COVID-19 'softens' Winnipeg construction and development says city official

The head of Winnipeg's property and planning department shared some insight into the economic impact of the COVID-19 health crisis, including a drop in permit applications and a rebound that could be months or more away.

John Kiernan told councillors on the committee for planning, property and development (PP&D) to expect the second quarter of 2020 "will be the tough one."

The committee met on Monday for the first time since early March and heard how applications to the City of Winnipeg for permits for varying kinds of were "softening."

Kiernan told councillors there has been a reduction of commercial permits from 20 to 25 per cent over the same time last year, and a drop for permits for home renovations of between 13 and 15 per cent.

The PP&D director says there has also been a decline in the number of applications for constructing new homes.

Kiernan says there is more confidence in larger projects where physical distancing protocols can be observed. 

There were 950 applications for commercial permits and 1600 for residential permits to the city in the first quarter of the year, but Kiernan says many of those were applied for before the health crisis began to take hold of the economy.

"I don't want to be naive. Common sense tells you they will slow down," Kiernan told the committee.

"We think there will be a reasonable recovery in August and September," Kiernan said.

Councillor Janice Lukes isn't so sure.

The Waverely West representative is concerned the pandemic health emergency may create an economic crisis that could force Canada to close its borders to hundreds of thousands of new immigrants.

"We [the City of Winnipeg] has been growing through immigration. Is Canada going to bring in 300,000 new immigrants every year when millions [of Canadians] are out of work? How is that going to impact our growth and our revenues?" Lukes wondered.

Kiernan told councillors his staff are monitoring the construction and development sectors closely, along with the Winnipeg Construction Association and the Manitoba Home Builders Association.

The department is allowing permits to be held for a year over the usual six months and is looking at deferring fees to stimulate applications. 

Kiernan says his department doesn't really have the ability to create fiscal stimulus, but may be able to help create project readiness for residents and developers.

Any rebound, Kiernan says, is dependent on when people get back to work, confidence in the investment community, and whether there is a so-called second wave of infections of COVID-19.