$45 Billion and a Dream: Federal Budget 2026's Community Housing Ambitions

By: Amelia Briggs-Morris

More than three decades after the federal government withdrew from funding new social housing development, Budget 2026 signals a renewed federal commitment to expanding Canada's affordable housing supply.

On November 5, 2026, the federal government unveiled Budget 2026, Masters of Our Destiny, setting out an ambitious housing strategy built around three pillars: eliminating homelessness, expanding non-market housing, and building a housing market that works for everyone. For the community housing sector, the first two pillars are particularly significant.

Pillar 1: Eliminating Homelessness

The Budget makes a bold declaration: homelessness is not inevitable, and Canada has the resources to eliminate it in 10 years. The Budget recognizes that getting there will require all levels of government, Indigenous partners, the private sector and the non-profit sector to work together.

To support this effort, Budget 2026 commits approximately $29 billion to a range of initiatives, including:

• A new Integrated Supports Fund: $5 billion to support projects that bring housing together with health care, mental health, addictions and other social services. Delivered through Build Canada Homes, the Fund would also support new supportive and transitional housing, the adaptation of existing buildings and the mobilization of public, private and philanthropic capital.
• New supportive and transitional housing: $10 billion in additional funding through Build Canada Homes to construct supportive and transitional housing across Canada.
• Community mental health and addictions facilities: $2 billion over two years through the Health Infrastructure Fund to develop facilities that provide mental health and addictions care.
• Renewal of homelessness programs: $6.5 billion to renew the Reaching Home initiative and Veterans Homelessness Program for an additional 10 years, supporting community-based efforts to prevent and reduce homelessness.
• Renewal of the Canada Housing Benefit: $5.6 billion to continue providing rental assistance to low-income households over the next 10 years.

The Budget recognizes what the community housing sector has long known: we cannot build our way out of homelessness through housing alone. By committing funding to integrate housing with health care, mental health, addictions and social services, the federal government correctly acknowledges that addressing homelessness requires not only providing people with a place to live, but also the supports they need to remain housed.

Pillar 2: Expanding Non-Market Housing

The Budget notes that non-market housing currently represents only approximately 4% of Canada's housing stock, just over half the Organization for Economic Co-operation and Development (OECD) average of 7% and well below the community housing sector's long-term goal of 20%. To address this, the federal government has set a formidable goal of tripling annual non-market housing starts to 24,000 homes per year over the next decade.

Central to this commitment is Build Canada Homes, which is expected to play a leading role in delivering new affordable housing.

The Budget proposes:

• $13 billion over 10 years in additional capital for Build Canada Homes, bringing its total planned capitalization to approximately $45 billion and supporting its goal of delivering 200,000 new homes over the next decade.
• At least 10% of Build Canada Homes' expanded funding envelope dedicated to Indigenous housing projects.
• Approximately $1.9 billion to make federal lands development-ready.

Perhaps most importantly, the Budget recognizes that the goal is not simply to fund more projects, but to establish a permanent housing delivery system capable of producing affordable homes at scale.

This is an important shift in approach. If Canada is to meaningfully expand its non-market housing supply, the sector needs the ability to plan and deliver housing on an ongoing basis, rather than relying on funding opportunities for individual projects.

From Commitments to Implementation

Budget 2026 gives the community housing sector plenty of reasons to be optimistic. After decades of underinvestment, the federal government is stepping up with a major commitment to non-market housing, recognizing both the scale of Canada's housing crisis and its own essential role in tackling it.

However, several important questions remain about implementation.

What does the shift from Canada Mortgage and Housing Corporation (CMHC) to Build Canada Homes mean for housing providers? The Budget places significant responsibility, and funding, in the hands of Build Canada Homes, with no new funding specifically earmarked for CMHC under these two pillars. For years, housing providers have relied on CMHC's established programs and application processes to access federal financing. Now, with much of the new investment flowing through Build Canada Homes, questions remain about how providers will reliably access this funding, what projects will qualify and what role CMHC and its existing programs will play going forward.

How will operating costs be funded? Much of the new investment is directed toward capital costs. While this is essential to getting housing built, deeply affordable and supportive housing also requires reliable operating funding. The Budget anticipates that provinces and territories will contribute to these ongoing costs, making coordination between governments critical to ensuring that projects are financially viable over the long term.

Where will the federal lands be made available? Funding to prepare federal lands for development is welcome, but the value of this initiative will depend in part on where those lands are located. Access to suitable land in communities facing the greatest housing pressures, particularly urban centers, will be important to the success of this initiative.

How do we get projects off the ground? There is also a need for accessible pre-development funding. Build Canada Homes' current application model prioritizes projects that are ready to move toward construction, but getting a project to that stage requires significant upfront investment in feasibility studies, architectural plans, engineering and other consultants. Without funding to cover these early costs, many non-profit housing providers may struggle to get projects off the ground. If the goal is to dramatically scale up non-market housing construction, we also need to invest in the capacity of the organizations expected to deliver it.

Looking Ahead

Budget 2026 sends a strong signal that the federal government recognizes the scale of Canada's housing crisis and the need for meaningful action. Its commitments to eliminating homelessness and expanding non-market housing represent a significant opportunity for the community housing sector. The challenge now will be ensuring that these investments translate into affordable homes that can be built, operated and sustained for generations to come.