Home Building in Ontario at a ‘Standstill,’ Housing Minister Says

Ontario Progressive Conservative MPP Rob Flack, who has since been named the municipal affairs and housing minister, attends question period at the Ontario legislature in Toronto on Nov. 28, 2023. THE CANADIAN PRESS/Chris Young

Ontario is in the midst of a “generational housing crisis” that has brought new home construction to a “standstill” even as the population continues to grow, the province’s housing minister says.

Housing Minister Rob Flack presented a grim overview of the sector during a press conference this week that saw Premier Doug Ford hand $12 million to the City of London from the province’s 2023 Building Faster Fund, a three-year, $1.2 billion program that awards municipalities for expediting project approvals.

The population of the province “has grown significantly” in recent years, rising from 13.7 million people a decade ago to more than 16 million people today, Flack said.

“While growth is good and needed, housing starts have not kept pace,” he said during the Aug. 25 press conference in London, Ont. “There is a clear demand and a supply issue. Because of these conditions and general market uncertainty, we have seen the housing market come to a standstill. Potential new home buyers have hit the pause button.”

The construction slowdown comes at a time when the Ford government has promised to build 1.5 million homes by 2031. The target was established in November 2022 after the province’s Housing Affordability Task Force recommended building a large volume of homes to address Ontario’s housing crisis.

The shortfall in affordable homes has led to surging housing costs that have priced first-time home buyers and seniors “out of the market,” Flack said.

“We know that the reality we live in today, where so many people are struggling to afford a home, must change and change quickly,” he said.

Ontario Housing Shortfall

Flack’s comments come days after an RBC report that said Canada is not in a housing start slump—but Ontario is.

The most recent data from the Canada Mortgage and Housing Corporation (CMHC) indicates Ontario saw a 25 percent decrease in housing starts last month compared to July of 2024, according to the report.

Data from CMHC, which monitors housing starts in cities with populations exceeding 10,000, also showed that every province except Ontario and British Columbia recorded double-digit year-over-year growth in July. Although B.C. experienced a 4 percent housing start reduction, it was 21 percent smaller than Ontario’s shortfall.

RBC report author Robert Hogue, the bank’s assistant chief economist, pointed to high development and construction costs as major barriers in Ontario, particularly in the Greater Toronto Area (GTA).

“Builders saw a rapid escalation of expenses for land, labour, and materials, compounded by municipal development charges and other fees in the past several years,” Hogue wrote. “These costs make it exceedingly difficult to bring new housing projects to market at prices prospective buyers can afford, particularly in the expensive GTA.”

He warned that the downturn in Ontario’s housing construction pipeline “could have dire consequences for 2026 and beyond if not addressed.”

Building Faster Fund Changes

In reaction to the RBC report, Opposition NDP Leader Marit Stiles criticized the province’s Building Faster Fund.

“Ontario is dead last when it comes to building new homes, and the Premier is handing out cheques amounting to less than what ONE home costs,” Stiles wrote in a post on X that accompanied a photo of a $400,000 cheque awarded to the City of Sarnia through the provincial fund.

“Either the Premier has no idea how much an actual home costs in 2025 or he has simply stopped caring about fixing Ontario’s housing crisis,” she added.

Flack told reporters during the London press conference that the province will help progressive cities and municipalities get funding despite the drop in housing starts by reworking the criteria for the Building Faster Fund. A provincial review of the criteria for next year’s program is currently in the works, he said, but emphasized that the changes have yet to be determined.

The current housing crisis could potentially be reversed by factors beyond the province’s jurisdiction, Flack added, but uncertainty on three main factors are taking a toll.

“Questions linger, will the federal government eliminate the HST on new home builds? Will interest rates come down? Will the price of home construction fall?” he asked. “We need answers to these questions and fast to get our housing industry back on track.”