A coalition of development industry leaders is sounding the alarm over what was not included in

the federal budget

this week, suggesting that housing shortages will worsen due to the lack of programs to spur construction.

The Large Urban Centre Alliance, backed by the Building Industry and Land Development Association said the inaction will cost jobs as the construction sector pulls back on new homes amid falling sales.

“Sales are evaporating straight across the country,” said Justin Sherwood, chief operating officer of BILD. “As the (lack of) sales activity from years gone by works its way through the system, you are going to have a situation where 100,000 people have lost their jobs.”

BILD views the situation as dire and believes the government is overly focused on

housing starts

, which will likely shrink as a result of today’s sales shortfall, leading to fewer units being built in the future.

Year-to-date sales are down 82 per cent in the

Greater Toronto Area

, 81 per cent in the Greater Golden Horseshoe, 67 per cent in Vancouver, 40 per cent in Calgary, and 33 per cent in Edmonton, the group said. Montreal condominium apartment sales have dropped by 75 per cent.

Sherwood said his group was seeking the extension of the GST/HST rebate beyond just first-time buyers to all buyers and believes that the federal government budget’s language backs away from a commitment to reduce development charges by 50 per cent on housing.

There was also wide-scale disappointment that the budget had no mention of a multi-unit residential building program, or MURB, a popular policy from decades ago that the sector believes would recapitalize the industry.

Previous programs allowed investors to claim depreciation and certain other costs of an apartment building against unrelated income, effectively incentivizing the construction of rental units.

Estimates suggest that the program helped fund the construction of approximately 195,000 units at a cost at the time of $2.4 billion through lost tax revenue, Sherwood said.

“You are going to look at a significant decrease in housing starts and essentially no supply, setting up the preconditions for another affordability spike down the road,” he said.

While Sherwood’s group was disappointed, Canada’s largest apartment landlord, Starlight Investments, sees upside in the budget that will give it reasons to plan more development projects due to the infrastructure now being planned.

The announcement of a new fund should encourage his industry to build more multifamily units, even though his company is already actively involved in development, said Howard Paskowitz, vice-president of development and public affairs at Starlight.

Ottawa’s Build Communities Strong Fund, to be administered by Housing, Infrastructure and Communities Canada, proposes $51 billion in funding over a decade starting in 2026-27.

Paskowitz said tying it to municipal and provincial projects will help spur development. “It will all come down to how it gets implemented, and that’s where you need strong co-ordination from all levels of the government and the private sector,” he said. “Infrastructure is key because you can’t provide homes if you can’t flush the toilets.”

  • Feds must follow through on budget investment measures: business leaders
  • Canadians will have to wait for boost from Carney’s budget: economists

Hope of the sector getting a boost from the demand side through immigration was scuttled by Ottawa, which said it is stabilizing permanent resident admissions to 380,000 through 2028 and reducing new temporary resident admissions from about 670,000 in 2025 to 385,000 in 2026.

“The biggest key to solving this crisis is increasing the supply, and if you limit the demand that obviously makes a difference too,” said Paskowitz, who said the right kind of immigration will be bring in the workers to build that housing.

• Email: gmarr@postmedia.com