Budget 2026 Introduces New Framework to Coordinate Housing Policy

Ottawa released Budget 2026 on Thursday, introducing a three-pillar, one-foundation framework designed to coordinate future housing policy across all orders of government, missingmiddleinitiative.ca reported.

The federal government structured the new framework around eliminating homelessness, expanding non-market housing, and enhancing market-housing affordability. The foundation addresses system-wide measures including labour pools, zoning codes, and infrastructure sharing.

The 2017 National Housing Strategy is soon to expire and will need replacement. The new framework acts as a guiding vision for future strategies.

Budget 2026 includes raising the home price limit for optional mortgage insurance from $1 million to $1.5 million. This change permits 30-year amortizations for insured mortgages when at least one borrower is a first-time home buyer or the home is newly built, according to missingmiddleinitiative.ca.

Canadian Mortgage Trends reported that BMO Capital Markets expects the budget to have a muted effect on bond yields. For 2027–28, the federal government anticipates issuing $88 billion in 5-year bonds, which marks an increase from the $80 billion projected for the current fiscal year.

BMO economists noted that near-term inflation trends and any resolution of trade disputes will matter more for both yields and the loonie.

Canadian Mortgage Trends outlined several measures affecting borrowers, builders, and lenders. Ottawa proposed giving the Canada Revenue Agency authority to verify mortgage applicants’ income through agreements with lenders and insurers, backed by $13 million over three years starting in 2027–28.

Mortgage Professionals Canada continues to press for broker and brokerage access to the income verification service. Broker access remains unresolved.

Starting February 1, 2027, lenders can submit insurance applications under new rules for triplexes and fourplexes. Builders can secure insured construction loans for up to 90 percent of a property’s expected finished value without a price cap.

Additionally, the federal government prolonged the prohibition on foreign acquisitions of already-built residential properties for an extra two years, setting the new deadline at January 1, 2029, while newly constructed residential properties remain excluded. The budget allocates $100 million over three years to support municipal e-permitting and artificial intelligence adoption.

Housing stakeholders are examining the Budget 2026 framework alongside the expiry of the National Housing Strategy.