Michael Lewis
Special to Canadian Design and Construction Report
Speakers at the Residential Construction Council of Ontario’s fifth annual online housing summit are pressing for urgent government action to stimulate infrastructure investment and new home construction as a severe slump in housing starts poses risks to future supply.
Economists, industry insiders, and political leaders emphasized the need to reduce bureaucratic hurdles and speed up building approval times. They said home development charges including taxes and fees must be brought down while provincial and federal investment in housing-related public infrastructure should increase.
Municipalities also need to step up zoning reforms and land allocations, summit participants heard.
‘The math ain’t mathing’: Experts despair as housing crisis deepens, RESCON summit hears
Carl Haas, a research chair and professor at the University of Waterloo, added that technologies such as AI, human-robotics systems and offsite modular construction can reduce costs and improve productivity in Ontario’s construction sector to ramp up supply of affordable housing.
And Rob Flack, the province’s Minister of Municipal Affairs and Housing, told the RESCON-hosted Housing Summit 5.0 that another factor has contributed to the slowdown in Ontario home sales and new construction — U.S. president Donald Trump.
“The uncertainty because of Trump down below has really caused uncertainty not just in the housing market but in our economy,” he told the summit, adding that people who were thinking of upgrading or renovating or buying a new home have hit the pause button as a result.
There is also a perception among consumers that house prices could fall further and that cuts in taxes on new homes may be on the horizon, said Mike Moffatt, an economist and founder of the University of Ottawa’s Missing Middle Initiative.
“There is a lack of urgency because they think incentives are coming.”
Canada Mortgage and Housing Corp. senior economist Ted Tsiakopoulos added that the move away from free global trade that began over a decade ago has hit construction supply chains while helping to make economic stagflation a real threat for developed economies.
“There are some mega-trends here that could keep inflation elevated – a more disrupted world politically and commercially via trade wars. I’m not sure I have faith in the U.S. dollar as I have in the past.”
Tsiakopoulos said he expects trade frictions and disruptions will persist, making inflation “quite sticky” and keeping upward pressure on mortgage rates and the cost of capital for builders.
He noted, however that U.S tariffs on Canadian goods used in construction have been pulled back since April while interest rates and the prices of some U.S.-sourced building materials have moderated.
“Ultimately, nobody knows. There is very little certainty in this kind of environment,” Tsiakopoulos said, suggesting that Canada needs a new business model to diversify trade and boost transatlantic flows with Europe.
The summit, under the title Embracing Transformation: Building Homes Faster and sponsored by organizations including the Toronto Real Estate Board and LiUNA Local 183, followed release of a report that gave most municipalities in the Greater Golden Horseshoe, including the City of Toronto, a failing grade when it comes to meeting their housing targets.
It said housing starts are plummeting in both high rise and ground level construction and not just in the downtown Toronto condominium market.
In Toronto, starts in the first six months of 2025 were down 58 per cent and sales declined 91 per cent compared to the same period between 2021-24, causing employment to fall by an estimated 10,209 jobs, the report said.
In the first of what are planned to be quarterly reports prepared for RESCON and based on sources including CMHC data, the initial report found that housing starts were down 40 per cent in the 34 municipalities analysed.
Summit participants noted that the oversupply of inventory in the resale market will eventually be absorbed as mortgage rates decline and Ontario’s population grows, with August sales in Ottawa already at a five year high.
There is also promise in modern technologies that are being used to improve building efficiency, although challenges remain.
Low-rise modular homes constructed offsite have contributed to the increase in affordable housing supply across various global jurisdictions, but Haas noted that investors in this region seek higher levels of certainty before committing capital to the development of prefabrication factories.
He said robotics can make building safer and more efficient with some pilot projects showing how robots can be used as on site as assistants to do “grunt work,” while allowing skilled tradespeople to perform higher-end planning tasks.
Also, artificial intelligence can handle scheduling and other administrative tasks in the building sector but warned that AI-generated data should be closely monitored due to potential liabilities if, for instance, construction blueprints are inaccurate.
Dan Williams, Alberta’s Minister of Municipal Affairs, told the Sept. 24 summit that the province, which is building three times the number of homes per capita compared to Ontario in part due to lower taxes and charges, has no problem with federal policies to promote modular home construction.
“I’m happy to see market needs dictate,” he said, suggesting that government regulations can interfere with the ability of builders to adopt the fastest and lowest-cost methods to deliver housing.
“This is one of those ones were (government) getting out of the way is probably more effective.”
