Barbara Patrocinio

Reporter

Ontario is on track to miss its 2031 target of 1.5 million new homes by a staggering 708,000 units if current building trends persist, according to new forecasts.

Ontario’s pledge to build 1.5 million new homes by 2031 is facing a widening reality gap, with new forecasts showing the province could fall hundreds of thousands of units short, even after once again broadening its own definition of what counts as a “home.”

Recent data from the Canada Mortgage and Housing Corporation (CMHC)

, visualized by housing expert Mike Moffatt, shows how far off the province is.

CMHC projections showed annual housing starts dropping into the low-60,000 range from 2025 onward, far below the 150,000 to 175,000 annual targets set out in the Ford government’s 10-year pledge.

The government has tried to narrow the gap by expanding its housing definition to include long-term care beds, retirement home suites, and post-secondary student residences, categories not recognized in federal housing statistics.

In 2024, these additions accounted for just over 20 per cent of the province’s reported total: 14,381 additional residential units such as basement or laneway suites, 2,807 student beds, 2,278 long-term care beds, and 1,825 retirement home suites.

Even with these added categories, Ontario achieved less than 80 per cent of its 2024 target of 125,000 units. Without them, the total would have been 73,462, less than 60 per cent of the goal.

Moffatt said the CMHC forecast paints a grim picture because it projects housing starts in the GTA and assumes flat growth for the rest of Ontario, already a generous assumption given recent declines in housing starts outside the GTA. “We are trending towards having 60,000 to 70,000 starts a year, despite the Ontario government’s target for about 175,000 homes a year going forward,” Moffatt said.

The new data shows only 15 municipalities hit their 2024 targets, while another eight reached at least 80 per cent. Larger cities like Ottawa, Mississauga, and Brampton fell short.

The CMHC data suggests that the gap will only grow.

While the Ford government’s pledge requires annual targets to rise from 110,000 in 2023 to 175,000 in 2026 and beyond, estimates done by Mike Moffatt based on the CMHC data available suggests Ontario will hover just over 60,000 annual starts for the rest of the decade, less than half of what’s needed.

The GTA’s share would average around 25,000 to 28,000 starts a year, with the rest of Ontario contributing another 35,000 to 37,000.

The gap between actual starts and the government’s target has been widening dramatically since 2023. By 2025, the shortfall could approach 90,000 homes in a single year. From 2026 onwards, Ontario would need to build nearly three times its forecast pace to hit the annual 175,000 target. Over the final six years of the pledge period, the cumulative shortfall could exceed 680,000 homes.

At the current pace, Ontario would fall short by roughly 708,000 homes over the nine years from 2023 to 2031, more than half of the entire 1.5 million pledge. The shortfall could cost Ontario $6B and 41,000 jobs, experts say.

That projected shortfall is based on comparing the Ford government’s own annual housing targets (rising from 110,000 units in 2023 to 175,000 a year from 2026 onward,) with CMHC’s forecasted annual housing starts, which fall into the 60,000–63,000 range for the rest of the decade. Adding up the yearly gaps between the targets and the CMHC projections from 2023 through 2031 produces a total deficit of roughly 708,000 homes, or more than half of the 1.5-million-home pledge.

CMHC figures for the first six months show just 27,400 housing starts in areas with populations over 10,000, a 25 per cent drop compared to the same period in 2024. If that pace holds, Ontario will finish the year well short of its 150,000 target.

The Ford government has acknowledged 9,125 new rental starts between January and June, but has not released comprehensive housing start figures for 2025, citing delays from updating data systems and the snap provincial election call in February.

A spokesperson from the Minister of Housing said in a statement that the province is “proud to have led the way in eliminating the full 13 per cent HST on purpose-built rental housing and in offering a 75 per cent rebate on the provincial portion of the HST for new homes priced up to $400,000.”

“We have been clear: we need partnership from the federal government to continue reducing HST and GST on homes.”

The statement also said that Minister Flack outlined in a letter to Minister Robertson, his federal counterpart, that Ontario “looks forward to the federal government delivering on its commitment to remove the HST on new homes.” This letter wasn’t provided upon request.

The province’s Building Faster Fund, which rewards municipalities that hit at least 80 per cent of their assigned targets, has so far done little to reverse the slowdown. The 2023 numbers, which included long-term care for the first time, barely cleared that year’s 110,000-unit target, and only by folding in those additional categories.

 about the CMHC forecast showing starts falling to around 60,000 per year from 2025 onward, meaning Ontario would need to triple its pace to meet annual goals, Premier Ford said he will bring up the full removal of the HST, federally and provincially, and not only for first time home-buyers, to the Prime Minister while on their meeting that is set for next Monday.

Moffatt estimates that eliminating both federal and provincial housing taxes could cut costs by more than 10 per cent, potentially adding 10,000 to 15,000 extra homes annually. “That certainly makes a difference, but it doesn’t get us to 150,000,” he said, adding that Ontario could move unilaterally on tax relief without waiting for Ottawa. “Given the depth of the crisis, I don’t think we have time to wait.”

Ford also pointed to broader economic conditions as the main culprit.

“What’s causing this problem, number one, is the uncertainty. People are nervous as anything out there [about] whether they’re going to have a job or not,” Ford said. “Number two, the governor [of the] Bank of Canada has to lower those interest rates… even half a percent or a full percentage, you’d see the market free lightning there.”

He also floated a mix of policy changes, including cutting development charges (DCs), easing the federal mortgage stress test.

“If everyone pitches in, the province, the cities, and the Feds, it’s never just one level of government. We need everyone pitching in,” Ford said, adding that “we’re going to get out of this little rut” by creating conditions that give people the confidence to build and buy homes.

Beyond taxes, Moffatt said high building costs are the main obstacle, with raw material prices, tariffs, and development charges all squeezing builders. “We’ve gotten to a point now where it’s just not profitable to build in the GTA. The prices are so low that they don’t cover costs,” he said.

Failing to act carries its own economic risks. A prolonged slowdown at current building levels could cost 41,000 jobs in the GTA alone, according to Altus Group, and drain more than $6 billion a year in combined tax revenue from all levels of government, Moffatt said. “There’s both a cost to acting and a cost to not acting,” he noted.

Kirstin Jensen, Ontario Home Builders’ Association VP of Policy, Advocacy and Relationships, said that “we’d like to see action on things like removing the provincial portion of the HST on new home construction, or matching federal moves to reduce costs.”

“Our members are telling us every day that the environment for building is getting harder, not easier,” she added.

Cathy Polan, president of the Ontario Real Estate Association, called the shortfall “very disturbing,” but said there are solutions if all levels of government collaborate. She pointed to skyrocketing development charges and slow permitting as major barriers, and highlighted prefabricated homes as an underused tool to boost supply.

“A prefab home is on a permanent foundation, and you wouldn’t know it walking down the street,” Polan said. “We need to get past outdated ideas of what they are. They’re beautiful houses, and they can be built faster.”

Richard Lyall, president of the Residential Construction Council of Ontario (RESCON), says the industry is entering a “massive correction.” The key problem, Lyall says, isn’t just the slowing pace of construction, but the cost structure weighing it down.

“The biggest challenge we face are the taxes, fees, and levies on new housing,” he said, pointing to development charges (DCs) as the worst offender. “It’s the worst tax ever created in the history of our country, completely regressive. The people it hurts most are the ones who can least afford housing.”

Ontario forecasted to build less than half of 1.5M homes pledged by 2031, costing the province $6B and 41,000 GTA jobs

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