Public policy researchers spill a lot of ink on housing affordability, but we pay a lot less attention to residential construction as an employment sector. As the Ontario election approaches, we should be discussing how to combine improving housing affordability with growing good and stable jobs in residential construction. Doing so will require governments to stop deferring to private developers and take the lead on rental housing development. 

Let’s start with the latest figures.

In 2024, Ontario saw the largest decline in residential housing construction (housing starts) in the country: down 16 per cent. British Columbia saw a smaller decline of nine per cent. In contrast, housing starts went up by 26 per cent in Quebec, 20 per cent in the Atlantic Region, and 25 per cent in the Prairies. 


While these figures have been reported in the media, fueling debates about the effectiveness of government policies and programs aimed at boosting housing supply, we haven’t heard much about residential construction jobs. If housing starts are declining, employment must also be down. 

That’s what the data shows. In 2024, Ontario lost nearly 1,300 residential construction jobs, a 2.1 per cent drop compared to 2023. This was the biggest drop in Canada. 


When we look at the three-year period (2022 to 2024) marked by rising and high interest rates, residential construction jobs in Ontario declined further than in the rest of Canada. For the first half of the period, the trend was similar everywhere, with job growth dropping to a very low point in the beginning of 2023. 

In the second half of the period, residential construction job growth recovered slightly in most parts of the country, with a modest upward trend in the Atlantic Region. In contrast, Ontario saw a clear downward trend, leading to the 2024 job losses. B.C. also closed the period in the red. 


During that period, residential construction wage growth in Ontario was one of the worst in the country. Workers in the province saw a negligible 0.3 per cent wage increase when adjusted for inflation. The only province that performed worse than Ontario was Quebec, where real wages dropped by 2.7 per cent. Manitoba had the largest wage increase in this period, at 13 per cent. This was at least in part due to significant minimum wage increases between 2021 and 2024, which put upward pressure on low wages. The average growth in Canada was three times higher than in Ontario. 


The two-birds-one-stone solution 

Most federal housing policies—and all Ontario housing policies—consist of providing incentives to developers, hoping they will build more housing, and assuming increased supply will bring about affordability. This approach fails consistently to achieve its stated goals.

The other, less discussed shortcoming of this approach is that it resulted in job instability and job losses in the residential construction sector. 

Private markets respond to profitability, and little else. Developers and private investors will take their foot off the gas if high returns are not in sight, and they can afford to do so. Developers will hold onto idle land whose value grows significantly over time, while investors can take their casino chips to another table. 

It’s a different story for the people who actually build homes. Building firms and workers need shovels in the ground because they only earn money if they work.

The obvious solution is to get governments back into building housing. The Ontario government should directly engage building firms to construct non-market housing, including social housing, non-profit housing developed in partnership with the non-profit sector, and co-op housing developed in partnership with the co-op sector. The outcome would be more housing starts, more jobs, and more permanently affordable housing. 

As party platforms become available, we must pay attention to whether parties continue to delegate the responsibility for housing affordability and job growth to private developers—which will likely deliver the same poor results—or whether any party will show the willingness to take the lead and embark on a new and more promising path.