There is not enough developed land around Canadian cities for what Canadian buyers want:
The world’s second biggest country by landmass is effectively running out of space, and that has Canada on course for a reckoning. The dream of a detached home and a piece of land, which generations of Canadians have taken for granted, and which continues to entice new immigrants, may soon be out of reach in the places where people want to live. That could force an expansion of the idea of home to include condos and rentals, potentially transforming how the middle class does everything from raising families to saving for retirement…
In Canada, buying a home has long been seen as the surest path to middle class security. Canadians on average live in some of the biggest houses in the world, and post higher rates of homeownership than in the U.K., or France, or even the U.S. The pandemic has put an even bigger premium on backyards and extra space…
Still, developers don’t seem to be responding. Though construction started on a record number of new homes in Canada’s metro areas in March, the percentage that were single family-detached actually fell to 19% from 24% the previous year, according to government data. While this ratio improved in April, new home starts slowed that month overall…
It comes down to land. While Canada boasts a total area of about 10 million square kilometers (3.9 million square miles), roughly 40 times the area of the U.K., most Canadians are clustered in a handful of major cities not far from the U.S. border. That’s where the jobs are. And while the work-from-home era has expanded that radius for some, turning quiet farming communities and weekend-getaway spots into the hottest real estate markets in the country, the possibility of returning to the office even a few days a week has kept most workers from striking out too far afield.
The proposed solution in the article is more condos, apartments, and townhouses. These would have provide denser populations and expand the housing options. But, this is not what all Canadians want: like in the United States, the idea of a single-family home is both popular as an ideal and investment.
Here is a different answer from Canada’s southern neighbor: sprawl. More and more sprawl. The article says Canada is out of land; this is not quite true. Keep building suburban areas out from cities. Take advantage of the work from home days of COVID-19. Build on the interest of some Canadians to have their own home and land. Give in more to car culture. Go thirty, forty, fifty miles out like the biggest American cities. There will still be plenty of land in the middle of the country for farms and up north for open space.

This may not be a welcomed answer. This all leads to more driving, more dependence on roads. It means less energy efficiency, perhaps particularly during cold winters. It might introduce the same problems that plague sprawling American metropolitan areas.
But, if Canadians do not adjust to living in smaller units in closer proximity, sprawl is one option. The emphasis on homeownership and vehicles is already there. It could be a different kind of sprawl, maybe denser than the American version or more community oriented. Perhaps some lessons could be learned from the mistakes made in the United States. At the least, it could relieve some housing pressure, provide jobs for builders and developers, and set up new subdivisions and future communities for decades to come.