Canada’s politicians spent billions in taxpayer resources to stimulate new homebuilding, and the exact opposite is happening. Canada Mortgage and Housing Corporation (CMHC) data shows a sharp decline in housing starts for March. The problem is easy to attribute to tariffs, but it wouldn’t make sense in this context—especially as provinces like Alberta continue to hit near-record levels of housing starts. The decline is primarily due to a collapse in Ontario, where weak demand has led to the fewest new housing starts since the 2009 Global Financial Crisis.
Canadian Housing Starts Are Grinding Lower As Ontario Real Estate Demand Collapses
Despite politicians across the country taking credit for boosting housing, new housing has plunged. The seasonally adjusted annual rate (SAAR) of housing starts fell to 214.2k units in March, a decline of 3.3% from a month before, extending the slowing trend that began in November. The problem is seriously amplified in Ontario.
“Most notable is the crumbling of activity in Ontario, where starts fell to 39k annualized in March, just about matching levels last seen during the depths of the 2009 recession,” warns Robert Kavcic, senior economist at BMO.
Ontario Housing Starts Collapses As Residents Flee, Alberta Nears Record High As Canadians Migrate
The country’s largest (& most expensive) province has seen housing demand completely collapse. Ontario new home starts fell 32% to 39k units in March, a trend likely to be attributed to the trade war. However, housing starts generally begin at least a year after projects are sold, and they have been steadily declining since peaking in 2022. The province is now seeing the fewest units begin construction since the Global Financial Crisis.
Source: BMO Capital Markets; CMHC; Haver Analytics.
“While starts can be a bit of a weather report, this is more evidence that tough conditions in the province are here to stay. Condo investors have vanished; a full pipeline of completions is still coming; and pre-sales/starts have therefore fallen off sharply,” explains Kavcic.
Not all provinces are seeing a collapse. In fact, some have seen starts launch to near-record highs, further emphasizing the issue isn’t entirely tariff-related.
“Notably, activity in Alberta is holding up much better, and is in fact near record levels. There was less froth in that market, and population growth should hold up better,” he says.
The bank believes that non-permanent resident caps will impact provinces like Alberta less. At the same time, they see interprovincial migration acting in the province’s favor, as more people flow from Ontario to Alberta.
“Suffice it to say that seeing new starts in Ontario run below those in Alberta (as we saw in March) is extremely rare given that Ontario has more than 3x the population,” notes Kavcic.
