Canada has an ambitious plan to double the pace of homebuilding within a decade but the first big challenge is finding enough skilled workers, as the country grapples with the tightest labor market on record and with construction already at a multi-year high.

Building more homes is a key peg of the C$9.5 billion ($7.5 billion) in housing spending outlined by Prime Minister Justin Trudeau’s Liberal government in their budget on Thursday.

The average selling price of a Canadian home has surged more than 50% in the last two years, driven by record low interest rates and tight supply. Construction has failed to keep pace with immigration-driven population growth.

But the plan to build hundreds of thousands of new homes runs counter the reality that home building is generally the purview of municipal and provincial governments, leaving the federal government little role beyond handing out money.

“It’s very ambitious. I would say it’s going to be equally challenging to pull it off, simply because the construction sector is already more or less operating at full capacity,” said Robert Kavcic, senior economist at BMO Economics.

“And we are already building a record number of homes in this country.”

Canada has the lowest number of housing units per 1,000 residents of any Group of Seven nation, and that has been on the decline due to population growth, Bank of Nova Scotia economists said.

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