The federal government’s enormous bet on new construction is unlikely to have much of an effect on soaring home prices, some economists and housing experts are warning.

The strategy to massively ramp up construction of new homes across Canada is the centrepiece of the Liberal government’s updated housing strategy, which itself was the focus of the 2022 budget.

The spending plan sets aside $4 billion to create a Housing Accelerator Fund, a program still in development meant to help municipal governments speed up new housing projects.

Ottawa says that fund will contribute to building the 3.5 million new homes it argues Canada needs over the next 10 years.

“The solution to housing affordability is housing supply,” Housing Minister Ahmed Hussen told the House of Commons earlier this week.

But some observers say that approach is based on misinterpreted data and the tendency of politicians to oversimplify complex problems.

“The government seems to have bought into the proposition that any supply is good, and if we flood the market with supply that will bring down prices,” said Steve Pomeroy, a researcher at the Canadian Housing Evidence Collaborative at McMaster University.

“I don’t think there’s any evidence that will actually happen,” said Pomeroy, who has described the undersupply argument as a “myth.”

Christine Whitehead, an emeritus professor at the London School of Economics, said the identification of undersupply as a cause for high prices has been “absolutely consistent” among governments across the world.

Keep reading on CBC News