TORONTO – Ontario is lowering its projections for how many new homes will get built in the province over the next few years, putting the government further off the pace needed to meet its target.
Premier Doug Ford has pledged to get 1.5 million homes built over 10 years by 2031, but Ontario has not yet met any of its annual targets toward that goal, though it came very close last year after it started counting long-term care beds.
This year’s annual target is 125,000 homes, but the government’s fall economic statement tabled on Wednesday shows it expects just 81,300, based on an average of private-sector forecasts.
In each of the next several years, housing starts projections have been lowered from the forecasts at the time of the spring budget. The strongest growth is expected in 2027, with an estimated 95,300 homes.
Government officials say even though interest rates have been coming down, it takes a while for that decrease to have an impact. They say they still expect to meet the 1.5 million homes target.
In the fall economic update, the government says that while progress on new home construction is being made, homebuilders across the province still face a challenging economic environment, including high interest rates.
The government has established various funds worth several billion dollars to help spur home construction, including incentives for municipalities and money to get housing-enabling infrastructure such as water and wastewater lines built.
The spring budget contained $1.6 billion in new money for housing-enabling infrastructure. Municipalities have described a lack of new water lines and roads as a hurdle to building new housing, and they can use the funds for such projects.
But municipalities have complained about how their progress is being measured toward the Building Faster Fund, which gives extra funding to certain communities if they exceed or get close to targets the government has assigned.
Municipalities have asked Housing Minister Paul Calandra to base their eligibility for the fund on how many building permits they issue, rather than on the number of housing starts. Once a permit is issued, developers may not start construction because of high interest rates, supply-chain issues or labour shortages, big city mayors say.
This report by The Canadian Press was first published Oct. 30, 2024.
