Ontario’s housing crisis could be resolved if the federal, provincial and municipal governments worked together, says economist Mike Moffatt, author of a new report showing the province is behind on constructing new homes and apartments.
“The solutions are out there,” says Moffatt, an assistant professor of business, economics and public policy at the University of Western Ontario’s Ivey School of Business. “We don’t have to do anything novel — we just need to look at what the other provinces are doing better than us and adopt some of those reforms.”
Using data provided by the Canada Mortgage and Housing Corp., he showed that, relative to its population, Ontario built fewer homes during the six-year period that ended on July 1, 2024 than any other province except New Brunswick and Saskatchewan.”That’s roughly the same time period as the Ford government,” Moffatt says. “That was intentional.”
To make matters worse, the province has slowed the pace of construction. During the period, about 13,000 fewer homes were built than in the previous year.
Asked about the findings, a representative of the provincial Ministry of Municipal Affairs and Housing placed the blame squarely on the federal government’s shoulders. “Ontario has achieved the highest [number of] housing starts the province has seen in over three decades,” a ministry press officer wrote in a statement provided to Compass News. “However, as a result of high interest rates caused by the federal government’s runaway tax-and-spend policies — including the federal carbon tax — home builders across the province face a challenging economic environment that is impacting the pace of new home construction.”
While Moffatt agrees that some blame does fall at the feet of the Trudeau government, he says it has actually pursued several beneficial policies. “We need reforms at the federal level — and we’re starting to get some of those, [such as] the removal of the [government sales tax] on purpose-built rentals and some other tax reforms. . . . The federal side of this alone doesn’t explain why some provinces are doing better than others. Provincially, we haven’t had the seriousness of reforms that are needed to our land use rules.”
Moffatt notes that other provincial governments have already figured out ways to improve the speed of house and apartment construction. He says the province should be taking its lead from B.C. Alberta and Quebec — three large provinces that are successfully building more homes.
He’s particularly impressed by the B.C. government’s work streamlining its zoning process and removing restrictive regulations. “They’ve removed some height requirements and allowed for small, single-egress European-style apartments that are easier and cheaper to build. They’ve also allowed for more family-sized units [to be constructed].”
Moffatt adds that Alberta benefits from its liberal land-use regulations, which allow for more straightforward zoning applications. “Edmonton has even automated the development permit system so applications are assessed by computer so you can actually get same-day approvals. In Ontario, it takes months.”
He adds that Quebec has managed its own housing crisis by cutting the development charges placed on new homes. “When you look around the GTA, most communities are charging $100,000 or more just to get a shovel in the ground. That’s making building homes difficult and prohibitively expensive.”
Moffatt’s report, which was published by the Smart Prosperity Institute, also compared the rate at which homes and apartments are being built in Canada’s 100 largest cities. “There’s a very wide range of performance when it comes to approval processing times, land development reforms and regulatory reforms.”
A striking number of the most under-performing municipalities are found within Canada’s most populous province. Of the 30 Ontario municipalities included on the list, 13 are ranked among the bottom 20 performers — Aurora, Brampton, Peterborough, St. Catharines, Ajax, Windsor, Burlington, Halton Hills, Sarnia, Sault Ste Marie, Sudbury, Thunder Bay and, in dead last, North Bay.
“As for which level-of-government is to blame, though, I think it’s all of the above,” says Moffatt.
In the report, Barrie placed 37th in terms of the total number of homes and 48th for the total number of apartment units constructed in the last six years. It constructed about 45.3 houses and 22.3 new apartment units for per 1,000 residents.
“Barrie’s done relatively well for itself. There’s lot of demand out there thanks to all the families moving up from the GTA, as well as immigration.”
He is particularly impressed by its council’s decision to sit down with property developers to discuss ways to make Barrie a more appealing place for their investment dollars. This has been credited with helping to lead to a wave of development set to increase the city’s total stockpile of rental units by 25 per cent.
“Absolutely, cities should be sitting down with industry to figure out where the barriers are,” says Moffatt. “As long as everyone is welcome at the table, so cities aren’t giving special treatment to one developer or another, I’m in favour of that.”
