This presentation discusses the construction sector in Canada. The focus will be labour, wages, building permits, housing starts and the issues facing the construction sector in Canada
3. Agenda
■ Housing Starts
■ Construction Employment/Wages
■ ConstructionGDP
■ Building Starts
■ Key Comments
■ Summary
4. Housing Starts / Canada
https://www.cmhc-schl.gc.ca
• In October, the seasonally adjusted annual rate of urban starts decreased in BritishColumbia, Quebec,
the Prairies, and in Atlantic Canada, but increased in Ontario.
• Rural starts were estimated at a seasonally adjusted annual rate of 16,797 units.
5. Wages and Employment
Stats Canada
• Wages are under pressure in 2016.The overall wages have dropped in 2016.
• Employment is up by 41K jobs in 2016.
7. Building Starts
Stats Canada
■ Municipalities issued $6.9 billion worth of building
permits in September, down 7.0% from August.
Quebec, British Columbia and Ontario recorded
the largest declines. The overall decrease was
attributable to lower construction intentions for
non-residential buildings, led by commercial
structures.
8. Key Comments
■ The report also predicted growth to take a hit from an expected decline in real estate sales activity, which it said
will follow the federal government's recently announced measures intended to stabilize the housing market.
Source – http://www.huffingtonpost.ca/2016/10/19/boc-canada-economic-outlook_n_12559170.html
■ The “innovative financing” part touted in the government’s infrastructure plan is the creation of the Canada
infrastructure bank (CIB).The basic rationale for the CIB can be found in theAdvisory Council on Economic
Growth brief that says Canada has a large infrastructure gap — we’re currently not spending enough on
productive infrastructure that could improve our long-run growth. Public infrastructure in Canada is largely
owned by cash-strapped provincial and municipal governments, which lack the means to significantly scale up
their investments in big projects of national importance. At the same time, long-term institutional investors
(such as pension funds, banks and insurance companies) have lots of money they need to invest somewhere. In
this low-interest-rate environment, these investors would be keen to work with government to invest in long-
term capital projects, including building or maintaining highways, bridges, rail, ports, airports, broadband
capacity or power transmission. But they are holding off, we’re told, because they need:
– a pipeline of large potential projects with clear timelines;
– assurances of independence from political interference in selecting and managing projects (e.g. an entity that
operates at arm’s length from government);
– financial experts in government with whom they could conduct these deals; and
– a way to generate on-going revenue from public assets (e.g., through user fees).
■ Source - http://policyoptions.irpp.org/magazines/november-2016/the-blanks-in-the-fall-economic-statement/
9. Summary
■ Liberals released the budget in March 2016. Money has slowed to crawl when it comes to
flowing infrastructure moneys to provinces.
■ Infrastructure Bank has been received with mixed reviews
■ Federal Government is moving a head with carbon taxation/price for carbon
■ Only two provinces are predicted to run surpluses in 2016-2017 (British Colombia and Quebec)
– Ontario has debt and deficit issue which may influence the funding of infrastructure projects
– Alberta is still recovering from the Fort McMurray Fire as well as low oil prices
■ Municipalities have internal issues
– Policing Costs
– Labour/Pension costs
– Land availability