Building permit activity across the country closed out 2020 with another drop.

Statistics Canada’s last round up of permit activity for the year shows a reduction in permit values of more than 4 percent compared to the month previous. December’s total value of permits was $9.1 billion, down slightly from November’s near-record total of $9.4 billion.

Every component except single-family residential reported drops in December, and Ontario recorded the greatest drop in permit values—of 13.2 percent.

All three non-residential components—commercial (-9.0%), industrial (-24.4%) and institutional (-6.1%) buildings—reported declines as the overall sector fell 10.8% to $2.7 billion in December.

Four provinces recorded decreases in the value of non-residential permits. Ontario (-30.5%) posted the largest decline—this following a significant increase in the province in November. Excluding Ontario, the value of non-residential permits rose 8.6% in the rest of the country.

Single-family homes reached a record for the month. The value of permits issued in that component rose 7.0% to $3.1 billion—bettering the previous record of $2.9 billion set in October 2016. Six provinces posted gains, with Ontario (+6.8%) among them. The rise in Ontario was mainly due to activity in Toronto, which increased in value by more than 50 percent.

Across the country, the value for multi-family dwellings declined 7.2% to $3.3 billion, largely because of a 12.8% drop in Ontario. Four other provinces also reporting a decrease in this component.

Overall, the residential sector edged down 0.9% to $6.4 billion after posting a record setting month in November.

2020: A year of turbulence

The total value of building permits dropped 2.3% in 2020—the largest annual decrease since the recession in 2009.

The residential sector ended the year at a record high of $66.7 billion—a gain of more than 7 percent. Gains in Ontario and Quebec more than offset declines in British Columbia.

Statistics Canada suggests that the COVID-19 pandemic had no small role to play in this trend. With more people working from home than ever before, more demand was created for larger living spaces. This, coupled with historically low mortgage rates and higher disposable income, strongly influenced the housing markets. The value of permits for single-family homes rose 8.0% in 2020 to its fifth highest annual value on record ($28.7 billion).

The value of multi-family dwelling permits also grew in 2020—by 6.8% to a record high of $38 billion.

The pandemic also had a structural effect on the market for non-residential construction. Demand for commercial office space in particular suffered due to working from home mandates. Across the year, the value of permits issued for office buildings fell 9.8%.

Overall, the non-residential sector posted its largest decline since 2009, down 17.0% to $33.8 billion—the lowest value in four years. All components were down in 2020, with the commercial component setting a record drop of 21.2% and reaching its lowest level since 2017.

Going against the grain, commercial permits in Ontario increased 5.1%, as a result of large developments such as Project Python in Ottawa, the Breithaupt Block office building in Kitchener and the Cadillac Fairview office building in Toronto.