A coalition of development industry leaders is sounding the alarm about what was left out of this week's federal budget, suggesting the housing shortage will worsen due to a lack of programs to support construction.
The Large Urban Center Alliance, backed by the Building Industry and Land Development Association, said inaction would cost jobs as the construction sector pulls back on building new homes amid falling sales.
“Sales are dwindling across the country,” said Justin Sherwood, BILD’s chief operating officer. “If the (lack of) sales activity of the past few years permeates the system, we will end up with a situation where 100,000 people will have lost their jobs.”
BILD sees the situation as bleak and believes that the government is focusing too much on housing construction, which is likely to decline due to today's drop in sales, resulting in fewer units being built in the future.
Year-to-date sales are down 82 per cent in the Greater Toronto Area, 81 per cent in the Greater Golden Horseshoe Area, 67 per cent in Vancouver, 40 per cent in Calgary and 33 per cent in Edmonton, according to the group. Montreal condo sales are down 75 percent.
Sherwood said his group is seeking to expand the GST/HST rebate beyond just first-time buyers to all buyers and believes the federal budget language deviates from a commitment to reduce residential construction costs by 50 percent.
There was also widespread disappointment that the budget made no mention of a multi-family housing construction program (MURB), a popular policy from decades ago that the sector believes would recapitalize the industry.
Previous programs allowed investors to claim depreciation and certain other costs of a multifamily property against unrelated income, effectively incentivizing the construction of rental units.
The program is estimated to have helped finance the construction of about 195,000 units, which at the time cost $2.4 billion in lost tax revenue, Sherwood said.
“You will see a significant decline in housing starts and virtually no supply, setting the stage for further increases in affordability in the future,” he said.
While Sherwood's group was disappointed, Canada's largest residential landlord Starlight Investments sees upside potential in the budget, which will provide motivation to plan more development projects given the infrastructure currently planned.
The announcement of a new fund should encourage his industry to build more multifamily housing, even though his company is already actively involved in development, said Howard Paskowitz, vice president of development and public affairs at Starlight.
Ottawa's Build Communities Strong Fund, managed by Housing, Infrastructure and Communities Canada, proposes $51 billion in funding over 2026-27.
Paskowitz said linking it to community and regional projects will help spur development. “It all depends on how it is implemented and this requires strong coordination at all levels of government and the private sector,” he said. “Infrastructure is critical because without the ability to flush toilets, you can’t create a home.”
Hopes that the sector would get a demand-side boost from immigration were dashed by Ottawa, which said it would stabilize the number of permanent residents at 380,000 by 2028 and reduce new admissions on temporary permits from about 670,000 in 2025 to 385,000 in 2026.
“The biggest key to solving this crisis is increasing supply, and of course if you limit demand, that makes a difference as well,” said Paskowitz, who said the right kind of immigration will be to attract the labor to build those homes.
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