I think this won't help because money for developers is not what holding things back. Developers in Canada seem to have plenty of money, but they are restricted

I think this won't help because money for developers is not what holding things back. Developers in Canada seem to have plenty of money, but they are restricted by approvals and construction capacity in building more. Developers will always charge market rate (which is now like 2000$/sqft) for their new buildings since they want to maximize their profits. Their cost do not play any role in what they are charging. Maybe it would help if these loans would help to get new developers and builders into the game. But if those need to hire the same builders, it's questionable whether there is more build capacity in the end.