Why Ontario's 1.5M new homes target looks increasingly out of reach

Ontario budget forecasts fewer living accommodations starts in 2025

The young Ontario budget foresees a slow up step for housing construction over the next three years, making it increasingly unlikely that Premier Doug Ford's government will achieve its target of 1.5 million new homes by 2031.

The budget forecasts 71,800 housing starts in 2025, followed by 74,800 next year and 82,500 in 2027.

There have been 260,000 actual housing starts in the three years since the target was set. So if you add in the projections for 2025 and 2026, the province would only be about one-quarter of the way toward its goal at the end of next year, the halfway point of the target timeline.

To put it another way: construction in the final five years would need to average about 218,000 homes annually, more than double the pace of the first five years.

"The government should acknowledge that it's clearly not going to make that target," said Eric Lombardi, president of More Neighbours Toronto, a volunteer-run housing advocacy organization. 

Lombardi describes the budget's measures on housing as ineffective and says that suggests the Ford government "has given up on its own housing goals and has no interest in really achieving its prior promises on this file." 

The biggest new measure related to housing in the 2025 budget involves adding $400 million to existing programs that fund municipal infrastructure for housing, such as water mains. 

There's also a commitment of $50 million over five years to boost the province's capacity in modular housing  construction.

The budget includes no changes to the centrepiece of the government's housing plan, what's called the Building Faster Fund. Announced in 2023, it promised to provide $1.2 billion over a three-year period to municipalities that achieve annual targets for new home construction starts. 

The province distributed only $280 million from the fund in 2024, its first year, after more than half of Ontario's municipalities failed to hit the housing start targets in 2023.

The government hasn't updated its housing start tracker since October 2024. As of that point, nine months through the year, only 11 of 50 municipalities had reached their annual benchmark.

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On budget day, Finance Minister Peter Bethlenfalvy said the government remains committed to hitting the 1.5 million new homes target.  

"We're not going to relent on trying to achieve that goal," Bethlenfalvy said at a news conference.

Bethlenfalvy said tariffs deserve a lot of the blame for the lowered projections for housing starts in 2025 and 2026, which are down more than 20 per cent from the forecasts in last year's budget.

"Let's be clear, tariffs have impacted housing starts right around the world," he said. 

Ontario's housing construction slump, however, predates U.S. President Donald Trump's return to the White House and his imposition of tariffs. Last year's budget forecast 87,900 housing starts across the province in 2024. The actual number for 2024 (reported in this year's budget) was 74,600.

The Ford government's own figures toward its target of 1.5 million new homes are slightly higher than the housing start numbers reported in the budget, because the government also counts a new long-term care bed as a new home.

Bethlenfalvy says he believes federal money for housing will flow more easily and with fewer conditions under Prime Minister Mark Carney than it did before.

"I'm optimistic that the federal government will step up to work in partnership with us and I can guarantee you that will lead to more housing being built," he said. 

The Ontario Real Estate Association praised the government for what it called "pro-housing measures" in the budget. 

"Now is the time to keep their foot on the gas and continue to support policies to bring affordability back for Ontarians and their families," the association's president, Cathy Polan, said in a statement.  

Among the opposition on budget day, Green Party Leader Mike Schreiner went after the government the hardest over housing. 

"This budget utterly fails to even attempt to address the housing affordability crisis," Schreiner told a news conference.

Senior reporter

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