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Most economists are of the opinion that Ontario\u2019s residential construction industry is in for another tough couple of years, with housing starts and sales expected to remain historically low. At a recent housing summit hosted by RESCON we heard that the impact could be the loss of almost 100,000 construction jobs, which would result in a $1 billion economic hit to the province.<\/p>\n
The federal and provincial governments have set ambitious housing targets but will be hard-pressed to achieve their lofty goals. In Ontario, for example, 49,678 units were started in the first 10 months of this year \u2013 only 33 percent of the annual 150,000 units that are required to meet the provincial goal. And that is even with various new categories of housing being added by government such as university dorms. New home sales across the GTA sank to another low in October. Across the region, only 322 new single-family homes were sold that month, down 41 percent year-over-year, and 248 new condos were sold, a two-percent decrease from October 2024. In all areas of Toronto, including North York, Scarborough, East York, Etobicoke, York, and Old Toronto, just 54 new condos were sold in October. Urbanation has reported that the new condo market in the Greater Toronto Hamilton Area is on track to record its worst year for sales in three and a half decades.<\/p>\n
A combination of uncertainty caused by events south of the border as well as the costs of housing due to the high tax burden have made it difficult for a working family to afford a new home. To get an accurate picture of the situation, RESCON commissioned a report from the Missing Middle Initiative at the University of Ottawa. Using data obtained from Canada Mortgage and Housing Corporation and Altus Group, the department assessed the state of new home starts and sales across 34 municipalities in the Greater Toronto Area (GTA) and Greater Golden Horseshoe (GGH) region, and looked at the effects it would have on industry employment. The analysis revealed that housing starts in the first nine months of 2025 were down substantially from the same period in the previous three years, while industry job losses continued to grow. Housing starts were down 34 percent in the municipalities over the first three quarters of 2025, relative to the January-to-September periods in 2021-24, while condo apartment starts were down 51 percent in 2025 relative to the same earlier time periods.<\/p>\n
The decline in housing starts is resulting in significant job losses. The analysis estimates that the reduction in housing starts over the first nine months of this year translates into 35,377 fewer person-years of employment, compared to the same period in the previous three years.\u00a0While the findings of the report are alarming, it confirms what the residential construction industry and builders have been experiencing and saying for some time now, namely that there have been significant job losses in the industry which will have a major trickle-down effect on the economy. In 2023, the latest year for which complete data is available, the construction industry contributed $59.1 billion to Ontario\u2019s GDP, which accounts for 6.8 percent of the province\u2019s total. That year, the construction sector employed 596,000 people, about 7.5 percent of Ontario\u2019s workforce.<\/p>\n
To get the industry back on track, governments must take steps to lower the cost of housing by cutting the taxes that people pay when buying a home. Taxes, fees and levies presently account for 36 percent of the cost of a new home. On a $1-million home, that\u2019s $360,000 of the price tag. The federal and provincial governments took a positive step by agreeing to waive sales taxes on new homes under $1 million for first-time buyers and provide partial rebates for those between $1 and $1.5 million. Ontario also paved the way for development charge deferrals with Bill 17, which allows developers to pay municipal fees when the property is handed over to the buyer, rather than when the building permit is issued. And, the provincial government passed Bill 60, which is aimed at streamlining approvals and site plan control, and will help to lower the costs of building. But plenty of work remains.<\/p>\n
Premier Doug Ford suggested recently that the sales tax break on new housing should be extended to all new home buyers \u2013 not just first-time purchasers. That would be a significant move. A report coming out soon from the Canadian Centre for Economic Analysis notes that freezing sales taxes on all new housing for three years would produce significant savings for homebuyers.<\/p>\n
We cannot sit on our hands. There is too much at stake.<\/p>\n
Richard Lyall is president of the Residential Construction Council of Ontario (RESCON). He has represented the building industry in Ontario since 1991. Contact him at <\/em>me***<\/span>@****<\/span>on.com<\/span><\/em><\/a>.<\/em><\/p>\n<\/div>\n