Fixes Required Now Before It’s Too Late

The crane count is coming down across the Greater Toronto and Hamilton Area (GTHA), a symbol of what’s been happening in the residential construction industry.

There were 235 cranes atop buildings across the region as of Jan. 1, according to a tracking and analysis tool of UrbanToronto (UT), a website that covers construction development and real estate. That’s a drop of 44 cranes from the 279 that were atop buildings at the same time last year.

The pipeline of projects continues to dwindle. Developers put forward 318 new projects in 2025, down from 395 the year before. The total number of dwellings proposed fell to 171,578 from 209,490.

UT also reports that the number of cranes is expected to dwindle further as new projects continue to decline.

RESCON and its builders are not surprised by these numbers. They support what we have been seeing for some time now. Residential construction projects are being shelved and many in the workforce are being let go.

Outlook Is Bleak

The outlook is not good. Housing starts are down by 58 per cent year-over-year in the City of Toronto, and 29 per cent year-over-year across all of Ontario’s census metropolitan areas excluding Toronto.

Industry job losses are already in the tens of thousands. More people will lose their jobs in the coming months as homebuilders are faced with difficult but unavoidable choices.

Reports suggest that if significant further public sector action is not taken to support the industry and reverse the ever-increasing job losses, Ontario will likely see a reduction in GDP by as much as 1.5 to 2.5 per cent in 2026 directly related to the situation affecting the residential housing sector.

The next few years could be even worse, with new home sales, starts and completions expected to come in around 30,000 annually in Ontario, according to the Canadian Centre for Economic Analysis (CANCEA). That will leave the province well short of the 1.5-million new home goal by 2031.

CANCEA’s modelling points to continued weakness in residential construction activity for roughly the next four to five years in Ontario, with starts and completions materially below the last decade’s norms.

The near-term consequence, CANCEA notes, is that roughly 35,000 residential construction workers in Ontario could be displaced on average, with displacement skewing heavily toward younger workers but with a meaningful share among older workers, which raises the risk of permanent skill loss.

Behavioural modelling done by CANCEA points to a deep and persistent slowdown. On an annual average basis, the expected scenario implies about 36 per cent fewer starts and 39 per cent fewer completions than the 10-year average.

Taxes Are Too High

To fix the problem, we must lower the tax burden on new housing so builders can build homes that people can afford. Taxes, fees and levies are too high, putting home ownership out of reach.

Taxes presently account for 36 per cent of the purchase price of a home. The federal and provincial governments are moving to provide some sales tax relief to first-time homebuyers, but the breaks must be extended to all buyers of new homes.

Runaway development charges (DCs), which have risen dramatically over the last two decades, also need to be reduced. DCs for a single-detached home in Toronto are around $125,000 while the average condo faces $130,200 in DCs.

The approvals process must also be digitized and simplified to speed up residential construction. In Toronto, it can take two years from the time a developer submits a building application to receiving approval.

Meanwhile, governments must do a better job of co-ordinating efforts around social housing and homelessness. They are both critical to the future, so we must have firm targets and a synchronized approach.

Finally, governments should concentrate their efforts on working with the private sector to fix what ails the industry, as private builders account for 90 per cent of housing supply.

A healthy residential construction sector is critical to the economic success of Ontario. The impact that the industry has on other sectors is enormous.

RESCON members alone directly employ more than 100,000 workers in Ontario and over 200,000 when indirect industries are included. The total size of the residential construction industry as an employer far exceeds other sectors such as steel, aluminum and auto manufacturing.

There is no time to waste. Fixes must be put in place now before it’s too late. There is no good reason to delay.