This recommendation is part of a broader set of strategies outlined by the CHBA to boost homebuilding across the country. Among these, the association is advocating for an investment tax credit to enhance productivity in the construction sector.

Housing expert Mike Moffatt supports initiatives like the investment tax credit, but he’s skeptical about the impact of longer mortgage terms on the core issues of housing supply and demand: “I don’t think it’s particularly harmful. But I also don’t think it’s particularly helpful either.”

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The backdrop to these discussions is Canada’s acute housing shortage, exacerbated by rapid population growth. The Canadian Mortgage and Housing Corp. has stated that Canada needs to build 5.8 million homes by 2030 to restore affordability. The government has acknowledged the necessity of innovation in home construction, with Housing Minister Sean Fraser promoting modular homebuilding as a way to speed up the construction process.

As such, the federal government is planning to introduce a catalogue of pre-approved home designs to simplify the permitting process and encourage the use of factory-built homes. This method is already employed by about a quarter of homebuilders, but there’s room for expansion. The CHBA proposes a refundable tax credit of 30% on investments in machinery and equipment to push the industry forward, drawing parallels to incentives used to promote the green economy.