Housing Sector at Risk: 50% of Residential Construction Jobs in GTA at Risk without Intervention

Strategic Insights -

The building industry is facing a significant threat in the Greater Toronto Area (GTA), with almost 50% of residential construction sector jobs at risk without significant intervention. According to a report by Altus Group, prepared for the Building Industry and Land Development Association (BILD) and the Ontario Home Builders' Association (OHBA), housing starts could fall by more than 60% by 2027 compared to 2024 levels, and construction investment could drop by over $10 billion in the GTA. The report highlights the need for urgent action to cut the GST/HST on all new homes, with estimates suggesting that this could cost the provincial and federal governments $2 billion nationally and $900 million provincially.

Key Takeaways:

  • Without significant intervention, almost 50% of residential construction sector jobs in the GTA are at risk, affecting 41,000 workers.
  • Housing starts could fall by more than 60% by 2027 compared to 2024 levels, with construction investment potentially dropping by over $10 billion in the GTA.
  • The report estimates that eliminating the GST/HST on all new owner-occupied housing could cost the provincial and federal governments $900 million provincially and $2 billion nationally.
  • The Ontario Home Builders' Association (OHBA) estimates that extending GST/HST relief to all owner-occupied new home purchases could protect at least 41,000 jobs, 23,000 annual starts, and over $10 billion in investment in the GTA.
  • The report emphasizes the need for urgent action to address barriers, including excessive government taxation, to mitigate against the risk of a housing market crisis.

Statistics:

  • 41,000 workers in the GTA are at risk of job loss without significant intervention in the housing sector.
  • Housing starts could fall by 62% by 2027 compared to 2024 levels.
  • Construction investment could drop by $10.3 billion in the GTA by 2027.
  • Extending GST/HST relief to all owner-occupied new home purchases could cost the provincial and federal governments $900 million provincially and $2 billion nationally.
  • The GTA accounts for 20-25% of national housing starts and 40-45% of provincial housing starts.

Sources:

  • Altus Group's article for BILD and OHBA
  • Altus Group's paper on the need for government intervention in the housing sector
  • Ontario analysis on the cost of extending GST/HST relief to all owner-occupied housing
  • Federal analysis on the cost of extending GST/HST relief to all owner-occupied housing
  • Ontario Home Builders' Association (OHBA) estimates on the impact of extending GST/HST relief on the GTA housing market