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Global News
7 days ago
- Business
- Global News
‘Sales have stopped': Ontario developers predict layoffs if cost to build doesn't fall
A developer lobby group is renewing calls to introduce tax cuts for new projects as housing starts continue to slow, warning that if something doesn't change, tens of thousands of jobs could be at risk. On Monday, the Building Industry and Land Development Association released a brief calculation considering how far new home construction could fall and how many jobs could be lost if the sale of new homes remains low. So far this year, new single-detached family homes sales are down 50 per cent in and around Toronto, while condo sales have dropped 65 per cent compared to last year. 'We are seeing sales have stopped,' President and CEO of BILD Dave Wilkes told Global News. 'Without sales, you don't have that ability to undertake new projects, to make those investments, to provide those well-paying jobs the sector is known for.' Story continues below advertisement A research brief prepared for the advocacy group by Altus Group found that if housing starts remain low, they could bottom out at 4,000 new single-family homes per year and 10,000 new apartments. 'Importantly, this is not a forecast or projection; there may be many reasons why sales will recover,' a note of caution in the paper explains. If home sales do not recover, however, the research suggested tens of thousands of construction jobs could be on the line. It found 40,000 direct homebuilding jobs could go, as well as 30,000 construction supply chain jobs. The prediction comes in contrast to concerns only a year ago, when a labour shortage was cited as one reason for growing housing costs in Canada. 'That's how quickly the market has turned, unfortunately,' Wilkes said. 'We've seen a number of factors that created the challenges, and we see a number of solutions that can get us out of this. The market really did turn as interest rates went up, as we saw some instability in the geopolitical environment and the challenges that that created.' Get daily National news Get the day's top news, political, economic, and current affairs headlines, delivered to your inbox once a day. Sign up for daily National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy He said that while costs like borrowing, materials and labour have now dropped as interest rates begin to fall again, a nervous market is being stalled by taxes and fees. 'What we have now is a cost-to-build crisis as the market has reset, where the price points are too high for individuals to be able to afford, despite the other adjustments,' he said. Story continues below advertisement BILD is using the potential labour shortage and slow market to ask for more financial relief for the development sector. It is calling for the federal and provincial governments to waive the harmonized sales tax on all new developments, rather than a few specific categories. It's a move BILD said would cost around $2 billion for the federal government and $900 million for Ontario. 'There's projects being completed now, but once those projects get completed in '26 and '27, there is gonna be a real lack of jobs, lack of investment, lack of a new activity, and lack of delivery of new homes in '28 and '29,' Wilkes added. Reducing the burden cost of taxes on builders has been a central request from the development community for years and has grown louder as new housing starts have slowed. Recent provincial legislation made major changes to the fees homebuilders pay to towns and cities, also reducing some of the approvals they have to go through. It remains to be seen how effective those changes are, with government-controlled fees making up less than a third of the cost of building a home. Figures prepared to brief Ontario Housing Minister Rob Flack, obtained by Global News, show soft costs like taxes don't make up much more of the new cost of a home than developer profit does. Story continues below advertisement The graphic shows that 10 to 20 per cent of the cost of building a new home is developer profit, while 10 to 30 per cent is soft costs. A further 10 to 20 per cent is land and 50 to 70 per cent is hard costs like materials and labour. View image in full screen Data presented to Ontario's housing minister. Global News 'Projected profit margins generally must be >10% for a housing development to be viable,' the briefing explained. Wilkes said developers need a certain profit margin to ensure they can secure loans and financing, pointing out the slowing market had already forced some to accept lower profits. 'The market is forcing those adjustments in profit — we always argue it is a 10 to 12 per cent range,' he said. 'Do we need to? The market is forcing that decision. Now, government — through development charges (provincial sales tax), (goods and services tax) — is making more on a house, many more fold, than the developer.' Story continues below advertisement A spokesperson for the Ministry of Municipal Affairs and Housing indicated the Ontario government could be open to the move. 'We have been clear – we need partnership from the federal government to continue reducing HST and GST on homes,' they wrote in a statement.
