Canada’s Budget 2025 has arrived with big promises of economic transformation and renewal. While housing is explicitly positioned as one of the government’s four “generational investment pillars,” the reality is more sobering.
Despite the budget’s claim that “unprecedented investment in building homes for Canadians… will make housing attainable,” it is unlikely to improve affordability in the Greater Toronto Area.
The budget promises fiscal stimulus to boost economic activity and help Canadians afford homes. But the spending flows unevenly through the economy. Infrastructure investment reaches high-income professionals first while taking years to reach working-class buyers, even as immigration cuts weaken the markets where those buyers would transact.
The result is a budget that helps a CEO buy a mansion in Rosedale more than it helps a nurse in Oshawa or a teacher in Brantford buy their first home.
A selective stimulus
Budget 2025 introduces large infrastructure investments, defence spending and productivity measures designed to stimulate growth. The overlooked question for housing is not where these projects will be built, but who benefits most from the spending.
Federal funding will hit private sector firms for project management, engineering, planning, and professional services long before reaching the construction phase. Defence contracts follow the same pattern, going to aerospace, technology, and systems firms.
Even for infrastructure projects built across Canada, a disproportionate share of initial capital reaches firms and employees in major cities like Toronto, where corporate Canada is concentrated. Corporate structures concentrate these gains upward.
Senior management captures the largest share through performance-based compensation tied to revenue growth and share price, while mid-level and entry-level employees only see salary increases when they climb the corporate ladder.
The spending multiplier from the large fiscal impulse only compounds from there. The budget assumes massive private capital deployment alongside government funding through partnerships and co-investment. This means big Bay Street companies like banks, management consultancies and law firms earn huge revenue whether projects ultimately succeed or not. High-income professionals who work in these sectors will end up capturing substantial revenue as project activity accelerates.
The blue-collar build-out of the infrastructure spending happens across the country, wherever projects are located, spreading construction jobs nationally. But white-collar revenue from planning, financing, and managing those projects concentrates in Toronto.
For housing, this creates an uneven stimulus effect. Senior professionals who capture infrastructure revenue see income growth that strengthens their purchasing power for quality single-family homes in established neighbourhoods.
Working-class buyers struggling to enter the GTA market see far less benefit from the fiscal spending. The budget stimulates demand selectively rather than broadly.
Housing programs miss the buyers they claim to help
Two central housing measures promise help for aspiring homeowners. Neither meaningfully improves purchasing power for entry-level buyers.
Build Canada Homes
Budget 2025 allocates $13 billion over five years to Build Canada Homes, a program designed to support non-market, affordable and community housing. This supply is essential for vulnerable populations, but the program does not touch the resale market, where the vast majority of Canadians buy and sell homes. It does not help first-time buyers compete for existing homes or bolster the incomes of would-be purchasers.
First-Time Buyer GST Relief
The new GST rebate — eliminating the tax on newly built homes up to $1 million and phasing it out to $1.5 million — appears targeted toward entry-level buyers. But the pre-construction sector’s challenges run deeper. Developers relied heavily on investor absorption during the 2010s and early 2020s. With investor demand evaporating and construction financing tightening, tax relief for end-users cannot offset the structural weakness in the development model. The rebate may offer modest savings, but it does not restore the investor-driven absorption rates that once made projects viable.
Immigration cuts remove demand where it’s needed most
While infrastructure spending creates winners in high-income segments, immigration policy removes demand from rental-heavy and investor-driven markets where working-class buyers would compete.
The federal government’s 2025–2027 immigration plan foresees a decline of roughly one-quarter in temporary resident arrivals between 2025 and 2026, with numbers remaining lower than 2025 levels through 2027. More than 40 per cent of permanent residents admitted in 2025 will already be living in Canada as students or workers, meaning the headline totals overstate net new arrivals.
Ontario, which historically receives about 43 per cent of newcomers, will absorb much of this reduction. International students and temporary workers were central to rental demand over the past decade and helped support investor purchases in condo-heavy markets. Now, student caps and changing work-permit rules are cooling rental markets and feeding inventory into already stressed investor-owned condo segments.
The impact extends beyond investor condos to suburban and secondary markets within the GTA. These markets saw explosive price growth from 2020 to 2022 as new Canadians bought first homes in more affordable areas under ultra-low rates. Immigration cuts now remove the housing demand and consumer spending that sustained these communities. Fewer newcomers mean fewer first-time buyers competing for entry-level homes and reduced economic activity in local businesses dependent on population growth.
The affordability paradox
The segments hit hardest by immigration cuts will see prices weaken, which in theory improves affordability. But weakening prices do not help working-class buyers if their incomes remain stagnant. The budget’s fiscal stimulus was supposed to boost economic activity and purchasing power across the economy, but infrastructure spending reaches white-collar professionals first and may take years to trickle down to blue-collar workers and entry-level buyers. Entry-level buyers face a market where prices may fall but their ability to qualify for mortgages and compete for homes does not improve in the near term. Meanwhile, high-income professionals who capture infrastructure revenue immediately gain purchasing power just as inventory in quality segments remains tight. The budget stimulates one side of the market while depressing the other.
This dual pressure is not creating a new market dynamic. It is accelerating a rebalancing that began in 2022. Ultra-low rates lifted all properties simultaneously regardless of condition, location, or long-term utility. That dynamic ended when cheap credit disappeared. Value now diverges based on fundamentals: location quality, renovation level, building condition, and owner-occupier appeal. Homes with strong fundamentals hold value while properties that depended on speculative demand struggle.
A market divided
On a recent podcast, Rebekah Young from the Scotiabank Economics team captured the problem succinctly, “Many Canadians will open the budget and say, what’s in it for me? And they’ll be disappointed.” That disappointment will not be evenly distributed, because not all government spending creates equal confidence
Budget 2025 does not create this divergence. It accelerates what rising interest rates already set in motion. The result is a market where advantages compound, widening the gap between strong and weak segments. This structural divide shapes market psychology, and in real estate, sentiment drives behaviour as much as fundamentals.
Ottawa is also allocating fiscal support to industries affected by tariffs, but defensive spending operates differently from infrastructure investment. A factory kept open by tariff relief generates hesitation about major commitments, while an engineering firm landing a multi-year infrastructure contract generates security. This psychological gap reinforces the market divide. Those closest to infrastructure spending feel confident and will transact in quality segments, while those farther from it feel left behind and will delay decisions or exit markets entirely.
Budget 2025 promises transformation. What it delivers is a sharper line between buyers who can act now and those who must continue to wait.
Cameron Levitt is a Sales Representative at RE/MAX Hallmark and the Founder of CLRE. His written work centers on GTA housing markets, focusing on structural market dynamics, policy-driven shifts, and market behaviour across neighbourhood segments. He writes to clarify complex conditions and support stronger decision-making across the real estate industry.