Ontario’s housing minister is acknowledging that new home construction in the province is at a “standstill,” potentially derailing the Ford government’s pledge to build 1.5 million homes by 2031.
As Doug Ford awarded the City of London with $12 million as part of the building faster fund – a provincial program to incentivize municipalities to speed up project approvals – Housing Minister Rob Flack painted a bleak picture of the sector.
“Potential new home buyers have hit the pause button,” Flack said. “We’ve seen the housing market come to a standstill.”
While Flack didn’t offer specific reasons behind the downturn, his comments come in the wake of a new RBC report that determined Ontario presents “the root of the housing crisis” in Canada.
The latest data from the Canada Mortgage and Housing Corporation (CMHC) shows Ontario experienced a 25 per cent drop in housing starts in July 2025, compared to the same time in 2024.
CMHC data, which tracks housing starts in cities with a population greater than 10,000, shows nearly every single province posted double-digit, year-over-year, increases in July. British Columbia was the only other province that posted a decline, which was four per cent.
Ontario’s housing construction slump is also expected to be more pronounced in the years ahead, according to builders’ associations, which have warned that low sales will restrict their ability to secure financing for construction.
As the Ford government sounds the alarm on the housing sector, it’s also signalling how the expected downturn in construction will change the province’s funding to municipalities.
The Building Faster Fund – currently tied to how many housing starts have been achieved in a municipality in a single year – will be reworked to reflect the lower housing starts.
“We will sit down and talk about the criteria for next year’s program,” Flack said.
London Mayor John Morgan suggested, instead of housing starts, municipalities should be judged by what city councils can control: issuing permits for new developments.
“Couple of years ago, we did 4,000 permissions per year, the year after that we did 5,000,” Morgan said. “Last year, council did over 22,000 permissions in this city alone.”
“We have ramped up processes, we’re getting housing permitted, we’re moving barriers and red tape, we’re speeding up our timelines,” Morgan said.
Flack also suggested the current trends could be reversed by factors out of the province’s control, including the federal government offering first-time homebuyers an HST exemption, the Bank of Canada lowering interest rates, and whether the price of home construction falls.
“We need answers to these questions, fast, to get our housing industry back on track,” Flack said.
While the province introduced changes to municipal development charges – allowing builders to pay the hefty fees at occupancy rather than when the permit is issued – the measures have done little to spur sales.
Liberal housing critic Adil Shamji accused the Ford government of “waving the white flag” and of over-relying on external factors to solve the province’s housing crisis.
“It certainly looks like this government’s housing strategy is simply waiting on a hope and a prayer,” Shamji said. “It’s about looking to everybody else and not taking any ownership themselves.”
“[The Premier] can eliminate development charges, right now. He can streamline approvals and harmonize zoning across the province right now. Instead, all he chooses is to blame everybody but himself,” Shamji said.