by Jordan Bateman | ICBA | Oct 31, 2025 | ARTICLES & OPINIONS
By Jock Finlayson, ICBA Chief Economist
QUICK SUMMARY: Homebuilding in Canada is slowing sharply in major regions like Metro Vancouver and Toronto, with many projects delayed or cancelled as demand softens and population growth cools, threatening jobs and economic growth. While Ottawa aims to double housing construction by 2030, Statistics Canada data show residential investment and employment are already declining in B.C. even as Alberta’s housing sector continues to expand.
At a time when Canadians and their governments are grappling with epic housing supply and affordability challenges, the data show that homebuilding continues to fall short in some parts of the country – including several metro regions where many newcomers to Canada settle. In both Metro Vancouver and the Greater Toronto area, housing starts have been languishing below the levels needed to close the supply gaps that have opened up since 2019. In fact, many planned development projects in B.C. and Ontario are being delayed or cancelled outright, amid a glut of unsold condominium units and a sharp drop in population growth stemming from recent shifts in federal immigration policy.
While Prime Minister Carney’s Liberal government in Ottawa has pledged to double the pace of homebuilding by 2030, the on-the-ground reality points to stagnant or falling housing starts in many communities, particularly in B.C. and Ontario. The slowdown in residential construction not only affects demand for the services provided by homebuilders and renovators; it also has wider economic consequences, owing to the size and scope of the residential segment of the Canadian construction sector. The consequences of fewer housing starts and less residential investment include diminished demand for the goods and services produced by suppliers to the homebuilding industry, lower tax revenues for governments, a softer job market, and weaker overall economic growth.
Statistics Canada’s Housing Economic Account allows us to quantify some of the economic impacts of residential construction.
The first figure reports data on the value of the overall gross “output” attributable to residential construction for Canada, B.C. and Alberta over the 2020-24 period. The data are presented in current dollars. For Canada, the figure stood at $238 billion in 2024, up slightly from 2023 but less than in 2021 and 2022. At the national level, residential investment amounted to 7.7% of Canada’s total nominal GDP in 2024:
The figure confirms that British Columbia has experienced a sizable decline in residential construction GDP since 2022. ICBA Economics sees this negative trend persisting over 2025-26 as housing starts remain in the doldrums and more projects are cancelled. The picture is different in Alberta: there, residential construction investment has been climbing steadily since 2020 and – in contrast to B.C. – it in not on track to crater in 2025-26.
The second figure reports on the number of jobs associated with residential investment spending for Canada, B.C. and Alberta, with data presented for 2022 and 2024:
Statistics Canada estimates that some 1.2 million Canadian jobs were attributable to residential construction activity in 2024. For B.C., the figure was almost 200,000 jobs; in Alberta, it was 170,000. It is important to note that these employment estimates capture both the “direct” and “indirect” employment effects of residential investment. According to Statistics Canada, approximately three fifths of the jobs dependent on residential investment are “direct” construction positions, with the rest being “indirect” jobs which are linked to activity in the homebuilding/renovation business.
The downturn in new home sales and the related weakness in residential construction in B.C. is taking a toll on jobs in the province – one that ICBA expects will increase over the coming year. One recent report estimated some 20,000 job losses in the Lower Mainland due to the slump in new home sales and the cancellation of a growing number of planned development projects.
Spending on homebuilding, home renovation, and residential real estate transactions – added together – represents a substantial slice of Canada’s $3.3 trillion economy. This broad sector also sustains some 1.2 million jobs across the country, a figure that partly reflects the relatively labour-intensive nature of both residential construction and some of the other related and supporting industries that are tied to homebuilding. Government decision-makers at all levels need to recognize the outsized economic contributions of residential construction and its various sub-sectors as they develop and implement policies to address housing supply and affordability issues.