BILD: Our housing industry could use a boost

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Housing supply, construction employment and economic activity in the GTA are all at risk

An article released earlier this month by Altus Group, prepared for the Building Industry and Land Development Association (BILD) and the Ontario Home Builders’ Association, indicates that without significant intervention to jump-start the housing sector, almost 50 per cent of residential construction sector jobs in the Greater Toronto Area (GTA) are at risk.

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The report further outlines, by 2027, housing starts could drop by more than 60 per cent and construction investment will decrease by over $10 billion in the region versus 2024 levels. This data adds to a growing body of research that points to the need to urgently cut the GST/HST on all new homes.

Based on other analysis undertaken by the Missing Middle initiative, we now know the costs for the provincial and federal governments to mitigate against this risk by eliminating the GST/HST on new owner-occupied housing and substantially renovated homes could go a long way to jump-start the sector and treat the new home buyers of today more equitably.

The Altus paper, published June 23, provides analysis on the need to increase the urgency of addressing barriers (such as excessive government taxation) now, before these longer-term implications on the pipeline of construction, and ultimately on jobs and the broader economy, set in.

The work undertaken by the Missing Middle Initiative, an Ottawa-based think tank, analyzed the costs of expanding the GST/HST exemption to all new owner-occupied housing, rather than the very narrow current federal government approach.

The think tank estimated the total cost to extend GST/HST relief to all owner-occupied new home purchases to be $2 billion nationally and $900 million provincially.

This one measure taken in tandem by the provincial and federal governments can immediately lower housing costs, jump-start demand, and protect against future supply shocks that spike prices.

Parking the generational equality and affordability issues, it is important to remember that the government cost estimates are province-wide and nationwide, with housing starts in the GTA being approximately 20 to 25 per cent of the national average and 40 to 45 per cent of the provincial average.

That means the cost to protect 41,000 jobs, 23,000 annual starts, and over $10 billion in investment — with all the spinoff associated with that — is less than a billion dollars; if this were any other industrial sector, this wouldn’t even be a question.

Housing is not a just-in-time product — the pipeline is long. Regulators observing lagging indicators of sector health are looking in the rearview mirror and risk missing the opportunity to effect change to avoid a looming crisis.

The time for action on the GST/HST exemption for all new housing, both provincially and federally, is now.

Dave Wilkes is President and CEO of the Building Industry and Land Development Association (BILD), the voice of the home building, land development and professional renovation industry in the GTA. For the latest industry news and new home data, visit www.bildgta.ca.