Canadian policymakers are helicoptering money to stimulate building, but it doesn’t appear to be working. Statistics Canada (Stat Can) data shows the total value of building permits fell sharply in April, dropping to the lowest monthly volume in nearly a year. The annual decline was so large it was amongst the largest since 2020.
Canadian Real Estate Building Plans Saw One of The Sharpest Declines Since 2020
The total value of Canadian building permits in seasonally adjusted billions of dollars.
Source: Statistics Canada.
Canadian building intentions hit a roadblock last month. The total value of building permits fell to just $11.7 billion in April, down 14% from last year. The real (inflation-adjusted) value is 16.4% lower, down to the weakest level in nearly a year. It marked the third-largest annual drop for any month since 2020.
Canadian Residential Building Plans Fell Sharply, Especially In Vancouver
All segments showed declines, but the largest pullback was in the residential sector. Residential permits were 14.6% lower than last year, coming in at $7.4 billion in April. The lion’s share of that decline was related to multi-family units (-20.5% y/y), with Vancouver accounting for nearly $1 billion of that drop. Building intentions for single-family homes (-1.5% y/y) were much more resilient.
Canadian Non-Residential Building Intentions Fell 13%
The decline in non-residential building permits offered further evidence of a slowing economy. The value of non-residential permits fell to $4.3 billion in April, down 13% from last year. This was observed across all provinces, with government-backed institutional projects in Ontario being the exception.
Those focused on the words of policymakers may be surprised to see this dramatic slowdown. Despite frequent announcements, rapidly escalating subsidies, and billions in tax incentives—building intentions are still falling. This is potentially a sign that state-backed stimulus is turning counterproductive. Rather than creating an incentive to build, it’s become inefficient with more subsidies producing diminishing returns.
The slowdown of building intentions is unlikely to surprise those paying attention to the actual macro indicators. This mirrors broader macro trends: sluggish home sales, rising inventories, weaker consumer spending, and escalating trade tensions.
Easy explanation here. You know how everyone you’ve ever spoken to knows the government pays more for stuff? You might even know someone that charges the gov more.
The government is bringing those same skills to sourcing housing. Why build when the gov will pay you to build on top of the regular asset? All the joy of expensive housing, but now even taxpayers that own their own home get to kick in!
I feel like such an old timer reminding people of this but during the 1990s bubble the government tried to increase leverage, lower rates, and pay developers to continue to build.
None of it matters because the market is now so expensive that the average person that would normally buy at this point, no longer considers it viable and won’t for another 10 years. The pandemic wasn’t a recession, it was an induced recession—the only decline in economic activity was a forced decline. A real recession is very different, and the average person doesn’t make a buttload of cash when it hits.
No one in Canada gets a house unless they pay a punch of people who take their cut first. By other words, that’s called extortion.
DON’T WASTE YOUR MONEY ANYWHERE IN CANADA
BUY TEN TIMES MORE FOR YOUR MONEY IN THE USA
https://www.movesmartly.com/articles/inventory-surges-sales-slow-torontos-june-2025-market-report
What does the 13% drop in Canadian non-residential building permits suggest about the overall economic outlook?
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