It's not a supply issue. It's a demand issue and a cultural issue.
Toronto is building a ton of housing, but the Government's weird infatuation with 100 million Canadians by 2100 means it's allowing far more people in than is reasonable. The equivalent would be the U.S. allowing in 4 million people per year, which would be considered politically scandalous. The end result is that supply is insufficient in Canada, but largely because there's no way supply can meet demand even if it tried.
I actually think the biggest issue though is cultural. Americans tend to see the stock market as the "wealth building" vehicle and housing as shelter. You buy a cheap house and that frees up money you can then invest in Alphabet, Amazon, Apple, Microsoft, Tesla, etc. This is also aided by the fact that the U.S. is one of the only countries that provides 30-year fixed loan mortgages, so many Americans buy a home and - over time - their mortgage payments dwindle as a percent of their budget due to inflation.
The Canadian stock market conversely is a poor performer, largely "weighed down" by stable bank stocks (the Big 5), freight, bitumen, and energy. It's great for dividend investors, but wholly inadequate for building wealth. Which is why if you look at r/CanadianInvestor, so many of them invest in American stocks. Other than Shopify, Canada's stock market options are largely underwhelming and limited.
The end result is this:
$1,000 invested in the NASDAQ would have secured 9x the gains as investing in the TSX. Even the S&P 500 has done 4x better. Heck, the Dow Jones Industrial Average - considered by Americans to be the index of extremely moribund, lifeless, and lethargic Boomer stocks - has down far better than the TSX.
The graph above ends in 2019 but the numbers keep going. NASDAQ in the past 5 years has increased by 193%, the S&P 500 has increased by 110% and the TSX has increased by only 40%. Considering the compounding effect of wealth accumulation, and these year-over-year distinctions in capital gains create gargantuan differences over a 30-year investment cycle. Even the TSX's impressive performance from 2020-2021 is still below the NASDAQ/S&P performance for the same time period, so the gaps got even larger.
So of course Canadians are going to flock to the most lucrative wealth-building vehicle. People just didn't know what it was. When it became clear that Real Estate was the Golden Goose, people flocked in.
Add on Canada's penchant for inviting Chinese dark money, and the end result is a predictable housing bubble.
People complain about supply, but Canada actually handles supply very well. Yes, there are major NIMBYs and lots of single-family zoning, but there's also tons of dense infill going up. Building more will definitely lead to smaller increases, but Canada can never keep up with demand if demand isn't just those seeking shelter, but those who see owning 5 homes as their retirement plan. When euphoria takes over - and 50% annual increases in the middle of nowhere is certainly euphoria - then there's no way to contain the Tulip Mania than to wait for the House of Cards to collapse.