparing it to a world where housing already consumes an outsized share of Canadian wealth and the Bank of Canada has spent three years trying to cool an economy structurally overheated by shelter costs. The alternative to building isn't low rates. The alternative is sustained high rates used as a blunt instrument to suppress demand we can't meet with supply.
The $1.7 trillion number is large because the problem is structural. CMHC estimates we need 3.5 million additional units by 2030 beyond what's currently projected. That's not a wish list. That's the gap between what we're building and what restores affordability to a level where a two-income household earning the median can buy a home in the city where they work.
You can reject the $1.7 trillion. But you can't reject the gap. And every year we defer the capital, the number gets bigger.
Desjardins published the $1.7 trillion figure in 2026 and nobody in Ottawa flinched. The number represents what it would take to restore housing affordability to mid-2000s levels over the next decade. That's not new stock to keep up with population growth. That's correcting the hole we've dug.
The reflex response, the one you'll hear from columnists and backbenchers, is that we can't afford it. That the number is unsustainable. That directing this much capital toward housing will crowd out productive investment and keep interest rates elevated for years.
All true. And all beside the point.
The Alternative Is Already Costing More
The question isn't whether we can afford $1.7 trillion. The question is what we're paying to avoid it.
Housing costs already claim 40-50% of gross income for renters in Toronto and Vancouver. Households earning $120,000 can't qualify for starter homes in suburban markets that were solidly middle-class five years ago. A 32-year-old engineer in Kitchener making $95,000 is being told her best path to ownership is inheriting a down payment or moving to Sudbury.
That's not a policy outcome. That's a structural exclusion. And it has a price tag we're already paying in delayed household formation, suppressed birth rates, and the erosion of the professional class outside the investor/homeowner divide. You can call that a social cost if you want to be polite about it. It's also an economic cost. Labour mobility has collapsed because people can't afford to move where the jobs are. Startups get strangled because half the salary offer disappears into rent. The most productive workers in their late twenties and early thirties are making financial decisions as if they're managing a crisis, because they are.
The Productivity Objection Runs Backward
The standard critique of the $1.7 trillion plan is that it diverts capital from the machinery, R&D, and infrastructure that actually drive GDP per hour worked. Housing is a mostly non-productive asset. Building 3.5 million units to fix a supply shortfall doesn't make the economy more efficient.
Correct on the mechanics. Wrong on the conclusion.
The current equilibrium, where housing takes 35-50% of household income instead of the historical 25-30%, is already crowding out productive investment. Households that would have been saving, investing, or spending on consumption that drives business formation are instead funnelling every marginal dollar into shelter. The engineers and accountants and project managers who should be starting companies or taking risks on new ventures are instead locked into salary jobs because they need the mortgage pre-approval.
Building our way to lower price-to-income ratios isn't a detour from productivity. It's a prerequisite. You can't run a high-growth economy when the professional class is house-poor at $110,000 household income.
The Interest Rate Problem Is Real but Backward-Looking
Yes, deploying $1.7 trillion in residential construction over ten years will keep the neutral rate higher than the 2010s. Credit demand at that scale has to show up somewhere.
But the "low-for-long" era is already over. We're not comparing the $1.7 trillion path to 2015 monetary conditions. We're comparing it to a world where housing already consumes an outsized share of Canadian wealth and the Bank of Canada has spent three years trying to cool an economy structurally overheated by shelter costs. The alternative to building isn't low rates. The alternative is sustained high rates used as a blunt instrument to suppress demand we can't meet with supply.
The $1.7 trillion number is large because the problem is structural. CMHC estimates we need 3.5 million additional units by 2030 beyond what's currently projected. That's not a wish list. That's the gap between what we're building and what restores affordability to a level where a two-income household earning the median can buy a home in the city where they work.
You can reject the $1.7 trillion. But you can't reject the gap. And every year we defer the capital, the number gets bigger.
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