There's a chance that the economy will do its job on house prices and that's all it will take to see prices drop. Weakening economy, recession, job losses... I don't think many real estate markets in Canada are strong right now, at least not like a few years ago. Most baby boomers try to stay in their homes as long as possible but at some point for health, mental or financial reasons they can't keep up a family home anymore and have to sell, the upper half of baby boomers are 70 to 80 years old now and I'm guessing the wave of them leaving their homes is well underway and still has a ways to go. When the economy gets tough people with assets sometimes have to sell, and that second or third investment property goes up on the market with all the others getting listed. If you're old enough you've seen times in Canada where it seemed like every third or fourth house on the block was up for sale, people just haven't seen that in a while. Immigration numbers have gone down and some people who have come to Canada recently find it too expensive and leave, so there goes that demand. The flipside with a bad economy is that more people then can't afford the homes even if they're dropping in price.
But all else being equal, I don't think it's the government's job to be building homes, or building or running anything in the economy. Does anyone really think the Liberals could run an efficient program that builds millions of homes when it's never even been done before. The government's job is to set the economic climate to encourage the market to build more homes, so yes drop the GST on new homes, drop taxes on homes, cut the red tape and bureaucracy, lower high fees, streamline and cut down on permitting times. For years government (federal, provincial, municipal) have seen the construction business as a cash cow and it has been over taxed, had multiple increasing fees, and long wait times to do anything. When you look at everything a home or condo builder has to go through in terms of dealing with government in construction you wonder how anything ever gets done, and it isn't surprising how housing prices have gotten so high because it all gets passed on to the buyer in the end.