We are embroiled in the worst housing crisis in generations. The housing targets are not being achieved. Housing projects are being put on hold. Turnover has fallen. And jobs are disappearing.
A report recently produced for RESCON shows that the number of new housing starts in municipalities in the Greater Toronto Area and Greater Golden Horseshoe fell by as much as 34 per cent in the first three quarters of 2025, compared to the January to September periods in 2021-2024.
The condo take-off took a much bigger hit. In the first nine months of 2025, they fell by a monstrous 51 percent compared to the same periods in the three previous years.
The downturn has translated into 35,377 fewer person-years in the past nine months.
It is crucial that we turn the tide. People are leaving our cities because they cannot find an affordable home to live in. Emigration will take a significant toll on our economy.
The good news is that solutions are within our reach. With that, I propose five ways to remedy the situation.
Reduce taxes and levies on new homes
First, we need to reduce taxes, fees and levies on new housing. They currently represent 36 percent of the purchase price of a home. On a $1 million home, $360,000 is due in the tax burden.
We tax new homes just like alcohol and tobacco. The difference is that housing is a basic need.
The federal and provincial governments have moved to eliminate the five percent sales tax on new homes up to $1 million for first-time buyers, and to reduce taxes on a sliding scale for first-time buyers on homes purchased between $1 million and $1.5 million. The province has committed to adapt to the federal discount, which would mean an additional eight percent discount on new homes for first-time buyers. Implementation is subject to the passage of federal legislation.
However, the federal legislation, known as Bill C-4, remains pending in the Senate. It was approved in the House of Commons and sent to the Senate, but before Christmas senators voted to postpone it until February 3. The Senate did not complete the review before it was postponed.
Limit development costs
Second, runaway development charges (DCs) must be reduced. DCs are collected from developers for new construction to help finance infrastructure and services such as roads, water, sewer, parks, public transportation and police. However, they are also used to finance projects such as daycare centers and schools.
Buyers of new homes should not be forced to pay for growth that benefits entire communities.
Over the years, these fees have increased significantly, worsening affordability. In Toronto, DCs for a one-bedroom apartment rose from $10,000 in 2014 to $52,000 in 2024.
Although the Ontario Housing Supply Task Force recommended action to curb escalating DCs four years ago, the issue has not been addressed.
Accelerate and modernize approvals
Third, the approval process should be simplified, accelerated and digitized on a common open source platform, as has happened in more advanced jurisdictions.
It takes far too long for projects to be approved. Currently, it can take up to two years from the time a developer submits a planning application and receives approval. Platforms like One Ontario offer a possible solution.
Better coordinate housing policy
Fourth, government efforts on social housing and homelessness need to be better coordinated.
Construction and housing could be aligned under a new super-ministry focused on growth management. Given the importance of housing and infrastructure to the future of the province, governments must adopt clearer accountability, targets and timelines, as is the case in other jurisdictions.
Restore the private market, not just public programs
Fifth, while off-site construction and the new Build Canada Homes initiative are important, they will not solve the problem alone.
Private sector builders are responsible for approximately 90 percent of the housing supply. It is therefore crucial that governments focus on removing the barriers that affect that market.
A coalition representing a broad range of industry stakeholders has been formed to call for broader sales tax relief, changes to development costs and faster planning approvals.
Without concerted action, the dire conditions in the sector will continue. Canada cannot compete with jurisdictions like the United States if housing does not remain competitive.
Richard Lyall is president of the Residential Construction Council of Ontario (RESCON). He has represented the construction industry in Ontario since 1991. Contact him at [email protected].
#OPINION #ways #tackle #housing #crisis