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Canada plans to double homebuilding in decade, but where are the workers? -Breaking

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© Reuters. FILE PHOTO – A construction worker is working on a house that’s being constructed in Vaughan (Canada) north of Toronto, Canada. June 29, 2015. REUTERS/Mark Blinch/File photo

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Julie Gordon, Nichola Saminather

OTTAWA, (Reuters) – Canada’s ambitious plans to increase homebuilding in Canada within a decade are proving difficult. The country is currently facing the most competitive labor market ever recorded and construction has reached a multiyear high.

In the Thursday budget, Prime Minister Justin Trudeau’s Liberal government outlined a critical peg for C$9.5billion ($7.5billion) in housing spending.

Due to record low interest rates, tight supply and an increase in average home prices across Canada, the difference has been more than half a million dollars. Construction has not kept up with the immigration-driven population increase.

However, the idea of building hundreds of thousands more homes goes against the fact that most home construction is done by municipal or provincial governments. The federal government does not have much to do with it.

“It is very ambitious. Robert Kavcic (senior economist, BMO Economics) said that it will be just as difficult to accomplish it. This is because the construction industry is more or less at its full potential.”

“We are building record-breaking numbers of houses in this country.”

Canada has the lowest number of housing units per 1,000 residents of any Group of Seven nation, and that has been on the decline due to population growth, Bank of Nova Scotia economists said https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.housing.housing-note.housing-note–may-12-2021-.html in a report last year.

There are nearly 300,000 units under construction across Canada, compared with about 240,000 just two years ago, government data https://www.cmhc-schl.gc.ca/en/professionals/housing-markets-data-and-research/housing-data/data-tables/housing-market-data/housing-starts-completions-units-under-construction shows.

Canada’s building is “a lot but not enough,” according to William Strange, professor of economics and policy at University of Toronto. It took decades for us to get in this mess and it won’t be over in six months.

Canada’s construction industry has seen a record number of jobs added in the past four months. This is a significant increase. The overall unemployment rate dropped to 5.3% in March, a new record.

Jim Ritchie is chief operating officer at Tridel which builds condominiums in Toronto.

So there is a great demand for this workforce.

Canada’s immigration policy could have a double edged sword. While it helps to bring in skilled workers to replace fast-retiring workers, it also stimulates housing demand. The problem is that Canada’s current target workers are not the ones it actually needs.

Mike Moffatt is the senior director for policy and innovation at Smart Prosperity Institute. He stated, “Right now our immigration policies are more focused towards attracting blue collar workers than white collar labor.”

Ritchie of Tridel stated that construction costs increased by nearly 10% between 2021-2022 and will continue to rise. This is due to higher labor costs and material costs.

There are delays in municipal and provincial approvals, which the federal government hopes will be addressed with the C$4billion “Housing Accelerator Fund.” Land availability also adds to these hurdles.

Justin Sherwood spoke on behalf of the Building Industry and Land Development Associations in Toronto.

Chrystia, Canada’s Finance Minister was unaffected.

She stated to reporters that she would do all they say.

A growing population requires a greater housing stock.

($1 = 1.2588 Canadian dollars)

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