Annual residential construction starts across Canada, from condos to bungalows, would need to more than double the average of the past 23 years to meet Ottawa’s ambitious target of 3.87 million new homes by 2031, ramping up extensively from previous years of stagnant construction.
Last month, the federal government announced Canada’s most recent Housing Plan. It seeks to build two million net residential units by 2031, in addition to the 1.87 million units that the Canada Mortgage and Housing Corporation forecasts will be built regardless during the same time. A mix of loan and tax measures for developers, administered by the federal and provincial governments, have been enacted to boost housing construction.
To build 3.87 million new homes by 2031, Canada would need to see an average of 483,740 new residences each year for the next eight years. But the annual average between 2000 and 2023 was only 208,939.
Since 2000, the average growth of new construction on residential units has been 2.7 percent. If Canada maintained that current pace over the coming years, only 2.1 million additional homes would be built from 2023 to 2031.
To meet this 3.87 million housing goal described as “adjacent to impossible,” Canada would need to buck years of stagnant housing construction starts, shown in the chart below. As housing starts have failed to match Canada’s growing population, home prices have soared, while personal disposable income has been unable to keep up.
Canada could be building between 130,000 and 225,000 additional homes each year, or a total average of around 400,000, according to a report by CMHC, released this month. The hurdle is less to do with a lack of workers and materials, and more to do with municipal regulations and construction industry fragmentation, said the CMHC.
Delays in city permits being delivered, development charges, and density regulations are delaying developments and investment.
Nearly 69 percent of Canadian construction businesses have less than five employees. Their consolidation could generate a better economy for construction at scale, passing savings onto Canadians, explained the CMHC.
On Tuesday, the housing ministers for both the federal and Ontario governments, Sean Fraser and Paul Calandra, announced Ottawa would provide Ontario $357 million to meet its housing goals.
The deal requires Ontario to provide more data on how previous provincial investment supported housing projects, and how future investment will support the housing industry and data collection at the city-level. Ontario is the only jurisdiction in Canada which provides government housing funds through municipal leaders.
The agreement also means an end to months of disagreement over additional federal funding to Ontario. The federal government had said Queen’s Park didn’t provide enough detail for their planned use of $5.8 billion to create 19,660 rent-assisted residences by 2028. During the dispute, the federal government threatened to by-pass Queen’s Park by providing National Housing Strategy funding directly to Ontario municipalities.
London and Guelph, Ont., have already received $74 million and $21.4 million from Ottawa’s separate Housing Accelerator Fund, specifically for municipal governments.
London said it will help finance over 2,000 affordable homes in the next three years and incentivize office tower conversions. Guelph promised an additional 739 homes above its annual average. Windsor, Ont. was denied the same direct federal cash.
“Only the most ambitious communities will receive funding,” wrote minister Fraser in his letter to Windsor denying their application.
Further West, the government of Alberta has been critical of the federal government’s National Housing Strategy for provinces for its perceived lack of consultation.
“No information has been provided about whether funding will be provided per capita, to ensure it is not used for political gain,” said Alberta Minister of Municipal Affairs Ric McIver and Minister of Seniors, Community, and Social Service Community Jason Nixon in a statement.
“We reject the idea that the provinces and territories should not be involved in this decision, as we are best positioned to understand the local housing needs and concerns of our communities,” they said.
Kiernan is The Hub's Data Visualization Journalist. He was previously a journalism fellow for The Canadian Press and CBC News, where he produced for Rosemary Barton Live, contributed to CBC’s NewsLabs and did business reporting. He graduated from the School of Journalism at Toronto Metropolitan University with minors in global…...
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