The federal government’s decision to reduce immigration targets for 2025-2027 raises alarm among Ontario’s home builders, policymakers, and stakeholders. With the province aiming to construct 1.5 million homes over a decade to address a growing housing crisis, the move threatens to exacerbate existing challenges, including labour shortages, policy inefficiencies, and affordability issues.
Ontario’s Housing Goals
Ontario’s Progressive Conservative government has set an ambitious target: build 1.5 million homes by 2031 to tackle the housing shortage. To achieve this goal, the province requires an annual average of 150,000 new homes—far above the 96,000 completed in 2022, despite a 30 percent increase over the previous 20-year average.
Municipal Affairs and Housing Minister Steve Clark has introduced various measures to speed up construction, such as granting “strong mayor” powers in Toronto and Ottawa and controversially opening parts of the Greenbelt for development. While these initiatives have shown some results, they fall short of the needed scale. Industry leaders argue that significant systemic changes are essential, particularly in addressing labour shortages and streamlining approval processes.
A Critical Bottleneck
The construction industry faces an aging workforce, with nearly 25 percent of workers in the Greater Toronto Area expected to retire by 2030. Nationally, BuildForce Canada estimates the sector will need to recruit 351,800 workers by 2033 to keep up with demand. Immigration has historically been a vital source of skilled labour, but the federal government’s decision to lower immigration targets threatens this pipeline.
BuildForce provides information and resources to assist the construction industry with its management workforce requirements. In the Fall 2024 edition of BuildForce magazine, the organization’s chair, Sean Strickland, said apprenticeship is key to the future of building construction, citing upcoming retirements, and rising volume of project requirements.
By 2027, Canada’s immigration intake will drop to 365,000 permanent residents annually from a planned 500,000 in 2025. Immigration policies have increasingly favoured university-educated professionals over skilled trades workers, compounding the issue and leaving industries like construction struggling to fill essential roles.
Richard Lyall, president of the Residential Construction Council of Ontario (RESCON), emphasizes the urgency: “The housing sector cannot meet demand without a robust and skilled workforce. Reducing immigration targets puts our entire plan in jeopardy.”
Bureaucratic Hurdles
Fragmented regulations and inefficiencies also plague Ontario’s housing plans. Municipalities often introduce unique green building standards that diverge from provincial and national codes, increasing costs and delays. While these standards promote sustainability, RESCON wants harmonized regulations to streamline the approval process.
In response, Ontario has piloted electronic development approval systems in Simcoe County to expedite permits. However, an expansion of such initiatives is necessary to meet construction targets, failing which high interest rates, rising inflation, and bureaucratic delays will continue to impede progress.
Economic Impact
The lack of affordable housing is more than a social issue—it’s a pressing economic concern. The Ontario Chamber of Commerce has highlighted how housing shortages hinder businesses from attracting and retaining a diverse workforce. High housing costs also deter skilled immigrants, further straining the labour market.
Moreover, reduced housing supply exacerbates affordability issues. As demand outpaces construction, prices will continue to soar, depriving many Ontarians of homeownership and rental markets.
Policy Changes Impact
The federal government’s new immigration plan aims to “pause” population growth to alleviate housing, infrastructure, and social services pressures. However, critics argue this approach could backfire. While reducing immigration may temporarily ease demand for housing, it will also deprive the construction sector of the skilled trades workers essential to meeting housing targets.
Ontario’s Immigrant Nominee Program (OINP), which allows the province to nominate skilled workers for permanent residency, has seen increased allocations—from 16,500 in 2023 to 21,500 in 2024. However, uncertainty around federal immigration policies undermines these efforts. Industry leaders call for the expansion and protection of programs like the OINP and pilot projects, such as one for out-of-status construction workers in the GTA, to be made permanent.
Unified Approach
Ontario’s housing crisis demands a coordinated response from all levels of government. Key recommendations include:
1. Expanding Skilled Trades Immigration
Ontario must advocate for federal policies prioritizing trade workers over highly educated immigrants who may not fill labour gaps. Programs targeting construction workers should be expanded and streamlined.
2. Harmonizing Building Codes
The province should implement standardized construction requirements to reduce costs and delays caused by municipal-level green standards.
3. Streamlining Approval Processes
Expanding electronic permit systems and cutting red tape can significantly accelerate housing development.
4. Boosting Workforce Retention
Retention programs for aging construction workers and training initiatives for new entrants could help address labour shortages.
Balancing Growth and Sustainability
While the federal government’s intention to achieve “sustainable” population growth makes sense, it must be balanced with the immediate economic needs of provinces like Ontario. The housing crisis is a complex issue requiring nuanced solutions, not blanket reductions in immigration.
For Ontario, falling short of the 1.5 million housing target will worsen affordability issues, strain the labour market, and stall economic growth. Aligning provincial and federal policies in provincial budgets will ensure Ontario’s housing dreams are realized.
FAQs About Immigration Cuts and Ontario's Housing Goals
Reduced immigration targets will decrease the availability of skilled trades workers in construction, a sector already struggling with labor shortages. Ontario aims to build 1.5 million homes by 2031, but without enough workers, progress will slow. The federal decision to cut immigration to 365,000 annual newcomers by 2027 threatens to exacerbate this issue, as fewer immigrants will enter skilled trades critical to achieving these housing targets.
Immigration has historically been vital for addressing labor gaps in construction. With nearly 25% of Ontario’s construction workforce retiring by 2030, skilled immigrants are essential to fill these roles. However, current federal immigration policies favor university-educated professionals over trades workers, leaving critical labor shortages unaddressed. Programs like Ontario’s Immigrant Nominee Program (OINP) help, but federal alignment is necessary to meet housing goals.
Ontario faces multiple hurdles, including labor shortages, fragmented building regulations, and slow approval processes. Municipalities often implement unique green standards that conflict with provincial codes, increasing costs and delays. Although Ontario is piloting electronic permit systems to streamline approvals, these initiatives need broader implementation. Without addressing these inefficiencies, meeting the target of 1.5 million homes by 2031 remains challenging.
The housing crisis affects more than affordability—it also limits economic growth. High housing costs make it difficult for businesses to attract skilled workers, compounding labor shortages in key industries. Additionally, reduced housing supply drives up prices, pushing homeownership out of reach for many Ontarians. Solving the housing crisis is critical to supporting both workforce retention and economic stability.
Experts recommend several actions:
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- Expand immigration programs targeting skilled trades workers.
- Harmonize building codes to reduce regulatory inconsistencies.
- Streamline permit approval processes with electronic systems.
- Introduce workforce retention programs for aging construction workers.
- Align federal and provincial policies to balance housing development with sustainability goals.
A unified approach is essential to solving Ontario’s housing challenges and achieving its ambitious targets.
