The clock is ticking for governments to take action
By Richard Lyall
for Canadian Forest Industries
Feb. 11, 2026
The most dangerous misconception about Canada’s housing slowdown is that it is just a market correction - something that affects investors, developers, and spreadsheets, but not real people.
Nothing could be further from the truth.
Tens of thousands of jobs in the residential construction sector are at stake - as well as jobs in the wood and forest product industries.
Falling demand for framing lumber will lead to price drops and production cuts for softwood lumber manufacturers, less work for sawmills and the logging industry, and reduced demand for structural panel manufacturers and those who make engineered wood and prefabricated components.
The ripple effect will be disastrous for many industries and our economy.
Economic modelling by the Canadian Centre for Economic Analysis indicates that there will be a deep and persistent slowdown in new housing relative to the 10-year average. The anticipated scenario implies about 21,500 fewer housing starts and about 18,000 fewer completions than the 10-year average, roughly 36 per cent fewer starts and 39 per cent fewer completions.
Just 5,300 new homes sold in the GTA in all of 2025 - the worst year in 45 years of record-keeping. December sales were down 82 per cent from the 10-year average.
The implications for the workforce are significant.
The expected scenario suggests that about 35,000 residential construction workers in Ontario could be displaced on average. The estimated displacement profile is approximately 21,000 workers aged 35 or younger, about 5,000 aged 36 to 54, and about 9,000 aged 55 and over.
This matters because these jobs losses will turn into a permanent skills crisis for our industry.
Construction jobs aren’t like retail or office jobs. When workers leave, they don’t magically return when conditions improve. Apprenticeship chains break. Crews dissolve. And workers with specialized skills in trades such as high-rise concrete forming and mechanical systems disappear.
Once they’re gone, they’re gone.
Developers are cancelling projects at record levels. Crane counts are down and condo launches in the Greater Toronto and Hamilton Area are at the lowest point in more than three decades.
Behind every cancelled project is a crew that never gets hired, an apprentice who never starts, and a worker who looks for a future elsewhere.
When demand eventually returns, we will discover an inconvenient truth: the workforce that is needed to solve the housing shortage no longer exists.
There has been a tendency to treat the downturn as a downtown Toronto condo story. But as we heard at RESCON’s recent annual general meeting, the data doesn’t support that narrative.
Mike Moffatt, founding director of the Missing Middle Initiative at the University of Ottawa, soundly debunked that storyline. Data shows that sales have slowed not just in Toronto and Vancouver, but also in markets like Calgary, Edmonton and Kitchener-Waterloo.
Demand for new housing is down across the board as the cost of building new units is too high to compete with the resale market. Condo apartment starts are down more than 50 per cent across most municipalities in the Greater Golden Horseshoe.
The core issue is whether builders can build homes that people can afford to buy. Prices for new homes have fallen roughly 20 per cent from their peak, but construction costs have not followed suit.
Costs for land, labour, materials, development charges, financing costs, and layered taxes remain stubbornly high. Builders can’t lower prices enough to attract buyers without locking in losses.
So, projects stall. Financing evaporates. Jobs disappear.
To their credit, provincial leaders acknowledge the problem. It was clear from remarks by Premier Doug Ford and Municipal Affairs and Housing Minister Rob Flack at RESCON’s meeting that they get the challenges ahead and are determined to act further and decisively this year.
They intend to speed up approvals, cut red tape and invest billions of dollars in housing-enabling infrastructure. A cut to both the provincial and federal sales taxes on new housing for first-time buyers is also in the works. All of this will certainly help but only at the margins.
The leaders know what needs to be done systemically to cut the rest of the housing Gordian Knot. If governments are serious about protecting housing supply, they must take further action.
That means slashing development charges that add tens of thousands of dollars to each new unit, eliminating the tax-on-tax that inflates construction costs, shortening construction timelines so carrying costs don’t kill projects, and slashing the sales taxes on all new housing.
We know exactly why the housing crisis is happening - yet we’re still not acting at the scale required.
Governments must fire their guns all at once. We can not wait any longer. The clock is ticking. Every cancelled project pushes skilled workers closer to the exit. There are too many jobs on the line.
Richard Lyall is president of the Residential Construction Council of Ontario (RESCON). He has represented the building industry in Ontario since 1991. Contact him at media@rescon.com.