⭐ Our BuildCanadaHomes.org Analysis:
Takeaway:
The Ontario government’s revised economic statement indicates a significant downward adjustment in projections for new home construction, reflecting a shift away from the ambitious target of 1.5 million homes over ten years. The latest forecasts have lowered the expected number of homes built this year to 64,300, amidst ongoing challenges such as tariff uncertainties and rising material costs, which have stifled momentum within the construction sector. Critics, including NDP Leader Marit Stiles, assert that this represents a government retreat from addressing Ontario’s housing crisis, particularly impacting the skilled trades and homebuilders who rely on sustained construction activity.
For builders and developers in the Greater Toronto Area and broader Ontario market, the implications of these revised projections are substantial. With construction forecasts stagnating, it may be prudent for industry stakeholders to pivot strategies that foster innovation and efficiency in project management and cost control. An actionable takeaway would be for construction firms to advocate for clearer policies surrounding materials procurement and local development incentives. By engaging with policymakers actively, businesses can help shape a regulatory environment that mitigates adverse economic conditions and supports a revitalized housing agenda. This matters because the long-term viability of Ontario’s construction landscape hinges on a collaborative approach to foster an industry foundation that can meet both current demands and future growth sustainably.
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Ontario is lowering projections for new home construction levels in its fall economic statement, putting the government further away from its goal of building 1.5 million homes in 10 years — a goal the finance minister said is now a “soft” target.
It is the third consecutive budget or fall economic statement in which projections have been revised downward, and Municipal Affairs and Housing Minister Rob Flack has recently appeared to back away from the 1.5 million homes goal.
Finance Minister Peter Bethlenfalvy pointed to comments from Flack, who recently said his goal is to get shovels in the ground faster.
“The minister has communicated that the target there, he’s softened, said that target is no longer a hard target, but that we’re going to continue to move forward on building as many homes as we can,” Bethlenfalvy said.
In the spring budget, the province expected to see 71,800 homes built this year — already far off the pace needed to reach 1.5 million, but now it projects an even lower 64,300.
Projections for the next few years are also low, with 70,200 new homes expected next year, 79,600 projected in 2027 and 83,700 expected in 2028.
“Private-sector forecasters continue to highlight the negative effects of tariff-related uncertainty and material cost increases on homebuilding,” the government wrote in its fall economic statement.
Province appears to have ‘thrown in the towel’: NDP
NDP Leader Marit Stiles said it sounds like the government has given up.
“It looks like the government has thrown in the towel on building housing in the province of Ontario,” she said.
“Let’s be clear about what that means as well. Not only does it mean that we’re not building homes, any homes, let alone affordable homes that people can truly afford in the province of Ontario, but it also means that we have people who are construction workers, home construction workers, that can’t find work at a time when we know there is a housing crisis.”
Construction activity, particularly in condominiums, has slowed from a 2023 peak, the government wrote, though the downturn was partially offset by higher levels of purpose-built rental construction.
Ontario home resales, meanwhile, are projected to decline eight per cent this year as economic uncertainty weighs on the market, before bouncing back by 10.2 per cent next year. The average home resale price is projected to decline 3.3 per cent this year and rise 2.8 per cent next year.
Slower-than-expected housing market activity is also leading to a more than half a billion hit to the province’s books. Land transfer tax revenue projections are $576 million lower than they were in the spring budget.
Homebuilders have said that some of the most helpful measures governments could take to encourage development would be to reduce taxes and fees.
The government is promising an HST rebate for first-time homebuyers on homes of up to $1 million, a value critics have said won’t allow many homebuyers in the Greater Toronto Area to take advantage.
The fall economic statement shows the government expects the rebate will cost just $35 million, though that rises to $190 million and $245 million in the next two years.
Source: Read the original article at Ontario’s goal of 1.5 million more homes in 10 years now a ‘soft’ target: finance minister on www.cbc.ca
