Housing construction slowdown impacts the economy

By Grant Cameron

Aug. 11, 2026

New housing construction is not just about providing places for people to live - it is one of the most important drivers of Ontario’s economy.

The residential construction industry directly employs well over 100,000 workers and more than 200,000 when related industries are included. These are tradespeople, engineers, architects, planners, suppliers, truck drivers, project managers, and construction professionals.

When housing construction slows, the economic impact is felt quickly through layoffs, reduced apprenticeship opportunities, and lower demand for construction services. The industry also drives a large supply chain for lumber and wood products, concrete, aggregates, steel, aluminum and more.

The sector injects billions of dollars into the economy annually and functions as a major economic multiplier. Nationally, housing has been described as the backbone of the economy, supporting more than 1.2 million jobs and contributing more than $143 billion in GDP activity.

That’s why it’s so important to address the current housing crisis. You can’t grow the economy without housing.

There have been many positive changes as of late related to the HST and development charges on new housing, green standards, and the building code. While all steps in the right direction, governments need to keep the ball rolling. There are still plenty of issues to tackle.

RESCON outlined a number of them in recent columns in various publications and in podcasts.

Approvals system

For example, we highlighted the importance of faster approvals and the benefits of a single digitized platform in a column in Real Estate Magazine.

In a column in The Toronto Sun, we outlined why RESCON has joined One Ontario's AI for Housing Coalition and the importance of using technology and artificial intelligence to automate repetitive administrative work and reduce manual document entry that clogs the system.

Learn from Alberta

In a column in Storeys, we noted that Ontario could learn a thing or two from Alberta, which is outperforming the rest of the country when it comes to getting shovels in the ground and homes built.

The province has a system that enables compliant projects to move forward without delay and is reducing costs at the source.

Apprenticeship completions

A report prepared for RESCON noted that, despite billions of dollars in public investment, uptake of construction apprenticeship training programs remains too low in many areas and the number of workers who actually complete training and receiving certification is on the decline.

In a Builder Bites column, we explained why the traditional levers are not working, and in a column in Daily Commercial News we highlighted how a new approach using behavioural analysis could make a difference.

Government-imposed costs

A column in Canadian Forest Industries explained how a decline in homebuilding affects the forestry and wood products industries - and why it’s important to boost the residential construction industry, as it directly and indirectly employs a substantial number of workers nationwide.

Podcasts

In an episode of the Colliers Talks Economics podcast, host Adam Jacobs sat down with RESCON president Richard Lyall to unpack the housing situation and delve into whether there’s a path forward. Ontario’s housing market went from one of the hottest development booms in history to a landscape of stalled projects, cancelled developments and deepening affordability challenges.

Meanwhile, Lyall joined Vanessa Topple on CREBTV for a two-part series on Ontario’s Development Charge Reduction Program and explained how technology and faster approvals can help increase the province’s housing supply. Click here to watch/listen to the podcast.