Toronto Star
15-06-2025
- Business
- Toronto Star
Ottawa's GST/HST relief for first-time new home buyers is a broken promise — and too little, too late for GTA
Two weeks ago, the federal government unveiled a measure designed to improve housing affordability: a targeted GST/HST rebate for first-time buyers of newly built homes. Unfortunately, this narrowly focused policy is not just inadequate, it's a broken promise decades in the making. The new proposal offers a full GST/HST rebate for first-time buyers of new homes up to $1 million, with a partial rebate for homes priced between $1 million and $1.5 million. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW While this may sound generous on paper, it ignores the reality for hundreds of thousands of Canadians in the Greater Toronto Area (GTA) and lower mainland British Columbia, where average prices for new homes exceed these thresholds. In practice, very few buyers in these two key regions will benefit. The Building Industry and Land Development Association (BILD) has made its position clear: this initiative is both geographically biased and far too narrow in scope to meaningfully impact affordability. But what makes this situation worse is the federal government's failure to uphold a commitment it made to Canadians more than three decades ago. When the new GST was being designed in late 1980s, very specific thought went into how the tax would apply to new homes and how the rebate structure would be put together to ensure that the tax would not impact affordability. Business Opinion What's behind the GTA's housing crisis? Two studies shine a light on the problems By addressing approval delays, reducing municipal fees, and focusing on construction of homes, A federal technical paper released in 1989 by then-Finance Minister Michael Wilson outlines those homes under $350,000 would receive a rebate of up to 36 per cent of GST paid, tapering off to zero at $450,000. As seen on Page 19 of this technical paper, the government also committed to reviewing and adjusting these thresholds every two years to keep pace with economic and housing market conditions. That review and adjustments never happened. At the time, the government estimated that 95 per cent of new homes would qualify for at least a partial rebate, with 90 per cent receiving the maximum. This promise helped sell the tax to Canadians with the reassurance that GST would not be a barrier to home ownership. Today, that assurance rings hollow to buyers in the GTA, where average new home prices have long since eclipsed those 1990s thresholds and so now virtually no homes in the region qualify for a rebate. What was supposed to support 95 per cent of new homebuyers now supports close to 0 per cent. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW According to Canada Mortgage and Housing Corporation (CMHC), the average price of a single-detached home in Ontario has increased from $276,000 in 1990 to $1,023,000 in 2023, an increase of 270 per cent. Over the same period, the net federal HST collected on these homes increased by 479 per cent, from $8,832 to more than $51,000. This isn't just a statistic; it's a growing burden. That additional $43,000 in taxes, when rolled into a standard 25-year mortgage at 4 per cent, results in an extra $220 in monthly payments, $24,000 in additional interest, and a total financial hit of more than $66,000 over the life of the loan. And that's for a typical new home, not a luxurious mansion. In fact, by failing to update the rebate thresholds as promised, the federal government has quietly extracted nearly $4 billion in additional GST/HST revenue from new homebuyers in Ontario alone — most of it in just the last decade. Business Opinion Sky-high development charges make new home building in the GTA near impossible. Here's what needs to change Failure to cut building costs by modernizing the Development Charges Act, writes Dave Wilkes, The federal government's recently proposed GST/HST relief on new homes for only first-time buyers does not even begin to address the real problem. First-time buyers represent just five-to-10 per cent of new home purchases in the GTA. The rest, like young families upsizing and seniors downsizing, get no help. Plus, the proposed program is geographically biased, as the average price for a condo in the GTA is more and $1 million and the average price of a single-family home (including townhouse and semis) is more than $1.5 million — meaning even those who qualify in the GTA will receive less relief than buyers in lower-cost markets, despite paying more for the same (or lesser) product. The government acknowledges that GST/HST contributes to unaffordability but stops short of meaningful action, so if the federal government is serious about addressing the housing crisis, it needs to start by removing the barriers it helped build. This means expanding GST/HST relief to all new home buyers, not just first-time buyers, and adjusting the rebate thresholds to reflect today's housing markets across the country. This isn't radical, it's simply delivering on a promise made in 1989 and long overdue.
