Ontario lowers its homebuilding projections
Ontario has scaled back its projections for new home construction over the coming years, raising doubts about the government's ability to meet its ambitious target of 1.5 million homes by 2031.
This year, the government expected 125,000 new homes but has now lowered its outlook to just 81,300, according to private-sector forecasts outlined in Ontario’s fall economic statement. The outlook for the next few years has also been lowered, with projections showing the strongest growth in 2027, when 95,300 homes are expected.
Ontario finance minister Peter Bethlenfalvy acknowledged the impact of economic conditions on housing development but stressed that the government is still committed to the overall target.
"High interest rates have had their impact, and that's cyclical, but we're not going to relent on putting in place the infrastructure necessary to get more built," Bethlenfalvy said.
Opposition leaders remained sceptical about Ontario’s ability to reach the 1.5 million home target. Liberal leader Bonnie Crombie argued that there’s “no conceivable way” the government can hit its goal, citing a lack of incentives for developers and a trend of construction workers leaving the province for more active markets in Alberta and British Columbia.
"I think there was great hope and promise we would actually build housing," Crombie said.
"This government came in with a lot of fanfare. There are no incentives to build homes. Developers aren't building homes. I'll tell you what's happening – construction workers are leaving the province of Ontario, and they're going to Alberta and they're going to BC because they are building homes there."
NDP leader Marit Stiles criticized the government’s priorities, highlighting how recent investments have gone toward projects like a potential tunnel under Highway 401 and amenities at Ontario Place, rather than housing.
"He's always got money and time to talk about a fantasy tunnel or a luxury European spa in downtown Toronto (at Ontario Place) that nobody asked for, but when it comes to building actual homes? Nada. Nothing. Zip," said Stiles.
"This was supposed to be this government's biggest priority. I can tell you, it is one of Ontarians' biggest priorities. Nothing here addresses that problem. In fact, I see them backing away, really backing away, reversing the course in terms of addressing the housing affordability challenge out there."
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While Ontario has committed billions of dollars to encourage home construction, including $1.6 billion in new funding for water and wastewater infrastructure, municipalities have voiced concerns over how their performance is measured in meeting housing targets.
Currently, eligibility for Ontario’s Building Faster Fund is based on the number of housing starts, but mayors of large cities argued that construction delays often stem from high interest rates, supply chain disruptions, and labour shortages, rather than permit issuance. Municipalities have asked housing minister Paul Calandra to measure progress based on building permits issued rather than housing starts.
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