With the Liberal minority government’s victory on April 28th, a bold new housing strategy is on the horizon. A key focus? Tackling Canada’s housing affordability crisis by accelerating the pace of home construction. But while the federal government pushes ahead with ambitious targets, Canada’s Property and Casualty (P&C) insurance industry is raising crucial concerns, particularly about where these new homes will be built.
In this article, we break down what the Liberal housing plan means for the future of affordable housing in Ontario and across Canada, and how it could impact homeowners and insurance providers alike.
Liberals Commit to Building 500,000 Homes Annually
At the heart of the Liberal government’s housing platform is a new national agency: Build Canada Homes. This agency is tasked with delivering 500,000 new homes per year, effectively doubling Canada’s current pace of housing construction. The homes will be developed on public lands to ensure affordability and accessibility.
Key goals of the Build Canada Homes initiative include:
- Building affordable housing at scale
- Utilizing federally owned lands for development
- Ensuring housing near transit, jobs, and essential services
This large-scale plan reflects the federal government’s attempt to address supply shortages and bring relief to the red-hot housing market.
Climate Resilience and Insurance Concerns: Industry Cautions on Location of New Builds
While building more homes is essential, the insurance industry is urging caution. The Insurance Bureau of Canada (IBC) warns that placing new developments in high-risk areas—such as floodplains, wildfire zones, or other hazard-prone regions—could increase future disaster risks and drive up insurance costs.
According to an IBC report titled Lessons for Canadian Policymakers from the California Insurance Crisis:
“Core among the industry’s policy recommendations is mandating resilience in new construction, through building codes, and ensuring new development is restricted in high-risk hazard areas.”
Despite the federal plan, IBC has not yet commented on the new housing proposal, but their previous statements make one thing clear: hazard mitigation and climate adaptation must be built into any future housing strategy.
Affordable Housing and Revival of National Flood Insurance Program by 2026
Another important promise from the Liberals is the reintroduction of a National Flood Insurance Program, which is projected to launch by April 2026. This program will offer low-cost flood insurance for high-risk areas and support homeowners facing increasing climate-related risks.
This flood program is particularly critical as Canada faces more frequent and severe weather events. In 2024 alone, natural disasters caused nearly $9 billion in insured losses, largely due to flooding and wildfires. The Liberals promise to work closely with provinces, territories, and insurers to finalize the design of the program and make it available nationwide.
Conservative Housing Plans Also Targeted Affordability, But With a Different Approach
Although the Conservative Party did not form government, their housing platform also included ambitious goals, pledging to build 2.3 million homes over five years. Their strategy focused on unlocking value from the federal government’s property portfolio.
Highlights of the Conservative housing plan:
- Sell 11,000+ federal properties, particularly in urban areas
- Identify and release 15% of federal land and buildings within the first 100 days
- Encourage private sector developers to build affordable homes on this land
This market-driven approach aimed to increase housing supply quickly while leveraging existing assets. However, like the Liberals, they faced scrutiny over ensuring developments wouldn’t occur in environmentally hazardous locations.
The Insurance Industry’s Message: Prioritize Hazard Mapping and Resilient Building
As Canada’s housing supply grows, experts stress that climate risk must be a core consideration. IBC continues to call for improved hazard mapping tools to help governments and developers make informed decisions.
“Canada needs to invest in improved hazard mapping to support provinces and communities in identifying high-risk wildfire zones,” IBC states. “These maps should be made public and updated regularly to identify new areas at risk.”
By focusing on climate resilience, updated zoning practices, and strategic development planning, Canada can avoid compounding its housing and insurance challenges.
Final Thoughts: Affordable Housing and Insurance Go Hand in Hand
As Canada embarks on an ambitious path to make housing more affordable, it’s essential to balance speed with safety. Whether homes are built by the federal government or private developers, location, climate resilience, and insurance accessibility must remain priorities.
If you’re planning to buy an affordable home or invest in property, ensure you have the right insurance coverage, especially in regions prone to flooding, wildfires, or other climate-related risks.
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