Hamilton Spectator
31-05-2025
- Business
- Hamilton Spectator
Toronto-area new home sales are worse than during the 1990s housing market crash
New home sales in the Toronto area marked a seventh consecutive month of record all-time lows, eclipsing the 1990s downturn when the housing market crashed. During the 1990s housing crash — which lasted roughly from 1989 to 1996 — at the bottom of the market there were six consecutive months of record low sales, and sales were around double what they are today, according to the Wednesday report from the Building Industry and Land Development Association's (BILD), which called on the federal government to expand its GST relief to all new home purchasers. There were 310 new home sales in April, down 72 per cent from April 2024 and 89 per cent below the 10-year average. Historically, new home sales for a typical April in the GTA would be 2,750 units based on the previous 10-year average. 'April 2025 new home sales across the GTA have extended the slowest period of sales on record,' said Edward Jegg, research manager at Altus Group, BILD's source for new home market data. 'Buyers crave predictability and the swirling uncertainty around the impact of possible tariffs is depriving would-be purchasers of the confidence they need to move ahead.' Broken out by housing type, condos performed the worst with 105 units sold in April, down 80 per cent from April 2024 and 94 per cent below the 10-year average. Condos include units in low, medium and highrise buildings. There were 205 single-family home sales in April, down 66 per cent from April 2024 and 77 per cent below the 10-year average. Single-family homes include detached, linked and semi-detached houses and townhouses. The benchmark price for new condos was $1.019 million — down 3.6 per cent over the last 12 months; while the benchmark price for new single-family homes was $1.53 million, down 5.4 per cent over the last 12 months. Total new home remaining inventory decreased slightly compared to the previous month. The inventory level — the time it would take to sell inventory on the market based on current demand — is 15 months. A healthy market level is around nine to 12 months. 'Because of the time lag between sales, starts and then finally adding new home supply to existing housing stock, the public is insulated at present from the magnitude of what is unfolding in the GTA market,' said Justin Sherwood, senior vice-president of communications, research, and stakeholder relations at BILD. 'The new housing industry is decelerating quickly and a massive supply deficit in the 2027 to 2029 period is taking shape.' The number of completed condo units in the Greater Toronto and Hamilton Area will plummet after 2025 , which is set to achieve the highest number of completions at 30,793, according to real estate research firm Urbanation. But in 2028 the number of forecasted completions is 9,561. BILD argues to build more housing, the federal government must expand its GST cut for all home purchasers, not just first-time homebuyers. On Tuesday, the Liberals tabled legislation for a GST cut limited to new homes under $1 million for only first-time buyers (saving up to $50,000), while lowering the rate for first-time buyers of homes that cost between $1 million and $1.5 million. 'Yesterday the federal government tabled its proposed measures to provide GST(HST) relief to first-time new home buyers. Unfortunately, this limitation to first-time buyers only will have a very small impact, as a very few new home buyers are first time buyers. It will not substantially help address affordability, nor will it help significantly stimulate sales and construction,' Sherwood said.
