Ontario Construction News staff writer
Ontario’s fall economic statement lowers expectations for new home construction, signalling that the province’s 1.5-million-home goal over 10 years is no longer a firm commitment. At the same time, the government reaffirmed its focus on critical infrastructure investment to support long-term growth and economic stability.
Finance Minister Peter Bethlenfalvy acknowledged that the housing target has been “softened,” citing comments from Municipal Affairs and Housing Minister Rob Flack, who said the focus is now on getting “shovels in the ground faster.”
“The minister has communicated that the target there, he’s softened, said that target is no longer a hard target, but that we’re going to continue to move forward on building as many homes as we can,” Bethlenfalvy said.
The province now expects just 64,300 new homes to be built in 2024, down from 71,800 projected in the spring budget. Forecasts for upcoming years remain below the pace needed to meet the original goal, with 70,200 units expected in 2025, 79,600 in 2027, and 83,700 in 2028.
The government cited challenges such as rising material costs, tariff-related uncertainty, and broader economic pressures. “Private-sector forecasters continue to highlight the negative effects of tariff-related uncertainty and material cost increases on homebuilding,” the statement said.
NDP Leader Marit Stiles criticized the government’s shift, saying it represents a retreat from its housing commitments. “It looks like the government has thrown in the towel on building housing in the province of Ontario,” she said. “That also means construction workers are struggling to find work at a time when we know there is a housing crisis.”
Construction activity, particularly in condominiums, has slowed from a 2023 peak, though higher levels of purpose-built rental construction have partially offset the downturn.
Meanwhile, home resales are projected to decline eight per cent this year due to economic uncertainty, before rebounding by about 10 per cent in 2025. The average resale price is expected to drop 3.3 per cent this year and rise 2.8 per cent next year. The slowdown is expected to reduce land transfer tax revenue by $576 million compared to spring budget estimates.
Despite the weaker housing outlook, industry leaders expressed optimism about the government’s continued investment in infrastructure and skilled trades.
The Residential and Civil Construction Alliance of Ontario (RCCAO) said it welcomes the government’s commitment to advancing major projects and enabling legislation to remove the provincial portion of the HST on new homes for first-time buyers, in coordination with the federal government.
“RCCAO commends the Government of Ontario for staying the course on its economic priorities by continuing to invest in critical infrastructure, housing, and the skilled trades,” said Nadia Todorova, RCCAO executive director. “Advancing transformational projects such as the Ring of Fire, removing the provincial portion of the HST on new homes for first-time homebuyers, and ensuring Ontario has the skilled workforce needed for the future are crucial steps toward maintaining the province’s competitiveness and safeguarding it against economic uncertainty.”
RCCAO research shows that taxes at all three levels of government account for more than 30 per cent of the cost of a new home. Reducing that burden, the organization says, will help bring more housing to market while supporting the construction workforce.
The alliance also pointed to recent success with accelerated project delivery — such as the Gardiner Expressway rehabilitation — and encouraged similar approaches on other priority projects, including the Bradford Bypass and Highway 413.
“The province’s leadership made a real difference and should be replicated on the Bradford Bypass and Highway 413,” Todorova said.
RCCAO also praised the province’s continued focus on developing the Ring of Fire in Northern Ontario, which the group called a “generational project” with broad public support and major potential for economic growth.