Michael Lewis
Special to GTA Construction News
Builders’ associations are warning of major job losses in GTA residential construction as Toronto records its lowest annual housing starts in nearly three decades on plummeting condominium sales.
“The high-rise business in 2026 to 2028 is going to be very ugly,” said Richard Lyall, president of the Residential Construction Council of Ontario. He said single family and multi-unit contractors are in the process of culling thousands of skilled trades workers with project management teams also “getting laid off in very large numbers right now.”
Over the next 12 months or so he said builders will complete the remaining high-rise developments sold in the past five years and it will then take another three years to get large projects off the ground.
In the meantime, Lyall said skilled trades people will go to where the jobs are, or shift to another industry entirely.
“One of the big concerns we have, assuming that we’re smart enough to figure this out and turn this around, is because we’re going to have a lag and the longer we wait the bigger that lag. If that gap is too big, we’re not going to have the workforce and so then we’ve created the next problem.”
The Altus Group in a June report said residential construction employment in Toronto fell in May to its lowest level since the spring of 2021, during pandemic stay-at-home orders, even as the nonresidential segment held steady on demand for transit, roads, utilities, and healthcare infrastructure.
Commissioned by the Building Industry and Land Development Association, the report says a trusted jobs engine in the GTA is stalling as home starts dry up due to high development costs, elevated interest rates, declining investor confidence, and an increased supply of existing homes.
According to the Canada Mortgage and Housing Corp.’s fall housing outlook, Toronto’s homebuilding activity is at its lowest point since 1996, adjusted for population growth, on a 60 per cent drop in condominium starts.
The outlook said overall residential building activity fell 44 per cent in the first half of 2025 compared to the same period in 2024. Condominium apartment sales between 2022 and 2025 declined by 75 per cent in the greater Toronto area and 37 per cent in the Vancouver census metropolitan area, with inventories more than doubling and prices falling.
“A pullback in investor demand during the first half of 2025 reduced project feasibility, leading to cancellations, delays, and a sharp drop in construction,” the agency said.
“Many in the building community suggest construction costs and development charges must be reduced to ease condominium prices and improve project viability.”
With the new construction market grappling with a high inventory of unsold units and a jump in condominium listings, “we could experience constraints on labour and housing several years from now,” CMHC senior economist Ted Tsiakopoulos said in an email.
“To reach balance in the condo resale and new construction markets, we need at least 40-60 per cent of new condo listings sold in a given month,” he said. “We are currently seeing numbers under 30 per cent.”
The Altus Group report predicts a potential loss of 41,000 residential construction jobs in the GTA by 2029 if current trends continue.
Lyall said for the housing market to escape the current dire conditions, the Goods and Services and Harmonized Sales Tax on all new houses must be waived by both the federal and provincial governments.
Recent federal legislation eliminated the GST for first-time purchases of new homes valued at up to $1 million with Ontario contemplating following suit. Ottawa has also reduced the sales tax for first-time buyers on a sliding scale for homes between $1 and $1.5 million.
And it has created the Build Canada Homes agency to oversee plans to build 4,000 homes on six federally owned sites. A fund of $13 billion will offer financial incentives for builders to construct affordable homes.
Lyall applauded the initiatives but said governments need to align more closely on taxes, planning and zoning, housing permit approval times need to be shortened and technological innovation to promote building efficiency needs to accelerate.
To kick-start building, he said the Ontario government should mandate a roll-back of municipal development charges, better govern the eligible scope of DCs and tie future increases to the rate of inflation.
Lyall noted that 36 per cent of the cost of a new home is the result of taxes, fees and levies, while he said municipalities continue to stockpile cash from the DCs.
The Association of Municipalities of Ontario in its 2025 pre-budget submission to the province said it recognizes the need to explore new formulas to fund and finance infrastructure in the face of historic growth.
“But that can’t just mean putting everything on the property tax base.”
The AMO says while the province has implemented cuts to eligible development charge expenses, limiting municipalities’ ability to recover the costs of essential infrastructure, the provincial and federal governments “are not investing their fair share in municipal infrastructure, contributing less than 30 per cent of annual funding.”
Contributions from provincial and federal governments have not kept pace with the true costs of building – which have grown by an estimated 70 per cent in the past 10 years, the submission adds.
“We can’t eliminate DCs without providing a backstop (from federal or provincial funds,” said Karen Chapple, director of the School of Cities research hub at the University of Toronto.
She said further interest rate cuts would boost home sales and construction, more public land should be donated, and non-profits ought to play a larger role in creating affordable housing.
“Reducing taxes and fees is part of the puzzle,” Chapple told OCN. “It’s necessary but not sufficient.”