Toronto Star
31-05-2025
- Business
- Toronto Star
Building Industry Leaders Issue an Open Letter to Prime Minister Carney on GST Rebate Commitments
Toronto, May 28, 2025 (GLOBE NEWSWIRE) — Greater Toronto Area, May 28, 2025 – Yesterday at 2:30PM EST, key leaders from the building and development industry issued an open letter to Prime Minister Carney regarding the urgent need for federal action on the GST rebate and Canada's housing crisis broadly. The letter calls on the federal government to move with speed to combat market uncertainty and asks that: The GST rebate thresholds are adequate to deal with high value jurisdictions like the Greater Toronto Area and the Lower Mainland of BC; The GST exemption apply to all new home purchasers, not simply first-time buyers; The government update the existing GST rebate mechanism and simply adjust the dollar thresholds rather than come up with a completely new framework; and The government commits to regularly index the GST rebate thresholds. Later that afternoon, the federal government tabled a proposal to introduce a new GST rebate for first-time home buyers. While we are pleased that the federal government is moving quickly, the measures will provide limited, if any, benefit for buyers in large urban centres such as the GTA and Lower Mainland BC. We strongly encourage the government to incorporate the recommendations in the open letter, particularly the recommendation to retain the existing GST New Housing Rebate structure and eligibility criteria without adding a first-time homebuyer restriction. ARTICLE CONTINUES BELOW The letter was signed by leaders from: BILD (Building Industry and Land Development Association), Canmore Community Housing, Canadian Home Builders' Association, Habitat For Humanity Canada, Missing Middle Initiative, Options for Homes, Polygon Homes Ltd. and Wesgroup Properties. Read the entire letter: Dear Prime Minister Carney, We want to congratulate you on your election as Prime Minister of Canada and on the appointment of your new Cabinet. We are looking forward to working with your government towards the common goal of increasing annual housing starts to 500,000 units and supporting a sustainable housing market. We write to you today to propose that the federal government immediately follow through with a revised version of the campaign promise of enhancing the existing GST new housing rebate, which was referenced as a priority in today's Speech from the Throne. An enhanced rebate would help lower the cost of ownership, increase housing supply, enable residents to live in right-sized homes, and move the nation closer to its goal of starting construction on 500,000 new homes annually. Canadians welcomed and embraced the focus on housing affordability during the election in the interest of housing availability, affordability, and job creation. Yet, housing starts for owner-oriented homes continue to fall. In 2024, Canada recorded just 132,000 such starts, the second-lowest since 2001, and down over 20% from 2021. The outlook is worsening: first-quarter 2025 starts are down over 25% year-over-year, hitting their lowest point since the Financial Crisis. Pre-construction condo sales have nearly disappeared in Greater Vancouver and Greater Toronto, indicating further declines ahead. Canada faces a cost-of-delivery crisis in new home construction. The Liberal platform rightly identified 'lowering the cost of homebuilding' as a key priority. While many cost drivers lie outside federal control, the GST is a notable exception. Applied only to new homes, the GST undermines affordability. When introduced in 1991, the federal government provided a rebate that covered over 95% of new homes for all new home buyers. But because the thresholds were never indexed to inflation, most new homes no longer qualify, especially in high-cost regions, where affordability is most strained. This impacts not only new home prices but also resale and rental markets by reducing housing options. There is an opportunity and need to ensure the GST rebate will address the affordability crisis for all buyers, not just those purchasing new homes for the first time. If an adjustment to GST exemptions applies only to first-time buyers, it excludes key groups like seniors looking to downsize, transactions that free up family-sized homes. Perversely, it could reduce the construction of new affordable supply, as potential first-time homebuyers may be reluctant to use their eligibility on a smaller unit, instead saving it up for a more expensive, family-sized home down the road. This also reduces the incentive for those who purchase pre-construction condos, which are essential for developers to move forward with projects and provide much-needed privately-owned rental homes at completion. We urge your government to redesign its proposed enhanced GST new housing rebate with four key principles in mind: speed, simplicity, supply, and sufficiency. