Why Is Canada The Slowest Country in The World for Issuing Building Permits?

In January 2021, Canada set a new record for the value of building permits issued which rose 8.2% to $9.9 billion. 

According to Statistics Canada, this was mainly driven by the residential sector – meaning more people and companies were choosing to build on, renovate, or break ground on houses and apartments. You can get a good look at a bunch of numbers and statistics on their website, but the point is that there is tremendous demand for permits in Canada. 

Yet they’re so slow to actually get issued. There is so much red tape keeping new housing from being built and there’s not enough room for the four million people who’ve been added to Canada’s population in the last ten years.

The Housing Issue in Canada is a REAL Problem

We can see it in Kingston, but it’s not an issue that is only here and dear to us – it’s an issue facing all Canadians. Young Canadian adults are finding it more difficult than any other generation to buy a home. Students are moving away from home and can’t find a place to live because residences and rentals are full. 

As we see in Kingston, many of the students who come here move into the University District homes. The reason isn’t solely because these areas give independence away from the authorities of a residence, but it’s because there is no room in residence for them. Student housing is a real problem, so they move into the surrounding neighbourhoods and take homes that could have been rented by younger families, professionals, and other residents of Kingston. Don’t take this as an attack on out-of-town students – we know you need a place to live. The issue is there isn’t anywhere else for everyone else to go as a result.

“The Liberals have had years to try to address the housing shortages across Canada. They have been wasting time, playing at the edges and coming up with these gimmicky programs to try to deal with issues that are very local in many situations,” says Tom Kmiec, MP for Calgary Shepard, during a House of Commons debate in early June. “The unbelievably low interest rates today are also driving people to compete for a limited amount of supply in many markets across Canada.” 

This comment from one of our Members of Parliament makes it sound like housing is short because it’s too easy for young Canadians to get lower interest rates and find houses. While he might be right, we know that this can’t be the sole reason for the shortage. There’s a shortage of housing because new builds aren’t starting construction fast enough to keep up because municipalities drag their feet when it comes to granting building permits. 

Read what Mr. Kmiec’s colleague, Ziad Aboultaif, MP for Edmonton Manning, had to say at the same House of Commons debate mentioned above:

“While this is unique in every city across the country, there is a substantial amount of red tape and municipal regulations that prevent the construction of new housing. While we obviously cannot legislate municipal affairs, the federal government can work with the provincial governments and municipalities to improve the situation. We can encourage cities to cut red tape and make building new homes easier to alleviate the supply issues in many of our larger cities.

Mr. Aboultaif goes on to add: “The federal government already issues gas tax rebates, carbon tax rebates, and more to municipal governments. Why not other transfers such as from the thus far useless infrastructure bank or any one of the other dozens of programs? The municipal rules and regulations are a massive driver of the increase in housing prices.”

So Why is it That Canada is the Slowest Country in the World for Issuing Building Permits?

“Mr. Aboulatif was asked if cutting this “red tape” would create more problems such as disfunctional communities, unsafe houses, and a mismatch in the kinds of housing being built – ultimately increasing costs.”

“What I am saying is simple. If their policies are working, and if their plan is working, why do we have a problem? The member knows it is not a normal problem, and Canadians know how much Canadians are suffering. If one talks to any average Canadian, whether over the screen or in real life, the first thing they will talk about is how confused, uncomfortable, and unhappy they are with what is going on with the housing market.”

Although we may not know for sure why our municipal governments make the process so difficult, we along with many other Canadians are hoping that perhaps we can bring the rules, processes, and applications requirements back to the table. Let’s consider the slow speed in which it takes for things to get moving. 

Perhaps there’s a need to expand building departments and hire more experienced people who can take on some of the workload. Perhaps some of the steps can become virtual. If I can think of a few ideas in the span of writing this blog post, I don’t see why it has to be so difficult for building departments to think of innovative ways to approach the housing crisis from their perspective as well.

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