Canada will need to build 3.2 million new homes over the next decade to close the housing gap, according to a new report from the Parliamentary Budget Officer (PBO). Current construction trends, however, suggest the country is falling short of that goal.
What the Report Says
The PBO projects that homebuilding activity will rise in the short term but eventually taper back down to historical levels. On average, Canada is expected to complete about 227,000 new homes per year over the next ten years.
That pace would deliver around 2.5 million homes total — significantly below the 3.2 million units the PBO says are required to balance supply with demand.
Immigration & Household Formation
Another key factor in the outlook is immigration. After the federal government reduced its immigration targets, the PBO forecasts a sharp decline in the number of new households being formed.
While fewer households may ease immediate pressure on the market, the gap between what is being built and what is actually needed could still worsen affordability challenges in the years ahead.
Vacancy Rates & Affordability
The report notes that a combination of increased housing construction and slower population growth should help correct Canada’s historically low vacancy rates. Tight rental markets have been a major driver of rising home prices and affordability issues across the country.
Still, the projected shortfall of nearly 700,000 homes underscores the scale of the housing crisis, and the difficulty of meeting national targets.
The Bottom Line
The PBO’s analysis makes it clear: even with more housing starts in the near term, Canada remains on track to fall short of the number of homes needed to close the supply gap. Without significant policy changes or a boost in long-term construction activity, the affordability crisis may continue to put pressure on households nationwide.
Canada Housing Market 
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