Despite a growing population, a strong market for new homes and falling interest rates, Ontario Premier Doug Ford’s government is floundering to meet the province’s demand for more housing.
As CBC News reported last month, Ontario housing starts between April and September 2024 plummeted 17% from the same period in 2023. Plus, the provincial government, as part of its fall economic statement, chopped its forecast for 2024 housing starts down to just 81,000, well below its previously stated target of 125,000 housing starts for the year.
Further, recent CMHC data reveals that Ontario housing starts between January and October 2024 fell by 13,000 units compared to the same period in 2023. Again, that’s despite the ambitious construction targets set by the province.
Ontario Housing Minister Paul Calandra still insists that the province has “absolutely not” given up on its goal to build 1.5 million new homes by 2031. To achieve that goal, Ontario would have to construct an average of 250,000 homes annually over the next six years.
But, as the CBC noted, the updated projections in the government’s fall economic statement indicate that the province will not even reach 100,000 new homes annually for at least the next three years. Indeed, the province’s projected housing starts for each of those years are steadily falling, not rising.
Moreover, Ontario is lagging most other provinces when it comes to building new homes for people who need them. In a recent study, Canadian economist Mike Moffatt found that Ontario ranked a poori eighth among provinces in constructing homes for new residents.
Specifically, the study found that just 29 homes or apartments were started for every 100 newcomers to the province over the past six years. That stands in contrast Canada’s top-performing province, Quebec, which has seen 47 housing starts per 100 newcomers over the same period.
Ford government officials have largely blamed high interest rates for the slowdown in home construction. But that slowdown has continued, and even worsened, as interest rates have dropped in recent months. Indeed, the Bank of Canada has cut Canada’s key interest rate five straight times over the past year.
Plus, out to the west, Alberta actually set a provincial record for housing starts in the first half of 2024 in the exact same economic environment. So that excuse just won’t fly.
"We are one province in a confederation that all faces the exact same interest rates," Liberal MPP Adil Shamji told the CBC. "Other provinces are seeing considerably more success."
So, instead of making excuses for its housing failures or handing our lucrative subsidies to Ford’s favourite private developers, what should his government do to spur housing construction?
Well, for one thing, it could speed up building approvals. That’s what Alberta has been doing.
"In the [Greater Toronto Area] it takes around 20 months on average," the CBC’s Shannon Martin explained. "In Alberta, approvals in Edmonton and Calgary happen in under six months."
Second, the Ontario government could encourage further “densification” of urban and suburban areas through zoning changes. That’s what Ford’s own housing task force recommended back in 2022.
"We need to legalize building mid-rise multiplexes, small apartments in far more places than they're allowed today," Eric Lombardi, founder of the advocacy group More Neighbours Toronto, told the CBC.
Third, Ontario could simply build more housing itself. In particular, the province could build more affordable housing, including social housing and purpose-built rental housing. That was a key recommendation advanced by the University of Toronto’s School of Housing In a comprehensive report last June.
"Government has to get back in the business of building the truly, deeply affordable homes and alternatives that people need," NDP Leader Marit Stiles told the CBC. "[The Conservatives'] plan is not working. They blame everyone else and every other level of government. But they have failed Ontarians."
Finally, the province could foster greater collaboration with municipalities and developers to address the crisis. That might help the real estate industry come up with new ways to build and finance housing.
“The province of Ontario, along with Ontario municipalities, needs to enact a series of substantial reforms, from zoning to development charges, if they have any hope of solving the housing crisis,” Moffat said.
But all these steps require a provincial government that’s actually committed to solving Ontario’s housing crisis. And that commitment appears sorely lacking from Doug Ford’s government.
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