Yeah, no government is going to make it their stated policy to drastically reduce nominal home values. That has a bunch of side effects, is largely counterproductive (as it kills investment in new housing), and is politically unpalatable.
And given the drop in nominal prices we've already seen, it really doesn't take a whole lot to get back into a somewhat reasonable range for real property prices.
The problem is, everyone (including the CMHC) uses the early 2000s as a sort of baseline that we need to return to, but that's really not appropriate or realistic. The very cheap housing that existed then stemmed from a confluence of factors that we really don't want to repeat if we can avoid it (e.g. double digit unemployment for a lot of the '90s, a decade and a half of declining growth among the 25-40 year old population, etc.). In fact, that era was an aberration historically (see chart below).
A more realistic target would be the 2010-2019 period which is roughly the median level of the last 30 years and more affordable than almost any point in the 1980-1995 period:
To get housing affordability back to what it was in that era, we need a drop of about 25% (the chart is a bit old, so some of the drop has already happened). For that to happen in 5 years or so, would require:
-continued moderation of mortgages rates into the ~3-3.5% range (which is already on its way to happening)
-flat prices or slight declines
-~2.5-3% annual wage growth, which is lower than average for recent years
None of that is particularly extreme and it doesn't require a huge housing crash. That's not to say a crash won't happen if there's a recession, but it should never be government policy to induce that. The goal should always be a soft landing.