Two provincial housing groups are warning that without new intervention to jump the housing sector, nearly half of the residential construction sector jobs in the Greater Toronto Area (GTA) could be at risk.

The article by Altus Group, prepared for the Building Industry and Land Development Association (BILD) and the Ontario Home Builders’ Association (OHBA), suggests that without action, by 2027, housing starts could fall by more than 60 per cent versus 2024 levels and construction investment could drop by over $10 billion in the GTA.

The associations say part of the solution is to cut the GST/HST on all new homes.

“The pipeline of future housing supply for the GTA is at risk, along with the livelihood of 41,000 workers in the region and billions of dollars of investments,” said Dave Wilkes, President and CEO of BILD. “Alongside this massive risk we now know, due to economic analysis undertaken on the cost for governments to eliminate the GST/HST on new homes, that the provincial and federal governments can mitigate against this by treating the new home buyers of today more equitably.”

Altus Group’s paper provides analysis on the need to increase the urgency of addressing barriers (including excessive government taxation) now, before these longer-term implications on the pipeline of construction, and ultimately on jobs and the broader economy, set in.

Further analysis from the Missing Middle Initiative estimates that the total cost to extend GST/HST relief to all owner-occupied new home purchases to be $2 billion nationally and $900 million provincially. 

“This one measure taken in tandem by the province and federal government can immediately lower housing costs, jump-start demand, and protect against future supply shocks that spike prices,” said Scott Andison, CEO of the Ontario Home Builders’ Association. “Parking the generational equality and affordability issues, it's important to remember that the government cost estimates are province-wide and nationwide, with housing starts in the GTA being approximately 20 to 25 percent of the national average and 40 to 45 percent of the provincial average. That means for less than a billion dollars governments can protect at least 41,000 jobs, 23,000 annual starts, and over $10 billion in investment — with all the spinoff associated with that. If you extrapolate this across the province the impact is even greater; if this were any other industrial sector, this wouldn't even be a question.”

Regulators observing lagging indicators of the sector’s health are looking in the rearview mirror and risk missing the opportunity to effect change to avoid a looming crisis, the groups say.