Ontario's ambitious housing construction goals continue to crumble as the province dramatically reduced its housing start projections in the latest budget, signalling a significant retreat from the Doug Ford government's promise to build 1.5 million homes by 2031.
The province now expects just 64,800 housing starts this year — a sharp drop of 10,000 units from last year's budget projections and 30,000 fewer than originally planned for 2024. The revised figures put Ontario dramatically off course from meeting its housing targets, with government ministers now openly dismissing the 1.5 million goal they once championed.
"It was a goal set in 2022 when we had robust housing starts," Municipal Affairs and Housing Minister Rob Flack said Thursday following the budget release. "We don't today."
The government's original calculations showed Ontario needed approximately 175,000 housing starts per year to reach the 1.5 million target. With current projections falling drastically short, the Ford government appears to be abandoning the numerical target in favour of focusing on housing affordability.
Ministers Shift Away from Numerical Targets
Both Flack and Finance Minister Peter Bethlenfalvy downplayed the importance of the 1.5 million target during budget day discussions. Bethlenfalvy, who previously described the goal as a "soft target," said he wasn't focused on the specific number.
"I'm not focused on the target," Bethlenfalvy stated. "I'm focused on what we can do today to make it more affordable for people to own homes."
Flack echoed this sentiment, emphasising short-term construction goals over long-term targets. "I don't wake up thinking about 1.5, I worry about getting homes built in the next two, three months," he said. "I think what you'll see in the months to come is the focus on getting costs down."
New Measures to Stimulate Construction
Despite the reduced projections, the Ontario government introduced several measures aimed at boosting housing construction. The budget includes a temporarily expanded HST rebate on new homes, which officials hope will generate approximately 8,000 new housing units.
Home builders have welcomed the HST rebate but continue to call for more substantial changes, particularly reductions in development charges and other municipal fees that add significant costs to new construction projects.
The budget also indicates that Ontario and the federal government are collaborating on a program to help municipalities reduce development charges — fees cities use to fund housing-enabling infrastructure like roads, sewers, and water systems.
Industry Challenges Mount
The housing sector continues to face significant headwinds that have contributed to the declining construction numbers. High inflation rates, rising construction costs, and persistent labour shortages have created a challenging environment for developers and builders across the province.
These economic pressures have particularly impacted smaller developers and contributed to project delays and cancellations throughout Ontario's major housing markets.
Political Opposition Criticizes Execution
Opposition politicians have seized on the government's failure to meet its housing targets, arguing that while the original goal was ambitious, the execution has been inadequate.
"They didn't have a plan, and they should have built the plane before they got in the air," said Interim Liberal Leader John Fraser. "In fairness, it's not an easy file. You don't have all the levers, but you've got to be realistic and tell people what you can do."
Green Party Leader Mike Schreiner called for more aggressive action to enable diverse housing types and increased investment in affordable housing options.
"This government was elected on the promise of 1.5 million homes and is utterly failing to deliver," Schreiner said in a statement.
Schreiner advocated for policies supporting "gentle density" development, including multiplexes and mid-rise buildings, along with increased investment in cooperative and supportive housing projects.
The reduced housing projections represent a significant challenge for Ontario's housing affordability crisis, with home prices remaining elevated across major centres despite slowing construction activity. The government's shift from numerical targets to affordability measures reflects the complex challenges facing Canada's most populous province as it struggles to address housing supply shortages.
This story is based on reporting from Canadian Mortgage Trends.