Canada’s housing crisis is often framed as a problem of supply: not enough homes are being built to keep up with demand. While that diagnosis is correct, the deeper question is why housing construction has slowed to a crawl in the first place.
A growing chorus of industry leaders, economists and policymakers point to a common denominator: an outdated and excessively complex planning and approvals system that has become one of the biggest barriers to building homes.
Lengthy approvals, excessive regulatory requirements and layers of red tape have slowed residential construction to the point where, in some regions, activity has nearly ground to a halt.
If Canada is serious about restoring housing affordability, governments at every level must undertake a fundamental overhaul of how housing projects are approved.
The economic toll of stalled construction
In Ontario, the cost-to-income ratio for housing has climbed above 9:1, placing home ownership increasingly out of reach for many families in the Greater Toronto and Hamilton Area.
These numbers signal a broader economic problem. Tens of thousands of construction jobs have already disappeared across the province. Without meaningful intervention, Ontario could face a GDP reduction of between 1.5 and 2.5 per cent over the next two years due to the collapse in residential construction.
Behind these troubling figures lies a planning and approvals system that has grown increasingly slow, uncertain and costly.
A recent letter from the Housing Advancement Coalition — which RESCON is a part of — to Prime Minister Mark Carney and Ontario Premier Doug Ford argues that housing delivery is often constrained not by zoning rules on paper, but by the cumulative impact of delays, technical requirements and escalating fees embedded in municipal approval processes.
Years of delays built into the system
In many communities, projects that conform with provincial housing policies still face site-specific rezonings, minor variances and extended negotiations that can take years to resolve. Even after a project receives approval, late-stage conditions such as rising development charges or parkland requirements can suddenly alter the financial viability of a project after millions of dollars have already been invested in planning. As a result, projects stall, investors pull back and fewer homes are built.
Compounding the problem is the discretionary nature of many local decisions. Municipal councils frequently endorse policies supporting density or intensification, only to narrow them during implementation or delay them in response to local opposition. This creates uncertainty for builders and developers, discouraging investment in projects that may take years to navigate through approvals.
According to testimony before the Senate’s Standing Committee on Banking, Commerce and the Economy, the development process in Canada is among the slowest in the industrialized world. Canada ranks second-last among countries in the Organization for Economic Co-operation and Development when it comes to approval timelines for development.
Hamilton, Toronto among the worst offenders
Even before a formal application is submitted, developers often spend two or three years in preliminary discussions with municipalities simply to ensure their proposals will be accepted for review.
Once the application is filed, the average time for a municipality to render a decision is nearly a year. In some cities the wait is far longer. In Hamilton, approvals can take more than 31 months. In Toronto, it can take more than 25 months.
Industry leaders estimate it now takes an average of 11 years from the first meeting with municipal officials to the completion of a new housing community.
Such timelines are clearly untenable, especially in times of a housing crisis. Yet the system has changed little over time. In some respects, it has become even more cumbersome.
Digitization lags across municipalities
Multiple layers of regulation, redundant technical reviews and inconsistent municipal processes have created an approval framework that lacks transparency and accountability.
We have argued that part of the solution lies in modernizing how approvals are handled. Many jurisdictions around the world have adopted fully digital planning platforms, building information modelling and standardized approval processes that dramatically reduce timelines.
In Ontario, however, progress toward modernization has been inconsistent across municipalities. Some cities have adopted digital tools, while others continue to rely on fragmented systems that slow decision-making and create administrative bottlenecks.
Ottawa must do more than pilot programs
The federal government also has a role to play. The Senate committee examining the housing crisis has recommended that Ottawa work with provinces and municipalities to establish best practices for development approvals and use financial incentives to encourage adoption.
Programs such as the Housing Accelerator Fund were designed to encourage municipalities to remove barriers to housing development. But witnesses told the committee that the program has struggled with implementation and enforcement, and some municipalities have simply declined to participate.
The passage of Bill C-4, which eliminates the GST for first-time buyers on new homes up to $1 million and reduces it for first-time buyers on new homes between $1 million and $1.5 million, is a positive step. But if Canada is serious about increasing housing supply, governments must move beyond pilot programs and partial reforms.
This doesn’t mean abandoning oversight or weakening environmental and safety standards. But it does mean eliminating redundant reviews, standardizing requirements and ensuring that projects consistent with approved planning frameworks can proceed without years of additional negotiation.
The status quo is no longer sustainable. Governments must confront that reality.
