Ontario’s target of building 1.5 million homes by 2031 may not be enough to meet demand, civil servants have told the province’s new municipal affairs minister, saying that 2.1 million homes could instead be needed to improve affordability.
The estimates come in briefing materials provided to Minister Rob Flack, as he took on the new portfolio in March.
The document, obtained by CBC News through a freedom of information request, suggests the range of new homes Ontario needs could be as much as 600,000 higher than the current target set by the Progressive Conservative government.
“It is estimated that between 1.5 million to 2.1 million new homes will need to be built in Ontario over roughly the next decade, based on assessments of the current housing supply shortfall and/or projected population growth,” the public servants wrote.
The government set its 1.5 million home target in 2022 after its housing task force recommended the goal. The civil servants say they drew the high end estimates from a 2023 Canada Mortgage and Housing Corporation look at the housing demand and supply gap, which they say takes into account what it would require to bring the market to 2003 levels of affordability.
The briefing document also charts an approximately 1.2 million person surge in the province’s population since 2021, which has contributed to housing needs.
During that same period, it notes home starts have been on a steady decline, not hitting the yearly 100,000 required to meet the government’s target.
“Plans for new supply have been challenged by high land and material costs, government fees and charges, shortages of skilled trades labour, labour disputes, supply chain issues and a backlog in housing-enabling municipal infrastructure,” the civil servants wrote.
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A spokesperson for the minister did not directly answer questions about the higher housing demand range provided by the civil servants. Instead, Alexandra Sanita said in a statement that the government is spending $2.3 million over four years to help municipalities build the infrastructure they need for new homes.
Earlier this month, the province passed its latest measures to accelerate home construction, Bill 17. The law allows builders to defer development charges until completion of a project and reduces the number of municipal studies required for new housing.
During the news event to announce the bill, Flack didn’t mention the 1.5 million home goal until he was asked about it by CBC News.
“It’s a goal, but frankly I’m more focused, and our team is focused more, on the next 12 to 24 months, because if it stays the way it is now, we’ll never get there,” he responded.
“But is it forgotten? No way.”
Last week, Ontario’s Financial Accountability Office released an economic update which highlighted the continued drop in housing construction. It found that 12,700 units were started in Ontario during the first three months of the year, a 20 per cent drop from the 15,900 units started in the first quarter of 2024.
NDP housing critic Catherine McKenney has called on the watchdog to dig into the government’s housing plan.
“We really need to hear from this government,” she said. “Is housing still a priority?”
Ontario needs to hit the high end of the housing range provided by the civil service and do that by getting back in the business of building deeply affordable, non-profit, co-op and supportive housing, Green Party Leader Mike Schreiner said.
“It is increasingly being confirmed that the Ford government has abandoned building homes people can afford,” he said.
Richard Lyall, president of Residential Construction Council of Ontario, said he would support an increased target to 2.1 million homes, but at the current rate, the province won’t even come close to hitting its original goal because its plan hasn’t been effective.
All governments need to lower fees for builders, he said.
“Whether it’s the federal target, provincial target, City of Toronto target, they’re in no danger of being hit,” he said. “And part of that is because when you set a target like that you have to break it down and work it backwards.'”
All levels of government should focus on building more modular homes, cutting municipal development charges, making cities whole for lost revenue, and freeing up public lands for housing at a low cost or for free, said Karen Chapple, director of the University of Toronto’s School of Cities.
But Chapple said the province needs to be realistic about its housing targets.
“People just kind of laugh now at that 1.5 million target,” she said.
York University professor of environmental and urban change Mark Winfield is skeptical of the government’s 1.5 million home housing target because it doesn’t break down types of housing required in the province.
With cuts to federal immigration levels, declining home sales and a glut of unsold condos on the market, it’s time for the government to rethink its strategy, he said.
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“I find it a little hard to compute how you could possibly come up with those kinds of numbers, and indeed, how you could possibly build that many housing units if you wanted to,” Winfield said.
While home sales and interest rates have dropped and increased affordability for buyers, this might be temporary, said Jason Mercer, chief information officer for the Toronto and Region Real Estate Board.
“At some point down the road, we’re going to see the demand for housing pick up,” Mercer said.
“If we don’t have enough supply in the pipeline because we took our foot off the gas from a policy perspective … we’re just going to get into this vicious circle where we go from having a lot of inventory to having none at all and these volatile price swings.”
