People focus on the zoning a lot, but it really is the tax policy.
Look around Vancouver and you'll see little three story walk up apartments all over. They stopped making them in 1993 because the incoming Liberal government adopted an incredible deficit slaying austerity approach which was in vogue at the time. The federal government completely got out of participating in housing at all. Beneficial tax policy that encouraged small apartment development was ended and since '93 pretty much the only thing that was built after was condos.
Effectively the current housing affordability crisis in Canada can be traced back to this early 90s austerity decision. Nothing filled the void left by the government pulling away from housing development.
The relatively much more spendy contemporary Liberal government has made lots of noises about housing investment, but they really haven't done much at all to undo the damage of the '93 Liberals.
What was "in vogue" at the time was a Conservative (sic) Mulroney government routinely outspending revenues resulting in Canada's federal debt crisis in the early 90s[1][2] which helped usher in the Cretian government and Paul Martin's austerity measures. I think the austerity measures helped put Canada back on track.
[1] https://tradingeconomics.com/canada/government-debt-to-gdp
[2] https://www.fraserinstitute.org/sites/default/files/federal-...
yes, regulatory capture at work. any time a stipulation is prescriptive rather than (largely) descriptive, it's quite likely a mistargeted regulation. being numerical makes it seem objective, but despite that, it doesn't lead to the implied/explicit intent, which is more equitable housing. it's a token gesture meant to veil the true intent of benefiting, and concentrating power among, cronies. oftentimes, the rationale behind writing regulations this way is to create a clear delineation of what's acceptable and not, but the line is nearly always drawn in the wrong place and is hopelessly incomplete in scope relative to objective.
it's the same class of deception as citing selective (i.e., incomplete) statistics.
what we need is to explicitly encourage human-scale ownership and development everywhere, through every means available, including zoning reform and tax policy.