Regional disparities
in new housing construction
By David Gargaro
Canada is facing a severe housing crisis. In 2022, the Canada Mortgage and Housing Corporation (CMHC) stated we would need to build 5.8 million new homes by 2030 to get housing back to more affordable levels. We are currently on pace to build 2.3 million new housing units in this time, which means another 3.5 million housing units (or 500,000 additional homes per year) will be needed to meet this goal. The federal government has pledged to double national home building by 2035. Based on the current rate at which homes are being built, this is unrealistic. Ontario is the primary reason why Canada won’t meet its housing development goals. In the first half of 2025, Ontario’s housing starts fell by 25 per cent compared to last year, while the rest of Canada had a 17 per cent increase over the same period. Canada’s inability to meet its housing goals is not the fault of one province or due to one key obstacle. Local policies, costs, and regulations have created deep regional disparities in housing development, adding to the challenges facing developers in getting more housing built.
Comparing Alberta and Ontario Alberta is experiencing a surge in new housing starts. According to Bank of Montreal data, over the first six months of 2025, Alberta had 27,902 new housing starts, an increase of 30 per cent compared to 2024. This puts it on pace for nearly 59,000 new housing starts, which would be a new record and nearly equal Ontario’s capacity. Calgary, Edmonton, Lethbridge, and Red Deer have seen significant increases in housing starts. The province also leads the country in housing construction, representing about one quarter of all Canadian housing starts. Conversely, over the first six months of 2025, Ontario had only 27,368 new housing starts, a
24 | August 2025
25 per cent decline from 2024 and a 35 per cent decline from 2023. There were more housing starts in the first six months of 2020 (33,588), even though COVID-19 had shut down much of the industry. From 2022 to 2024, Ontario averaged 86,650 new housing starts per year, which is just more than half the 150,000 starts required to meet Premier Doug Ford’s target of 1.5 million new homes by 2031. Some cities (like Ottawa) are seeing significant growth, while others are experiencing significant declines. For example, new housing starts in Toronto have dropped by 44 per cent, while Guelph has declined by 76 per cent compared to last year.