More home builders needed to meet targets
October 12, 2022
Earlier in 2022, the Canada Mortgage and Housing Corporation (CMHC) stated Canada needs at least 3.5 million new homes to meet population growth by 2030. In an updated study released October 6, 2022, CMHC said Canada lacks the labour necessary to deliver.
CMHC found there will only be enough labour to increase the number of starts in four major provinces—Ontario, Quebec, British Columbia and Alberta—by 30 to 50 per cent, or to just 1.2 million total new housing units by 2030.
While Alberta could meet its needs, the other large provinces would fall well short.
“Ontario, Quebec and B.C. will have to double the number of starts that they can produce under best-case scenarios [to meet the target],” the report found.
In Metro Vancouver, B.C.’s largest market, townhouse starts are down 24 per cent through the first eight months of 2022, with condominium starts down 42 per cent—both compared to a year earlier.
Starts of new condominium buildings in Greater Toronto have also been put on hold as builders face rising input costs and a slowdown in pre-sale activity this year.
Dana Senagama, CMHC economist and author of the report, said CMHC knew Ontario and B.C. were facing challenges but was surprised by the severity.
“The biggest surprise was the magnitude in terms of the challenge that lies ahead for all these large provinces going forward,” Senagama said.
If current rates of new construction continue, CMHC said Canada’s housing stock is expected to increase by just 2.3 million units by 2030, reaching close to 19 million units total.
BuildForce Canada, a construction sector industry group, projects these market challenges could persist through the forecast period due to a strong residential construction market and a growing pipeline of major projects that are not expected to slow until 2026. Demographic trends will also be a factor, BuildForce executive director Bill Ferreira told the Financial Post.
“The latest census data points to the fact that 20 per cent of Canada’s population is between the ages of 50 and 64,” Ferreira said. “And only 16 per cent are under 50. So when we start looking and projecting out over the next 15 years, we know more people will be leaving the labour force to retire than coming into the labour force.”
Kevin Lee, chief executive of the Canadian Home Builders’ Association, said prefabricated construction was a possible solution to the shortage of skilled labour.
“Whether we call it prefabricated construction or factory-built construction, the idea is that you’re building either modules or panels in a factory that can then be shipped on site,” Lee said.
