By Tom Parkin
November 19th, 2024
BURLINGTON, ON
OPINION
So many Ontario economic indicators are pointing down, and the failure to build housing could be the key to understanding why
Month after month the Ontario PC ‘s approach has absolutely failed to spur housing construction, and October was no different, according to data released by the Canada Mortgage and Housing Corporation this morning.
There were under 5,500 Ontario housing starts last month.
There were under 5,500 Ontario housing starts last month. That’s only 44 per cent of the 12,500 per month pace needed to meet to hit the target of 1.5 million units by 2031 set by the Housing Affordability Task Force and accepted by the Ford PC government.
Housing data can bounce around month to month. But this isn’t statistical noise. Mark up a big F for fail because in four of the last five months Ontario housing starts have been less than 50 per cent of target. This government hasn’t hit a single target since they adopted them in June, 2022.
Twenty-nine months later, 211,980 new units have been started, 150,520 homes less than needed. The shortage that has been added by this government is enough to housing perhaps 300,000 to 500,000 people — a significant-sized city.
Broader economic impacts going unexamined
Housing scarcity increases renting and buying prices. It costs jobs in the residential construction industry. In May, Data Shows research showed BC’s big housing push was paying off with jobs and paycheques while Ontario slumped.
But there seems to be almost zero media attention on how this self-inflicted housing crisis hurts Ontario’s broader economy.
There is occasional acknowledgement that while Ford’s policies aren’t building much housing, they are spurring the growth of tent cities. Workers who can’t pay for a home become homeless. And for those unable to work because of disability, living on under $16,500 a year on Ontario Disability Support Program, the housing crisis is a complete catastrophe.
But with the asking price of a Toronto one bedroom apartment now at almost $2,400 a month or nearly $30,000 a year, it’s not just those relying on social assistance who can’t make ends meet. A worker earning $25 an hour and working 40 hours a week takes home just over $40,000 a year after source deductions.
Rising costs means an increasing number of people have nothing left after paying for food and rent. The rising housing crisis has combined with food inflation to become a general affordability crisis for many. And when fewer people have money to spend, it’s a problem for everyone, not just a few.
Consumer spending drives the economy, particularly the services sector. In most developed economies, consumer spending generates about two-thirds of GDP.
Ontario’s affordability crisis goes a long way to explaining why August retail sales in Ontario were lower than May 2022 though, outside Ontario, they are at a new peak.
Low consumer spending drags down everything else. Ontario’s unemployment rate is worse than the national rate. Ontario’s average wage is falling while rising elsewhere. Unionization is in decline.
There’s only so much housing failure an economy can survive. There’s only so much economic failure a good society can survive.
Fixing Ontario’s economic challenges not the priority
Added to the retail sales problem, the province’s manufacturing is declining, affecting jobs and reducing income from export sales (Data Shows will take a closer look at sales data tomorrow).
But despite these overlapping challenges, the top priority of a premier elected to “get it done” on housing and jobs is ripping up bicycle lanes in downtown Toronto.
Tom Parkin is a social democratic commentator and the publisher of the Data Shows newsletter.
I have noted this before, but Fords Growth Plan is based almost entirely on blind faith in his mandated long term population growth targets, and the housing unit targets that go with them. Everyone involved, including the City Mayor, and Council, blithely assumes or just accepts, that this is an intelligent approach to design a provincial and City budget and 25 year economic and socially promising future. However, There is no visible concern about the overall economy, just getting population, even if the added numbers are 97% net immigrants.
In just this last week of the Gazette, there are several stories that tell us how well this Plan, and the Ford political finagling and manipulation of the municipal development rules, that have made it easy for developers to accumulate, speculate , and grossly profit in and inflate real estate prices and values several times over the last 15 years. Population in 1971 was 8 million, in 2024 it was 2024, and the only basis for the future economy is 2051 population of 22.1 million – this is almost 3 times the number in 1971. No thought visible from those in charge.
What we are seeing is tha Ontario could only sell 50% of its target over the last 6 years, and the overall economy is suffering as a story here says, and many developers and sellers are having a a hard time selling, and development all over is falling as a result. Ford’s plan is failing badly, but he is determined to stay his course and is doubling down. Great planning intelligence. Just blow the place up with millions of immigrants
As proof of what is going on around Aldershot, I can show projects that were approved almost 6-10 yrs ago in Aldershot, most near the GO, have sites that have just sit idle all that time, and still are.They have reapplied their approvals,, or are are part of a assembly new application, or are at reapplication on their own. These are 35 Plains Rd E, 40-70 Plains Rd E, the Solid Gold approval,and 92 Plains Rd E, is proposed to be assembled into 3 other properties on the south side of Plains Rd. Either these did not get enough presells for financing, or they were pure speculation and are still waiting. Two other lengthy delays to start, and will be some time before occupancy, I know of were 2100 Brant St, and 480 Plains Rd E (Bingo Parlor Home Hardware).
These facts are indicators of what was really underlying the more visible weakening in the expectations and coming economic and social hard times that are so evident and not fixable by the Ford plan and Mayor budget. This story right here is one of three indicating the problem extent.
Another Ford failure shows with no conscious fix based on economic forces. And our Mayor fashions a budget to support it, and together with the Council, especially with visibility, in the large profit from his property, Councilor Galbraith, the growth is just faithfully stated to be a certainty and we have to do it.
Error correction – Population in 2024 was 15.6 million, obviously not 2024.
Sorry.
PLEASE – we don;t have the time to go back and correct your errors.
Publisher
Why don’t you point the finger at the real problem for the housing crisis – the Federal Govt, Trudeau, Gould & their immigration policies? You know, the people you keep electing, who keep passing the buck & blaming everyone else for their mess.
Graham,
The damage to the economy and the well-being of Canada will persist for decades.
The recent adjustments by the feds are lip service in my opinion especially when we consider the coming migration pressure on our southern border that we are clearly not ready for.
We need to concentrate on reducing the massive over governance at all levels in this country.
This problem was started by the feds out of control immigration policy.That is confirmed by the recent pull back.But that is too little too late ..the damage will
be with our economy for many years.
Ford has other priorities as well, that seem to be non-negotiable. Build a highway to enable more urban sprawl into greenspace. Build a spa by the lake to enrich foreign interests. Get beer sold in every corner store. Send everyone a $200 bribe.
With billions of $$$ to waste, starve the health and education sector. Get it done.