Canadian municipalities issued $8.8 billion worth of building permits in December, up 6.0% from November and the fourth consecutive monthly increase. The gain was largely due to higher construction intentions for multi-family dwellings and commercial buildings, with both components hitting record highs.

1. Building Permits: Canada –
December 2018
Paul Young CPA, CGA
March 1, 2019

2. FR
Paul Young - Bio
• CPA, CGA
• Academia (PF1, FA4 and MS2)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

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Agenda
• Building Permits by month (month over
month trend)
• Building Permits (Non-Residential vs
Residential)
• Housing Prices vs Construction Employment
and Housing Starts
• Infrastructure spending
• Infrastructure Bank / Projects

4. FR
Introductory
• Canadian municipalities issued $8.8 billion worth of building permits in December,
up 6.0% from November and the fourth consecutive monthly increase. The gain
was largely due to higher construction intentions for multi-family dwellings and
commercial buildings, with both components hitting record highs.
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5. FR
Building
Permits
(month over
Month Trend)
Source -
https://www150.statcan.gc.ca/n
1/daily-
quotidien/190206/dq190206a-
eng.htm

6. FR
Building Permits (month over Month Trend)
Source - https://www150.statcan.gc.ca/n1/daily-quotidien/190206/dq190206a-eng.htm

7. FRHousing Starts, Construction Employment and Average Real Estate
Prices – Residential
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8. FR
Justin Trudeau (LPC) vs Stephen Harper (CPC) – Majority Mandate
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9. FR
Infrastructure
spending
Source -
https://www.canadianmetalwork
ing.com/blog/canada-bets-big-
on-infrastructure
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Infrastructure
Bank
• There are risks with infrastructure bank (market value,
interest rates, etc.
• Transit systems required capital.
• Transit systems are also heavily subsidized by
taxpayers -
https://www.slideshare.net/paulyoungcga/a
nalysis-of-public-transit-canada-august-2018
• Funding from the Infrastructure bank has slowed to a
crawl -
https://business.financialpost.com/news/economy/can
ada-infrastructure-bank-announces-first-investment-as-
gaps-persist-in-ottawas-186-7-billion-spending-plans
• Approved Projects
• Montreal Transit -
https://www.theglobeandmail.com/business/artic
le-canada-infrastructure-bank-loaning-128-billion-
to-montreal-electric/
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Construction Outlook - 2019
Source - https://www.on-sitemag.com/features/canadian-construction-outlook-
positive-for-2019-but-last-years-setbacks-could-cast-a-long-shadow/
The new LNG facility and the completion this fall of Suncor Energy Inc.’s Fort Hills oilsands complex outside Fort McMurray, Alta. also signal a major shakeup
for Western Canada’s economic and construction status quo.
The 2016 oil price slump dented capital spending in Alberta, but 2019 will be the first year no major greenfield sites are under construction, De Jong says.
“That huge engine of the oilsands has really kind of grinded, not so much to a halt, but to kind of an idling speed. That is a major hollowing out of
construction opportunity for workers not just in Alberta, but beyond.”
Construction in the energy industry is expected to shift farther west as work ramps up in Kitimat. Infrastructure and residential work in and around Vancouver
will also keep B.C. builders busy.
Across the country, the same can be said for the Greater Toronto Area, where work on new transit lines and multi-unit residential projects are expected to
continue apace through 2019.
The industrial and commercial building segments are also forecast to remain healthy in Ontario and Quebec, though investment may not remain at its current
level, according to the latest Conference Board of Canada analysis. Canada’s non-residential construction industry is likely to post its best-ever performance in
2018, the think tank says, but the robust growth in the industrial and institutional markets is likely unsustainable as business confidence and spending
intentions decline.
Scotiabank is more optimistic about the situation in Ontario and Quebec, where non-residential spending has long outpaced the country as a whole.
“Industrial and commercial activity — concentrated in Toronto but also present in other major cities — should propel Ontario’s continued expansion,”
Perrault says. “The industrial and commercial sector is also expected to support Quebec’s economic growth, with mining investment and a port expansion
providing an additional lift.”
Drifting further east, De Jong says the Atlantic Canada face real challenges as a result of low capital investment. This “chronic stagnation” creates a tough
environment for construction, he says. The economies in the four Atlantic provinces are expected grow at a slower rate than the rest of the country over the
next two years, while harboring higher unemployment rates, according to Scotiabank’s fourth-quarter analysis.

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Construction Risks- 2019
Source - https://www.on-sitemag.com/features/canadian-construction-outlook-
positive-for-2019-but-last-years-setbacks-could-cast-a-long-shadow/
• C69 and govt policies - No setback in 2018 is expected to have a ripple effect as pronounced as the abrupt halt to
work on the Trans Mountain project. The on-again, off-again effort to twin the existing pipeline running between
Edmonton and Burnaby, B.C. hit its latest hitch when the Federal Court of Appeal ruled in August that the review
process was inadequate. Ottawa purchased the project from U.S.-based Kinder Morgan Inc. and has vowed to get
the pipeline built. While the project would be a multibillion-dollar boon for the construction industry, the
perpetual hang-ups and still uncertain fate of the pipeline have experts concerned about the impact the project
could have on Canadian capital investments as a whole. “With an election in 2019, all parties will need to
demonstrate that Canada is not only open for business, but also easy to deal with,” Van Buren says. “If we look at
the example of Kinder Morgan… they lost confidence because the project was so difficult to move forward.”
• Rise in mortgage rates along with household debt
• SNC Lavalin affair - https://www.hilltimes.com/2019/02/18/criminal-charges-raises-spectre-snc-lavalin-takeover-
feds-180b-infrastructure-plan-will-go-ahead-firm-excluded-experts-say/189153
• Capital flowing to port expansions - https://www.slideshare.net/paulyoungcga/canada-port-analysis-and-
commentary-supply-chain-management
• Fiscal Management (Deficit and Debt) - https://www.on-sitemag.com/features/infrastructure-report-2018-
canadas-spending-plan-starts-hitting-its-stride/ or http://www.rbc.com/economics/economic-reports/canadian-
fiscal-reports.html

13. FR
Summary
• Liberals $186B over 12 year plan has
been slowed to crawl
• Municipalities are complaining
infrastructure money from the federal
govt is coming up short -
https://www.watercanada.net/rccao-
federal-and-provincial-governments-
failing-to-fund-infrastructure/
• Building permits continue to be
sluggish
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