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW Speed: The rebate should be implemented immediately to counter the ongoing decline in non-rental housing starts and prevent buyers from delaying purchases. We urge you to announce an effective date, as soon as possible, with the rebate applied retroactively to that date. Simplicity: The design should align with existing business practices and avoid complex, time-consuming changes for governments and industry. Supply: New condo supply will not be created in some regions until the market absorbs the existing inventory of under-construction and complete but unsold units. Sufficiency: The rebate must be large enough to support the federal goal of 500,000 housing starts per year, with thresholds high enough to ensure no region is excluded. With speed, simplicity, supply, and sufficiency in mind, we propose the following recommendations to the federal government: Implement immediate reforms to the existing GST/New Housing Rebate. Retain the current structure and eligibility criteria, without adding a first-time homebuyer restriction. Raise the lower threshold from $350,000 to $1,000,000 and the upper threshold from $450,000 to $1,500,000. Increase the maximum rebate from 36% to 100% for homes where possession and ownership transfer on or after July 1, 2025. The rebate must apply to homes that are currently under construction and those that are complete and unsold, to ensure the next round of construction can occur as quickly as possible. Commit to further enhancements. Recognize that even these thresholds may not fully address affordability in high-cost regions or future price growth. Implement threshold increases now and launch consultations on inflation indexing and regional adjustments. Encourage provincial action. Urge provinces to adopt or expand similar rebates, including relief from sales taxes and land transfer taxes on new homes. GST relief was a central part of the Liberal platform, your post-election commitments and addressing the housing affordability crisis facing our country. Acting quickly will complement your middle-class tax cut and show your government's practical, results-driven approach to one of Canada's most urgent challenges. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW We welcome the opportunity to support your team on implementation and look forward to working together to increase housing starts and improve affordability nationwide. We would request the opportunity to meet with you at your earliest convenience to further discuss the impact of these proposals and the need to act with urgency. Sincerely, Dave Wilkes, President & CEO, Building Industry and Land Development Association Kristopher Mathieu, AT., PMP., Executive Director, Canmore Community Housing Kevin Lee, CEO, Canadian Home Builders' Association Pedro Barata, President & CEO, Habitat For Humanity Canada Dr. Mike Moffatt, Founding Director, Missing Middle Initiative Daniel Ger, CEO, Options for Homes Robert Bruno, Executive Vice President, Polygon Homes Ltd. Beau Jarvis, President & CEO, Wesgroup Properties -30- With more than 1,000 member companies, BILD is the voice of the home building, residential and non-residential land development and professional renovation industries in the Greater Toronto Area. The building and renovation industry provides 256,000 jobs in the region and $39.3 billion in investment value. BILD is affiliated with the Ontario and Canadian Home Builders' Associations. For additional information or to schedule an interview, contact Janis McCulloch at jmcculloch@ (416-617-7994)
Hamilton Spectator
30-05-2025
- Business
- Hamilton Spectator
2025 BILD Awards celebrate home building excellence in the GTA
Toronto, May 30, 2025 (GLOBE NEWSWIRE) — Greater Toronto Area, May 30, 2025 – The Building Industry and Land Development Association (BILD) recognized excellence in the design, construction, marketing and sales of new homes in the Greater Toronto Area (GTA) at its 2025 BILD Awards Gala, held on May 29. BILD presented 50 awards in the categories of architecture, design, marketing, people and sales, and in the prestigious project and builder categories. A group of 51 expert judges from across North America determined the winners from over 700 submitted entries. 'The BILD Awards is one of the largest and most prestigious awards programs of its kind in North America,' said Dave Wilkes, BILD President & CEO. 'This year's winners truly exemplify outstanding innovation and showcase the excellence of the building industry in the Greater Toronto Area.' Howard Sokolowski, Founder and CEO of Metropia, received BILD's Lifetime Achievement Award. It is the highest honour BILD can present to a member, recognizing those who have dedicated a lifetime to the association and the industry and demonstrated significant leadership and commitment to the greater good. Mr. Sokolowski has been at the forefront of Canada's development industry for over 30 years. One of the most trusted and influential industry leaders, he is renowned for building iconic communities that residents are proud to call home. The Daniels Corporation was named Home Builder of the Year, Mid/High-Rise, while Great Gulf received the title of Home Builder of the Year, Low-Rise. The Home Builder of the Year categories recognize builders who set the standard for the rest of the industry through their professionalism and dedication to excellence. A key component of the judging process is a customer satisfaction survey, which ensures that the end user's experience is factored into the award criteria. The winners of the top project and builder categories include: In addition, Brixen Developments' Exhale Residences designed by Architecture Unfolded received the People's Choice Award, which is voted by the public. For a full list of BILD Awards winners, visit . . With more than 1,000 member companies, BILD is the voice of the home building, residential and non-residential land development and professional renovation industries in the Greater Toronto Area. The building and renovation industry provides 256,000 jobs in the region and $39.3 billion in investment value. BILD is affiliated with the Ontario and Canadian Home Builders' Associations. -30- For additional information or to schedule an interview, contact Janis McCulloch at jmcculloch@ or 416-617-7994.
