OTTAWA (Reuters) -Canada would need to more than double the number of homes it is projected to build by 2030 to restore housing affordability, the national housing agency said on Thursday.
The Canada Mortgage and Housing Corporation (CMHC)said 3.5 million more houses would be needed, on top of the 2.3 million housing units Canada is projected to add to the housing pool by 2030.
The agency said the provinces of Ontario and British Columbia are going to contribute two-thirds of the housing supply gap by 2030, while Quebec would also need more houses.
Home prices in Canada soared during the coronavirus pandemic, making housing unaffordable for many people in large cities like Toronto and Vancouver.
"Canada's approach to housing supply needs to be rethought and done differently," said Aled ab Iorwerth, CMHC's deputy chief economist.
"There must be a drastic transformation of the housing sector, including government policies and processes, and an 'all-hands-on-deck' approach to increasing the supply of housing to meet demand," Iorwerth added.
Canada has an ambitious plan to double the pace of homebuilding within a decade but finding enough skilled workers could be challenging due to a tight labor market.
CMHC said alternative approaches to construction could be tapped and more homes could also be added to the pool by increasing co-living arrangements and redeveloping existing properties.
Building more homes is a key peg of C$9.5 billion ($7.3 billion) in housing spending outlined by Prime Minister Justin Trudeau's Liberal government in their 2022 budget.
($1 = 1.2972 Canadian dollars)
(Reporting by Ismail Shakil in Ottawa; Editing by Mark Porter and Bernadette Baum)