According to a new report by Canada Mortgage and Housing Corporation (CMHC), Canada saw a record high of 650,000 construction workers in 2023, yet only 240,267 housing starts were recorded, falling well short of the potential of over 400,000.

CMHC noted a significant decrease in productivity compared to the late 1990s and early 2000s, suggesting that if past labor productivity rates were maintained, there could have been 57% to 66% more housing starts in 2023. This disparity is even more pronounced in urban areas, where housing starts could have been 79% higher, amounting to 189,000 additional units. CMHC also highlights municipal regulations as a key factor in constraining construction activity, citing delays in permit delivery, building regulations, and development charges. They suggest that while federal and provincial governments have a role, local regulations significantly impact construction productivity.

CMHC’s latest Housing Supply Report shows that Vancouver, Calgary, Edmonton, and Ottawa had ratios of housing starts to population above 2. If housing starts across Canada matched those of these markets, approximately 430,000 new units would have been added to the supply. Additionally, a separate report indicates that Canada needs to build 3.5 million additional homes by 2030 to improve affordability. Boosting housing supply is clearly a top priority across all levels of government.