Governments are not real estate developers, and Canada should take note of the failure of New Zealand’s cancelled program, highlights a new MEI publication.

“The prospect of new homes is great, but execution is what matters,” says Renaud Brossard, vice president of Communications at the MEI and contributor to the report. “New Zealand’s government also thought more government intervention was the solution, but after seven years, its project had little to show for it.”

During the federal election, Prime Minister Mark Carney promised to establish a new Crown corporation, Build Canada Homes, to act as a developer of affordable housing. His plan includes $25 billion to finance prefabricated homes and an additional $10 billion in low-cost financing for developers building affordable homes.

This idea is not novel. In 2018, the New Zealand government launched the KiwiBuild program to address a lack of affordable housing. Starting with a budget of $1.7 billion, the project aimed to build 100,000 affordable homes by 2028.

In its first year, KiwiBuild successfully completed 49 units, a far cry from the 1,000-home target for that year. Experts estimated that at its initial rate, it would take the government 436 years to reach the 100,000-home target.

By the end of 2024, just 2,389 homes had been built. The program, which was abandoned in October 2024, has achieved barely 3 per cent of its goal, when including units still under construction.

One obstacle for KiwiBuild was how its target was set. The 100,000-home objective was developed with no rigorous process and no consideration for the availability of construction labour, leading to an overestimation of the program’s capabilities.

“What New Zealand’s government-backed home-building program shows is that building homes simply isn’t the government’s expertise,” said Mr. Brossard. “Once again, the source of the problem isn’t too little government intervention; it’s too much.”

According to the Canadian Mortgage and Housing Corporation, Canada needs an additional 4.8 million homes to restore affordability levels. This would entail building between 430,000 to 480,000 new units annually. Figures on Canada’s housing starts show that we are currently not on track to meet this goal.

The MEI points to high development charges and long permitting delays as key impediments to accelerating the pace of construction.

Between 2020 and 2022 alone, development charges rose by 33 per cent across Canada. In Toronto, these charges now account for more than 25 per cent of the total cost of a home.

Canada also ranks well behind most OECD countries on the time it takes to obtain a construction permit.

“KiwiBuild shows us the limitations of a government-led approach,” said Mr. Brossard. “Instead of creating a whole new bureaucracy, the government should focus on creating a regulatory environment that allows developers to build the housing Canadians need.”

The MEI viewpoint is available here.

* * *

The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

News release from Red Deer Polytechnic (RDP)

Red Deer Polytechnic Sells Welikoklad Event Centre

Red Deer Polytechnic (RDP) has sold the Welikoklad Event Centre in downtown Red Deer to a new owner who has plans to revitalize the facility as a movie theatre. RDP purchased the Welikoklad Event Centre in 2012. For many years, the Centre served as a valuable learning space for students in a variety of programming, including arts and business. The facility also served as a community hub, where RDP hosted a variety of events for different organizations. With the evolution of time, and RDP’s mix of industry-relevant arts and business programs transitioning back to main campus, the Welikoklad Event Centre no longer serves the same purpose for the post- secondary institution as it once did.

“As we’ve reviewed our future strategic plans relating to program growth and facility usage, to best serve our students, industry partners and community members, we are confident we can meet everyone’s needs at our other campuses,” says Jim Brinkhurst, Vice President, Finance and Administration & Chief Financial Officer, Red Deer Polytechnic. “We feel that now is a good time for the institution to sell this facility and we are pleased to see it repurposed for other community uses that will continue to serve Red Deer and downtown well.”

The Welikoklad Event Centre has been purchased by local business owner, Bill Ramji. He owns Carnival Cinemas, currently located in the Capstone neighbourhood. Future development is planned on the current site of this movie theatre and community gathering space. Ramji is excited to revitalize the theatre’s nearly three decades of history in Red Deer at its new location (which will be renovated before opening) in the heart of downtown.

“Carnival Cinemas is proud to announce the acquisition of the Welikoklad Event Centre from Red Deer Polytechnic, marking an exciting new chapter for this venue and the downtown arts community,” says Bill Ramji, Carnival Cinemas owner. “With this acquisition, Carnival Cinemas reaffirms its commitment to bringing the best value in movies to central Alberta while expanding its focus on supporting local theatre and the performing arts. The Welikoklad Event Centre, previously The Uptown Theatre, was a hub for film lovers and creative voices, and Carnival is eager to build on that legacy.”

Ramji continues, “We’re excited to move forward as Carnival Cinemas and Event Centre and our goal is to continue providing high-quality movie experiences, while also working hand-in-hand with local artists, performers, and theatre groups to enrich downtown Red Deer’s cultural landscape. Carnival Cinemas & Event Centre looks forward to collaborating with the arts community and the broader public to ensure the space remains a vibrant and inclusive gathering place for film and theatre alike.”

RDP will continue to have a presence in downtown Red Deer, with their downtown campus located in the Millennium Centre. The downtown RDP campus is home to RDP’s Continuing Education and Corporate Training programs.