I absolutely think that is an option. I know that in the city of Toronto they have an agency that has been looking to lever the city's vacant and underused land. I think that federally you have the Canada Lands corporation, which is charged with disposing of excess or surplus lands.
I'm thinking of the Downsview airport. There's a massive site at the end of a subway that could have a lot of housing on it, and there have to be other examples around the country where there are big federal land sites that could be used.