Carney government’s housing plan poses major risks to taxpayers

A trade war, Trump’s threats to Canada’s sovereignty, and global economic volatility loomed large in the recent federal election. Yet many voters remained focused on an issue much closer to home: housing affordability.

In 2023, under Justin Trudeau, Canada added a record high 1.2 million new residents—more than double the previous record in 2019—and another 951,000 new residents last year. All told, Canada’s population has grown by about 3 million people since 2022—roughly matching the total population increase during the entire decade of the 1990s. Not surprisingly, homebuilding has failed to keep pace. In fact, housing construction rates have barely exceeded 1970s levels, even though the population has more than tripled since then. The result—a historic surge in housing costs.

On the campaign trail, the Liberals set an immigration target of about 400,000 per year, which is lower than the recent record highs but still high by historical standards, and tabled a plan they claim will double Canada’s residential construction rate to 500,000 new homes per year within a decade. But is it a good plan? And can the Liberals deliver it?

First, the good news. To help boost private homebuilding, the Carney government promised to introduce tax incentives including a rental building allowance, which would help reduce the tax bill on new multi-unit rental buildings, and a GST exemption for some first-time homebuyers, which may reduce the cost of newly-built homes and spur more homebuilding. The government also plans to expand the “Housing Accelerator Fund,” which offers federal dollars to municipalities in exchange for more flexible municipal building rules, and modernize the federal building code, which could shorten construction timelines. While much will depend on execution, these policies rightly aim to make it faster, cheaper and more attractive for the private sector to build homes.

Now, the bad news. The Carney government plans to create a new federal entity called Build Canada Homes (BCH) to “get the government back in the business of building.” According to Carney’s vision, the BCH will act “as a developer to build affordable housing” and provide more than “$25 billion in financing” to homebuilders and “$10 billion in low-cost financing and capital” for homebuilders to build “affordable” homes.

We’ve seen a similar movie before. In 2017, the Trudeau government created the Canada Infrastructure Bank (CIB) to invest in the “next generation of infrastructure Canadians need.” Since then, the CIB has approved approximately $13.2 billion in investments across 76 projects (as of July 2024), yet only two CIB-funded projects had been completed, prompting the authors of a multi-party House of Commons committee report to recommend abolishing the CIB.

The bureaucrats who will run the BCH won’t have the private sector’s expertise in housing development, nor the same incentives to keep costs down. BCH’s mandate is already muddled by competing goals—it must deliver “affordable” homes while simultaneously prioritizing certain building materials (e.g. Canadian softwood lumber), which could increase building costs.

The plan for BCH’s multi-billion-dollar loan portfolio includes significant “low cost” (that is, taxpayer subsidized) financing, a huge bet on prefabricated homebuilding, and no certainty about who will be on the hook for any failed projects—combined, this represents a major increase in costs and risks for taxpayers at a time when they already shoulder rising federal deficits and debt.

There’s also a real risk that BCH will simply divert limited investment dollars and construction resources away from private homebuilding—where projects respond to the needs of Canadian homebuyers and renters—and toward government-backed housing projects shaped by political goals. Instead of boosting overall homebuilding, BCH may simply reshuffle limited resources. And, as noted by the government, there’s a severe shortage of skilled construction labour in Canada.

It’s hard to see how Carney’s housing plan would double the pace of homebuilding in Canada—a very ambitious target that would require not only prudent housing policies but greater domestic savings, an implausibly large expansion in the construction workforce (which grew by only 18.4 per cent over the last decade), and the political fortitude to endure vocal opposition to housing development in certain neighbourhoods and on public lands.

Canada’s housing crisis will benefit from federal leadership—but not federal overreach. Rather than overpromising what it can’t deliver, the Carney government should refocus on what it’s best positioned to do: reform incentives, streamline regulations, and nudge municipalities and provinces to remove constraints on homebuilding. Trying to also act as a housing developer and lender is a far riskier approach.

Jake Fuss

Director, Fiscal Studies, Fraser Institute

Austin Thompson

Senior Policy Analyst, Fraser Institute

Related Topics:#FraserInstitute #JakeFuss AustinThompson CanadaHousingSHortage CarneyHousingPlan feature

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Long waits for health care hit Canadians in their pocketbooks

Published on June 13, 2025

Todayville

From the Fraser Institute

By Mackenzie Moir

Canadians continue to endure long wait times for health care. And while waiting for care can obviously be detrimental to your health and wellbeing, it can also hurt your pocketbook.

In 2024, the latest year of available data, the median wait—from referral by a family doctor to treatment by a specialist—was 30 weeks (including 15 weeks waiting for treatment after seeing a specialist). And last year, an estimated 1.5 million Canadians were waiting for care.

It’s no wonder Canadians are frustrated with the current state of health care.

Again, long waits for care adversely impact patients in many different ways including physical pain, psychological distress and worsened treatment outcomes as lengthy waits can make the treatment of some problems more difficult. There’s also a less-talked about consequence—the impact of health-care waits on the ability of patients to participate in day-to-day life, work and earn a living.

