Statistics Canada reports that the total value of building permits issued by Canadian municipalities dropped more than 7 percent in February.

The $8.6-billion combined permit value was the product of declines in residential-sector activity. While demand for single-family homes recorded its largest monthly gain in nearly four years (up 8.3 percent to $2.6 billion), a significant drop in demand for multi-family units (down 18.1 percent to $2.8 billion) more than offset that gain.

As a result, the total value of residential permits decreased 7.3 percent to $5.3 billion.

Regionally, Vancouver was responsible for the largest drop in multi-family housing permits. The city’s multi-residential market dropped by more than $840 million in February. The decrease was mainly due to builders’ rushing to submit permit applications before the city hiked development charges.

When Vancouver is taken out of the national picture, the value of permits for multi-family dwellings rose 10.3 percent in February.

Meanwhile, gains in the single-family market were driven by Ontario. The province recorded its highest value for single-family housing since December 2017.

Nationally, the value of non-residential permits dropped more than 7 percent to $2.3 billion in February. All three sub-components experienced declines. The value of industrial permits dropped more than 25 percent to $514 million. The value of institutional permits declined 4.5 percent to $705 million, and the total value of commercial permits fell 2.2 percent to $2.0 billion.

Ontario activity remains strong

Although five provinces reported declines in their total permit values in February, Ontario was not among them. The province recorded an increase in total permit activity of 10.8 percent—to a monthly total of more than $3.8 billion.

A strong gain in the province’s residential sector (up 18.6 percent to $2.4 billion) more than offset a slight drop in non-residential permit values (down 0.2 percent to $1.4 billion). Both the single-family homes and multi-family homes markets showed strong gains in February. Single-family permits jumped more than $200 million for the month, while multi-family permits jumped more than $170 million.

Two of the three sub-components of Ontario’s non-residential sector contracted. The value of industrial-sector permits dropped $40 million to $244 million. Commercial-sector permits dropped by more than $45 million to $859 million. The industrial sector, meanwhile, reported a gain of more than $80 million—to $303 million.

Large drops anticipated for March

On the heels of its permit activity report for February, Statistics Canada also issued a preliminary report for construction in March.

Its scan of open-source building permit reports for 23 of the country’s municipalities—which combined represented about 29 percent of total building permit values in 2019—suggest that permit values could drop by more than 23 percent across the country when compared with totals from March 2019.

Ontario, British Columbia and Quebec showed the strongest declines—likely evidence of measures put in place by each provincial government mid-month to slow the spread of COVID-19.

In Ontario, the value of permits dropped more than 50 percent compared with March 2019. The value of non-residential-sector permits dropped more than 44 percent and the value of non-residential permits dropped more than 54 percent.

Statistics Canada will release its complete report on building permit activity in March on May 8.