Budget 2025 is framed as a “generational” plan to rebuild Canada’s economy, a theme the Finance Minister invoked no less than 25 times in his speech to emphasize the scale and long-term nature of the government’s investments in housing, infrastructure, and productivity.
The budget includes a total of $450.6 billion in capital spending over five years, alongside a projected $78.3 billion deficit in 2025-26, as the government reclassifies major outlays as long-term investments rather than annual program costs. On an annual basis, capital spending is expected to increase from $32 billion in 2024-25 to nearly $60 billion by 2029-30.
The government is committing about $115 billion in new infrastructure spending over the next five years as part of a broader capital investment plan projected at nearly $1 trillion. To streamline programs, Ottawa said funding will be realigned to better support regional needs. Budget 2025 launches the new Build Communities Strong Fund, valued at $51 billion over 10 years, to provide record infrastructure funding to provinces, territories and municipalities while relying on their expertise to decide how it’s allocated.
Notably absent from the budget was any reference or update to a Canada Revenue Agency-enabled income verification system, a tool the previous Liberal government had committed to exploring to help prevent mortgage fraud and improve underwriting standards across the financial sector. The only development since then was the release of a CRA report that supported industry calls for such a measure.
Budget reinforces existing housing strategy
Housing remains a key pillar of the generational vision of Budget 2025, with $25 billion in new measures and about $130 billion in total federal housing commitments over five years, including $13 billion for the government’s flagship Build Canada Homes initiative.
Most of this funding is directed through expanded or consolidated programs under the new framework, which brings together initiatives such as the Housing Accelerator Fund, Apartment Construction Loan Program, and federal lands and office conversion programs to better coordinate financing and accelerate construction nationwide.
“Canada faces a steep housing supply gap that threatens affordability, opportunity, and the ability for Canadians to build their lives here at home,” said Finance Minister François-Philippe Champagne. He described Build Canada Homes as “the most ambitious housing plan since the Second World War,” and one that will “build at a speed and scale not seen in generations,” aiming to double the pace of construction over the next decade.
Overall, Budget 2025 introduces few new housing programs beyond those previously announced by the federal government. Most of the housing measures, such as Build Canada Homes, the elimination of the GST on new homes for first-time buyers, and other programs, build on existing commitments from Budget 2024 and subsequent government announcements.
Mortgage Professionals Canada said it welcomes the federal government’s continued focus on housing and affordability measures, particularly the previously announced removal of the GST on new homes for first-time buyers, which CEO and President Lauren van den Berg called “a significant measure that will help unlock affordability and open the door to homeownership for more Canadians.”
Van den Berg added that while MPC supports initiatives such as the National Anti-Fraud Strategy and creation of a Financial Crimes Agency, it had hoped to see renewed progress on a CRA-enabled income verification system, which she called “a key solution to the fight against money laundering and fraud in the real estate sector.”
Housing measures at a glance
- Formal launch of Build Canada Homes: Described by the government as its flagship housing initiative in Budget 2025, though it represents more of a structural shift than a brand-new program. As noted above, it’s backed by $13 billion over five years and establishes a single federal agency to coordinate housing delivery and financing across departments, consolidating programs such as Canada Builds, the Housing Accelerator Fund and federal-lands initiatives.
Under the new capital-budgeting framework, the government says Build Canada Homes will have greater flexibility to finance projects over multiple years and attract private and institutional investment. The program also places new emphasis on modular and industrialized construction methods to reduce costs and timelines—up to 50% in some cases—and a goal to lower emissions by approximately 20% during construction
“Build Canada Homes will catalyze the creation of an entirely new Canadian housing industry that uses modern methods of construction to boost productivity sustainably and at scale,” the budget reads, adding the program will “deploy capital, create demand, and harness innovative housing technologies to build faster and more sustainably, 365 days a year.”
- GST exemption for first-time buyers of new homes. The budget confirms the federal government’s plan to remove the GST on new homes purchased by first-time buyers with a value of up to $1 million and to reduce the GST for homes priced between $1 million and $1.5 million. The measure originally announced on May 27 of this year. The proposal is currently before Parliament as part of Bill C-4 and is expected to lower the total cost of a qualifying $500,000 home by about 5%, or roughly $25,000, helping more first-time buyers enter the market.
The exemption applies only to newly constructed homes and aims to stimulate supply in the entry-level segment. However, some mortgage industry stakeholders had hoped the policy would go further by extending the GST exemption to all purchases for first-time buyers.
- Canada Mortgage Bonds (CMB) limit increases to $80 billion. The government is following through on its phased plan to expand the CMB program, raising the annual issuance limit to $80 billion, up from $60 billion. The program’s cap was first increased in September 2023, when then-Finance Minister Chrystia Freeland raised the limit from $40 billion and committed to an additional $20 billion in annual capacity to support multi-unit rental housing insured by CMHC.
The expanded issuance is aimed at strengthening mortgage-market liquidity and reducing borrowing costs for lenders and developers. Eligible multi-unit rental projects must have at least five units and can include apartment buildings, student housing, or seniors’ residences.
The government added that it will maintain the current pace of its purchases of
CMBs of up to $30 billion annually.
- Indigenous housing commitments. Budget 2025 does not launch any new Indigenous housing programs but expands existing commitments. It confirms $2.8 billion in additional funding for urban, rural and northern Indigenous housing, part of efforts to address what the government calls “acute” housing needs for First Nations, Inuit and Métis communities. Build Canada Homes will work with Indigenous leadership to align priorities and support community-led delivery. For comparison, Budget 2024 allocated about $918 million over five years to Indigenous housing and infrastructure.
To be discontinued / eliminated
- Canada Secondary Suite Loan Program: The government confirmed it won’t proceed with the Canada Secondary Suite Loan Program announced in Budget 2024 with an original pledge of $409.6 million over four years.
The program was intended to offer low-interest loans of up to $40,000 to homeowners building basement or laneway suites. The cancellation follows plans announced in late 2024 to expand the program to $80,000 loans at 2% over 15 years, aimed at helping homeowners finance secondary units and boost rental supply.
The government says CMHC is ending the initiative as part of efforts to achieve 15% savings over three years “by winding down programs that don’t directly add housing supply or target Canadians in greatest need.” It also cited potential overlap with the insured mortgage rule changes introduced in January 2025.
- Underused Housing Tax to be eliminated: The government confirmed its plan to repeal the Underused Housing Tax (UHT), which was introduced in 2022 to discourage foreign ownership of vacant or underutilized residential properties. The 1% annual tax applied mainly to non-resident, non-Canadian owners, though many domestic property owners—such as small corporations and trusts—were also required to file returns, often unintentionally facing penalties.
The government says eliminating the UHT will reduce administrative burden and uncertainty for Canadian property owners. The move comes alongside other measures to curb speculation and improve housing supply, including the federal foreign buyer ban—extended to 2027—and various municipal and provincial vacant home taxes.
- Canada Greener Homes Grant too be discontinued: The government will discontinue the Canada Greener Homes Grant as part of its efforts to streamline and refocus housing-related programming under Natural Resources Canada.
The program, which provided grants of up to $5,000 for eligible energy-efficiency upgrades such as heat pumps, insulation, and windows, is being wound down alongside several other NRCan initiatives. The separate Canada Greener Homes Loan program has also been closed to new applicants.
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budget budget 2025 Build Canada Homes CMB program François-Philippe Champagne GST on homes indigenous Lauren van den Berg Mark Carney mortgage professionals canada secondary suite incentive program
Last modified: November 4, 2025