To understand Canada’s housing affordability crisis, simply consult the law of supply and demand. Too few homes are being built for Canada’s surging population, which has been fuelled by record-setting levels of immigration. In response, the Carney government has promised to double the rate of homebuilding in Canada by 2035. 

But is that realistic?

To achieve that feat, homebuilding in Canada must increase by an annual average rate of 6.5 per cent over the next 10 years. But according to new housing data, construction on new homes in Canada increased by only 3.5 per cent in the first half of 2025 compared to the same period last year. The national figure was weighted down by sharp declines in Ontario (-24.8 per cent) and British Columbia (-8.2 per cent), reflecting steep drops in Toronto (-44.2 per cent) and Vancouver (-10.6 per cent). 

Meanwhile in Alberta, in the first half of 2025, construction started on 27,902 new homes—an increase of 29.7 per cent over the same period last year—with sizeable gains in both Edmonton (28.6 per cent) and Calgary (31.6 per cent). In fact, if not for the increase in homebuilding in Alberta, national housing starts would have fallen by 2.2 per cent rather than increasing by 3.5 per cent. 

Not surprisingly, In recent years Alberta has welcomed tens of thousands of residents from other provinces due in part to relatively affordable housing. And when Canadians move to Alberta, they ease pressure on the overheated housing markets they leave behind. While Alberta still has housing challenges—supply hasn’t kept pace with Alberta’s population boom—the province is trending in the right direction, something that can’t be said for many other parts of the country. 

But Alberta can’t solve the national housing crisis on its own. Consider that 6,392 more housing starts were added in Alberta in the first half of this year compared to the same period last year. Meanwhile, Toronto alone saw housing starts drop by 9,954—more than wiping out Alberta’s gains.

Clearly, homebuilding in Alberta is a source of strength for the province and the country. But areas of the country struggling to build enough homes would do well to emulate Alberta’s success, which rests in part on comparatively low municipal fees on builders, faster approvals by city hall for new housing projects, and more relaxed rules regarding what can be built and where. For its part, Alberta and its municipalities should double down on these policies to maintain the province’s housing advantage. 

Alberta is setting the pace on housing construction. It should keep building—and the rest of Canada should catch up.

Tegan Hill and Austin Thompson are analysts at the Fraser Institute.