StatsCan: Ontario drags down building permit values

Strong residential permit gains in B.C. and Quebec were soon squashed by lackluster performance in the east.

A housing project in Esquimalt takes shape.

A housing project takes shape on Vancouver Island. – Province of B.C.

Key Takeaways:

  • Strong residential performances in other provinces were easily offset by weak values in Ontario.
  • Industrial permits also dipped, also mainly due to Ontario.
  • A years-long downward trend of residential permit values showed signs of recovery in Newfoundland and Labrador, but StatsCan said this is mainly due to a rise in construction costs.

The Whole Story:

Building permits took a tumble this July, mainly thanks to the residential sector and Ontario.

Statistics Canada (StatCan) reported that the country’s building permit values dropped 6.6 percent in July to $11.2 billion, mainly due to the residential sector, which fell 8.6 per cent to $7.6 billion. The non-residential sector also dropped slightly by 2.1 per cent.

The agency reported thatOn a constant dollar basis (2012=100), the total value of building permits decreased 4.8 per cent to $6.9 billion.

Where art thou, Ontario?

StatCan’s data showed that strong residential permit gains in B.C. and Quebec were easily offset by tepid construction intentions in six other provinces – particularly Ontario.

Construction intentions in the single-family homes component declined 5.7 per cent, as double digit decreases in Ontario (-13.9 per cent) offset the gains. 

An infographic from StatsCan shows building permit value changes across the country. – StatsCan

StatCan noted that despite the decline, this component remained 14.8 per cent higher than the same month of 2021.

The value of building permits in the multi-family homes component dropped 11.1 per cent. Declines were posted in six provinces, with Ontario (-32.8 per cent) reporting the largest decrease. Conversely, British Columbia had a number of permits for condos and apartments, pushing the province’s permits value up 9.3 per cent.

Industrial creates drag

In July, the total permit value of the non-residential sector decreased 2.1 per cent to $3.6 billion. Gains in the commercial and institutional components were quickly  offset by losses in the industrial component.

The value of building permits in the industrial component dipped 16.9 per cent, largely due to Ontario (-31.1 per cent), which had its third consecutive monthly decline. After nearing the billion-dollar mark back in January and April, the component has returned to more typical levels.

Commercial permit values edged up 0.1 per cent; Alberta (+72.8  per cent) had the highest increase, stemming from various permits issued in Calgary and Edmonton.

Construction intentions in the institutional component jumped 7.9 per cent, with B.C.(+207.2 per cent) leading the pack. StatsCan noted that tepid results in June, as well as several large permits, contributed to the significant increase in July.

Newfoundland and Labrador stagnates 

The value of residential permits, along with the number of units in Newfoundland and Labrador, has been on a downward trend since its peak in early 2010, with the lowest values for the series observed at the beginning of the COVID-19 pandemic. This trend has been impacting both single- and multi-family dwellings similarly. StatsCan’s data show the region has experienced some recovery during the pandemic, but the recovery has been mainly driven by an increase in construction costs.

StatsCan noted that Newfoundland and Labrador’s population has remained relatively consistent at around 520,000 since 2010, leading to a smaller demand for new houses, explained the agency. In contrast, other provinces have had notable increases in both population and number of units during the same time period.

Since 2010, non-residential permits for the province have also been on a downward trend. On an annual basis, from 2010 to the end of 2021, the total value of permits for the sector in Newfoundland and Labrador has decreased 59 per cent, while Canada, excluding the province of Newfoundland and Labrador, has jumped 38 per cent.


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