According to a recent study published by the Fraser Institute, wait times for non-emergency surgery cost Canadian patients $5.2 billion in lost wages in 2024. That’s about $3,300 for each of the 1.5 million patients waiting for care. Crucially, this estimate only considers time at work. After also accounting for free time outside of work, the cost increases to $15.9 billion or more than $10,200 per person.

Of course, some advocates of the health-care status quo argue that long waits for care remain a necessary trade-off to ensure all Canadians receive universal health-care coverage. But the experience of many high-income countries with universal health care shows the opposite.

Despite Canada ranking among the highest spenders (4th of 31 countries) on health care (as a percentage of its economy) among other developed countries with universal health care, we consistently rank among the bottom for the number of doctors, hospital beds, MRIs and CT scanners. Canada also has one of the worst records on access to timely health care.

So what do these other countries do differently than Canada? In short, they embrace the private sector as a partner in providing universal care.

Australia, for instance, spends less on health care (again, as a percentage of its economy) than Canada, yet the percentage of patients in Australia (33.1 per cent) who report waiting more than two months for non-emergency surgery was much higher in Canada (58.3 per cent). Unlike in Canada, Australian patients can choose to receive non-emergency surgery in either a private or public hospital. In 2021/22, 58.6 per cent of non-emergency surgeries in Australia were performed in private hospitals.

But we don’t need to look abroad for evidence that the private sector can help reduce wait times by delivering publicly-funded care. From 2010 to 2014, the Saskatchewan government, among other policies, contracted out publicly-funded surgeries to private clinics and lowered the province’s median wait time from one of the longest in the country (26.5 weeks in 2010) to one of the shortest (14.2 weeks in 2014). The initiative also reduced the average cost of procedures by 26 per cent.

Canadians are waiting longer than ever for health care, and the economic costs of these waits have never been higher. Until policymakers have the courage to enact genuine reform, based in part on more successful universal health-care systems, this status quo will continue to cost Canadian patients.

Mackenzie Moir

Senior Policy Analyst, Fraser Institute

Business

84% of Swiss hospitals and 60% of hospitalizations are in private facilities, and they face much lower wait times

Published on June 12, 2025

Todayville

From the Fraser Institute

By Yanick Labrie

If Canada reformed to emulate Switzerland’s approach to universal health care, including its much greater use of private sector involvement, the country would deliver far better results to patients and reduce wait times, finds a new study published today by the Fraser Institute, an independent, non-partisan Canadian policy think-tank.

“The bane of Canadian health care is lack of access to timely care, so it’s critical to look to countries like Switzerland with more successful universal health care,” said Yanick Labrie, senior fellow at the Fraser Institute and author of Integrating Private Health Care Into Canada’s Public System: What We Can Learn from Switzerland. The study highlights how Switzerland successfully integrates the private sector into their universal health-care system, which consistently outperforms Canada on most health-care metrics, including wait times.

For example, in 2022, the percentage of patients who waited less than two months for a specialist appointment was 85.3 per cent in Switzerland compared to just 48.3 per cent in Canada.

In Switzerland, 84.2 per cent of all hospitals are private (either for-profit or not-for profit) institutions, and the country’s private hospitals provide 60.2 per cent of all hospitalizations, 60.9 per cent of all births, and 67.1 per cent of all operating rooms.

Crucially, Swiss patients can obtain treatment at the hospital of their choice, whether located inside or outside their geographic location, and hospitals cannot discriminate against patients, based on the care required.

“Switzerland shows that a universal health-care system can reconcile efficiency and equity–all while being more accessible and responsive to patients’ needs and preferences,” Labrie said.

“Based on the success of the Swiss model, provinces can make these reforms now and help improve Canadian health care.”

Integrating Private Health Care into Canada’s Public System: What We Can Learn from Switzerland

Access to timely care remains the Achilles’ heel of Canada’s health systems. To reduce wait times, some provinces have partnered with private clinics for publicly funded surgeries—a strategy that has proven effective, but continues to spark debate in Canada.
This study explores how Switzerland successfully integrates private health care into a universal public system and considers what Canada can learn from this model.
In Switzerland, universal coverage is delivered through a system of managed competition among 44 non-profit private insurers, while decentralized governance allows each of the 26 cantons to coordinate and oversee hospital services in ways that reflect local needs and priorities.
Nearly two-thirds of Swiss hospitals are for-profit institutions; they provide roughly half of all hospitalizations, births, and hospital beds across the country.
All hospitals are treated equally—regardless of legal status—and funded through the same activity-based model, implemented nationwide in 2012.
The reform led to a significant increase in the number of cases treated without a corresponding rise in expenditures per case, suggesting improved efficiency, better use of resources, and expanded access to hospital care.
The average length of hospital stay steadily decreased over time and now stands at 4.87 days in for-profit hospitals versus 5.53 days in public ones, indicating faster patient turnover and more streamlined care pathways.
Hospital-acquired infection rates are significantly lower in private hospitals (2.7%) than in public hospitals (6.2%), a key indicator of care quality.
Case-mix severity is as high or higher in private hospitals, countering the notion that they only take on simpler or less risky cases.
Patient satisfaction is slightly higher in private hospitals (4.28/5) than in public ones (4.17/5), reflecting strong user experience across multiple dimensions.
Canada could benefit from regulated competition between public and private providers and activity-based funding, without breaching the Canada Health Act.