It was a banner year for the value of residential building permits across Canada in 2020, despite early concerns the pandemic would devalue housing prices and shut or slow down construction.
According to the most recent data from Statistics Canada, British Columbia led the pack with a 27.8 per cent increase in the value of residential building permits in November over the month before. Across the country, their value rose 10 per cent in November to a total of $6.4 billion compared to the previous month.
Nationally, the value of residential building permits increased 34 per cent compared to the same time last year.
The data shows the seasonally adjusted value of building permits — not actual construction starts, or the number of housing units — which is the estimated cost of completing the project. Every province except Nova Scotia and Prince Edward Island showed a monthly increase in the value of residential building permits.
Statistics Canada economist Michael Straw says a few major projects in Vancouver and on Vancouver Island helped push the data in B.C.’s favour in November, including a $25-million apartment complex in Surrey and a $23-million complex in East Vancouver. Ontario also showed strength in this sector, with near-record highs in the past four months.
‘Nobody knew what was coming’
Ben Taddei, chief operating officer of B.C.-based real estate developer Conwest Group, says 2020 was a good year for his business.
“We’re lucky and we’re humbled by the fact that we can keep operating in such a difficult time for so many people,” Taddei said.
Unlike Ontario and Quebec, B.C. never shut down the construction sector in order to mitigate the spread of COVID-19.
Taddei says there were concerns in March that construction would shut down on the West Coast as well — concerns reflected in a sharp drop in the value of building permits that month across the country.
“The first 45 or 60 days … Yeah, they were interesting,” he said. “Nobody knew what was coming.”
In June, the Canadian Mortgage and Housing Corporation’s housing market outlook mentioned that housing sales and construction had dropped and house prices would likely fall because of economic uncertainty.
But Taddei says worries about the construction sector in B.C. were mostly dampened when the province announced the sector was an essential service and would remain open, albeit with precautions in place.
Neil Moody, CEO of the Canadian Home Builders’ Association of B.C., says one part of the market that took a bit longer to recover was home renovations, which represents about half the jobs in the sector.
Moody says many homeowners didn’t want contractors inside because of the risk of contracting the virus. But those fears abated as better information became available about how to reduce that risk, Moody says, and as more people spent time at home “looking at the cracks in their walls.”
Call for Canada-wide shutdown
Some health experts have called for all sectors of the economy to temporarily shut down in order to bring the number of COVID-19 cases close to zero.
Caroline Colijn, an infectious diseases specialist at Simon Fraser University and member of a new initiative called COVID Strategic Choices, says a national approach to mitigating the spread of the virus wouldn’t make exceptions for sectors like construction.
B.C.’s Health Ministry says there has been a smattering of outbreaks at residential and commercial construction sites in the Lower Mainland and in Kamloops last fall.
On Jan. 7, Provincial Health Officer Dr. Bonnie Henry said health officials are closely monitoring sources of transmission and will adjust existing health orders as necessary.
Shutdown would have severe economic impact
But Moody and others in the sector say construction sites aren’t a major source of transmission. Moody says many worksites are outdoors and have plenty of space for workers to stay two metres apart, and can easily implement other safety measures like handwashing stations.
The impact of a potential shutdown would have severe repercussions on the economy, Moody says. He points out that residential construction represents $235.05 billion, or nine per cent, of the province’s GDP based on 2019 figures.
“It would be disastrous, I think, for [a shutdown] to happen,” Moody said.
“People need homes. And it’s important to keep the economy strong, as long as it’s done safely.”