Ontario’s housing construction slowdown is beginning to cause job losses and economic strain, according to the Residential Construction Council of Ontario (RESCON). The group warns that as housing starts decline, thousands of construction workers, as well as project management and planning staff, are being laid off. CEO Richard Lyall said many high-rise projects are nearing completion, leaving fewer new ones in the pipeline, and cautioned that within a year many of those currently employed will be without work.
The issue is compounded by broader economic pressures. Ontario’s unemployment rate has risen to 7.8 per cent, the highest level since 2012 outside of the pandemic, with 38,000 jobs lost between April and June. Much of that decline has been tied to U.S. tariffs on steel and aluminum, which have both raised building costs and contributed to manufacturing job cuts. Combined with higher interest rates, the economics of launching new construction projects have become increasingly challenging for builders.
The Ford government has responded by introducing measures such as zoning reforms near transit, deferring development charges, and creating incentive programs to encourage housing starts. However, Premier Doug Ford has said provincial efforts are limited without relief from high interest rates, which deter developers from taking on new projects. Advocates argue the province could do more, such as reducing taxes and fees on housing and supporting smaller “missing middle” projects like prefabricated mass timber apartments, which can be delivered faster and create additional manufacturing opportunities.
Experts warn that the slowdown presents a double-edged problem: while weaker demand has temporarily improved affordability in rentals and housing, the lack of new supply will create a tighter market and drive prices higher in the near future. University of Toronto professor Karen Chapple emphasized that coordinated action between municipal, provincial, and federal governments is essential, both to protect affordability and to offset rising unemployment in the construction sector. Without such intervention, Ontario risks falling further behind its housing targets and losing its window to stabilize the market.
Keywords: Ontario, housing construction, housing starts, job losses, construction sector, economic strain, unemployment, Ford government, interest rates, zoning reforms, development charges, affordability, supply shortage, missing middle housing, manufacturing, prefabricated housing, transit-oriented development, steel and aluminum tariffs, building costs, Karen Chapple, University of Toronto, intergovernmental coordination.
Source: CBC NEWS
