Delayed construction projects in the GTA will hurt government revenues: BILD


Ontario Construction News staff writer

A Building Industry and Land Development Association (BILD) survey has found that 498 residential construction projects by its members in the Greater Toronto Area have been delayed by the COVID-19 pandemic.

In Toronto, 65 per cent of these projects are delayed three to six months, and 32 per cent face delays of greater than six months.

BILD released a survey of its members this week that shows a majority of residential construction projects in the GTA have been delayed due to the pandemic. The survey covered 498 active construction projects representing 156,000 units at various stages of construction.

These interruptions will have “far reaching impacts on housing supply in an already tight market and will have negative financial impacts on government coffers,” according to the report.

It is estimated that holdups will result in the loss of about 9,000 housing starts over the course of the next 18 months. This will setback occupancy of over 8,000 units by the end of 2021, potentially exacerbating an already existing shortage of housing in the Toronto, reduce construction activity, and see the loss of 10,000 jobs per year.

The residential construction industry was granted essential workplace status under Ontario’s emergency orders during the COVID-19 pandemic, however, the industry was only able to complete homes that were near completion and work on important infrastructure projects such as hospitals. As a result, overall development and building projects across the region were delayed.

“One might ask, if the building industry was granted essential workplace status, why are there new housing slowdowns,” said Dave Wilkes, President & CEO at BILD.

“The response is a bit complicated. Disruptions to the supply chain negatively impacted the ability of the industry to secure vital building materials.

“Worksites had to appropriately adjust to COVID-19 protocols as social distancing rules negatively impacted productivity and some municipalities had to adjust to working remotely. This slowed processing of planning and building applications and stalled developments and construction projects.”

The survey found 65 per cent of projects in the City of Toronto reported interruptions of three to six months and 32 per cent were greater than six months. Eighty-three per cent of not yet above grade projects reported delays of three to six months and 11 per cent are greater than six months.

Eighty-five per cent of projects under construction permitted for above grade reported a delay of three to six months and five per cent are greater than six months. This situation is reflected to a greater or lesser extent in most GTA municipalities.

Federal, Provincial and Municipal government revenues will also be detrimentally impacted by the loss of housing starts throughout 2020 and 2021.

According to estimates in the BILD report, lost revenues include $340 million in lost development charges, $13.5 million in lost education development charges (TCDSB), $26.0 million in property taxes, $364 million HST, $53.8 million in provincial land transfer tax and $52.5 million in lost municipal land transfer tax.

“Now more than ever, all levels of government must work together to make sure that proper measures are in place to remove barriers that will unlock consumer and industry construction investments to help kick-start the economy,” Wilkes said.

With 1,500 member companies, BILD is the voice of the home building, land development and professional renovation industry in the Greater Toronto Area.

The building and renovation industry provides $34 billion in investment value and employs 270,000 people in the region. BILD is proudly affiliated with the Ontario and Canadian Home Builders’ Associations.

Key findings from the survey include:

  • Responses were received from 47 large owners or managers of development projects located in Toronto and accounting for some 109,000 units in active development projects.
  • The majority of the development projects reported on in the survey results were pre-construction (68 per cent of projects and 56 per cent of units).
  • The vast majority of respondents reported delays in pre-construction projects and those under construction (both at the above and below grade stages).
  • Among residential development projects in the pre-construction phase, about 3 per cent reported no delays and/or minor delays; 65 per cent are delayed by an estimated three to six months; and the remainder 32 per cent face delays estimated at six months or more.


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