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Ontario Housing Starts Increase, Yet Fall Short of 1.5 Million New Home Requirement

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Ontario Housing Starts Fall Short of 1.5 Million New Homes Target

Ontario's fall economic statement reveals that while housing starts projections have increased compared to initial expectations, they still fall significantly short of the pace required to build 1.5 million homes. The Progressive Conservative government aims to achieve this target within ten years, by 2031. However, the province does not anticipate reaching even 100,000 new homes per year in the coming years. Finance Minister Peter Bethlenfalvy's statement indicates that the province expects around 90,000 housing starts this year, with similar levels projected for the next two years, rising to approximately 94,000 in 2026. Municipal Affairs and Housing Minister Paul Calandra had previously outlined more ambitious targets in a letter to municipalities, aiming for 110,000 housing starts this year and gradually increasing to 175,000 per year in subsequent years. Despite the disparities, Bethlenfalvy remains optimistic about achieving the government's target, emphasizing the need for collaboration between municipal, federal, and provincial entities. The fall economic statement introduces the Housing-Enabling Water Systems Fund, providing $200 million over three years to municipalities for water, wastewater, and stormwater project repairs, rehabilitation, and expansion. However, concerns have been raised about the impact of recent provincial legislation on municipalities' ability to fund critical housing infrastructure. The Association of Municipalities of Ontario estimates that municipalities will be short $5.1 billion needed for housing-related infrastructure projects. In conclusion, while Ontario's housing starts have increased, they still fall far below the levels required to meet the government's ambitious target of 1.5 million new homes. The province faces challenges in funding housing-enabling infrastructure, and collaboration between different levels of government is crucial in addressing these issues.

Hot Take: Ontario's Housing Shortfall and its Impact on New Businesses

The Ontario government's shortfall in reaching its ambitious target of 1.5 million new homes by 2031 could have far-reaching implications for new businesses in the province. The housing market is a significant economic driver, and a slowdown in housing starts can ripple through various sectors, impacting businesses from construction and real estate to retail and services. For construction-related businesses, fewer housing starts mean fewer opportunities for growth and expansion. Real estate businesses, particularly those focusing on new home sales, could also face challenges. The shortfall could also affect retail businesses that cater to new homeowners, such as furniture and home improvement stores. Moreover, the province's challenges in funding housing-enabling infrastructure could lead to increased costs for businesses. If municipalities are short of funds for critical infrastructure projects, they might increase taxes or fees for businesses to make up the shortfall. On the other hand, the situation could also present opportunities. Businesses that offer innovative, cost-effective solutions for housing and infrastructure development could find a ready market in Ontario. In conclusion, Ontario's housing starts shortfall could pose both challenges and opportunities for new businesses. The situation underscores the importance of government policies and infrastructure in shaping the business environment.
Story First Published at: https://financialpost.com/news/ontario-housing-starts-economic-statement
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