By Canadian Press

Regulations, ‘fragmented’ construction sector holding back housing starts: CMHC

May 16, 2024 | 9:11 AM

OTTAWA — A study by Canada’s national housing agency says housing starts aren’t keeping pace with residential construction resources available due to restrictive regulations and a “highly fragmented” industry.

CMHC senior vice-president of housing economics and insights Mathieu Laberge says Canada has the potential to build more than 400,000 homes per year — around two-thirds higher than the 240,267 housing starts last year.

He says even with construction labour shortages posing a barrier to increasing supply, there were roughly 650,000 workers building homes in Canada in 2023, which is “the most we’ve ever seen.”

Laberge poses regulatory reform, particularly at the municipal level, as one solution to increasing productivity, as he notes rules around permit delivery, how many storeys and units a building can contain and development charges stand in the way of further development.

He also argues industry consolidation could help build homes more efficiently, with 69 per cent of construction businesses currently having fewer than five employees.

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The federal government unveiled a plan last month to build 3.87 million new homes by 2031.

This report by The Canadian Press was first published May 16, 2024.

The Canadian Press