Budget Blowback: Housing Industry Warns of Job Losses, Deepening Affordability Crisis

By Debra Allen

November 05, 2025

Toronto – The federal government’s 2025 budget is facing sharp criticism from the housing industry, with a leading association warning that the plan will exacerbate the affordability crisis and potentially lead to significant job losses. The Building Industry and Land Development Association (BILD) has voiced strong concerns that the budget fails to address the root causes of the housing shortage and offers insufficient support for a sector already grappling with rising costs and dwindling supply.

BILD estimates that the current trajectory, coupled with the budgetary measures, could lead to 100,000 job losses in the construction sector. While the federal government touts investments in affordable housing initiatives, critics argue these are simply drops in the bucket compared to the scale of the crisis.

“The budget misses a crucial opportunity to meaningfully address the housing supply shortage,” says a spokesperson for BILD. “While any investment in housing is welcome, these measures are insufficient to offset the challenges facing builders and developers, and ultimately, Canadians seeking affordable homes.”

Sales Slump & Rising Concerns

The concerns come amidst a noticeable slowdown in new home sales across several major Canadian cities. Data from the Canadian Real Estate Association (CREA) reveals a consistent decline in new listings and sales over the past quarter, with inventory levels remaining stubbornly low. Toronto, Vancouver, Calgary, and Montreal have all experienced significant drops, highlighting the nationwide nature of the problem.

“We're seeing a clear slowdown in demand, but it’s not driven by affordability alone,” explains a market analyst. “Rising interest rates, construction costs, and land prices are all contributing factors. The budget doesn’t adequately address these core issues.”

Industry sources suggest that several factors contribute to the slowdown, including a lack of skilled labor, lengthy permitting processes, and cumbersome regulations. These challenges add to the cost of building new homes, making them increasingly inaccessible to average Canadians.

Development Charges & The Municipal Divide

One of the key points of contention revolves around Development Charges (DCs) – fees levied by municipalities on developers to fund infrastructure projects. While DCs are intended to ensure that growth doesn't overburden existing infrastructure, critics argue that they have become excessively high, adding significantly to the cost of new housing.

“DCs in some cities are now so high that they represent a substantial portion of the total cost of a new home,” says an industry insider. “This makes it even more difficult to build affordable housing, and it discourages developers from undertaking new projects.”

BILD is calling on the federal government to work with municipalities to reform DC policies and reduce the financial burden on developers. They propose incentives for municipalities that reduce DCs and streamline the approval process for new housing projects. However, many municipalities are hesitant to lower DCs, citing concerns about their ability to fund essential infrastructure upgrades.

“We understand the need for infrastructure funding, but there has to be a balance,” says a representative from the Federation of Canadian Municipalities. “We can’t expect municipalities to shoulder the entire cost of growth. The federal government needs to provide more funding for infrastructure projects.”

The Missing MURB Incentive

Another area of concern is the omission of the promised Multi-Unit Residential Building (MURB) tax incentive program. Announced in previous budgets, the program was intended to encourage the construction of rental housing, addressing a critical shortage of affordable rental units. However, the details of the program remain unclear, and no funding has been allocated in the 2025 budget.

“The lack of clarity around the MURB incentive is frustrating,” says a developer specializing in rental housing. “We were hoping to see concrete details and funding allocations in this budget, but it seems like the program has been shelved indefinitely.”

Industry analysts suggest that the government may be reconsidering the program due to concerns about its potential cost and effectiveness. However, critics argue that the lack of incentives for rental housing will exacerbate the already dire shortage of affordable rental units.

A Call for Collaboration

BILD and other industry stakeholders are urging the federal government to engage in meaningful dialogue with the construction sector and municipalities to develop a comprehensive and effective housing strategy. They argue that a collaborative approach is essential to address the complex challenges facing the housing market.

“We need a long-term vision for housing, not just piecemeal solutions,” says a spokesperson for BILD. “The federal government needs to work with all stakeholders to create a stable and predictable environment for the construction sector, and to ensure that all Canadians have access to affordable housing.”

While the 2025 federal budget includes some investments in affordable housing, many in the industry believe it falls short of addressing the scale of the crisis. With housing affordability reaching record lows and construction activity slowing down, the pressure is on Ottawa to take bolder action before the situation deteriorates further. The debate over the best path forward is likely to continue, as stakeholders grapple with the complex challenges facing the Canadian housing market.

“This isn’t just an economic issue, it’s a social one,” says a housing advocate. “Everyone deserves access to safe, affordable housing, and we need a government that is willing to prioritize that.”