N.L. builders' association says problems need fixing so industry can help tackle housing crisis
Labour shortages and high interest rates are hampering new housing starts, says executive officer
With a national housing crisis also being felt in Newfoundland and Labrador, governments are looking to the residential construction industry for help tackling it.
But industry players say the problems they face need to be fixed promptly to enable them to do that.
According to Alexis Foster of the provincial chapter of the Canadian Home Builders' Association, a major obstacle contractors and trades have been facing is a lack of skilled workers.
"We're finding a lot of people are having a very difficult time actually finding labour, skilled tradespeople to come in and help them as they build these homes," Foster told CBC News.
"We've been advocating to the federal government for when they are bringing in new immigrants to Canada that they ensure that they are looking for immigrants who have experience in the residential construction sector."
She said the shortage has contributed to a lower number of new housing starts in the province this year — she estimates about 50 per cent less were registered between January and July 2023 than in the same period in 2022.
At the same time, she said, 5.8 million homes need to be built nationally over the next 10 years to meet anticipated demand. Given that regular production is about 2.3 million homes — less than half — over the same period, Foster called it "a massive undertaking."
But the association hopes its advocacy with multiple levels of government will lead to an increase in housing starts, she said.
"We need these homes. We need affordable, safe homes for people in our province and all across Canada to live in," she said.
"We're very, very hopeful that the government will listen and try to put in some of these supports."
Those supports include lower interest rates, incentives for first-time homebuyers to do renovations, and a re-evaluation of the federal GST/HST new housing rebate, which hasn't been updated since 1991. Foster said the association has asked that the new housing rebate be doubled to keep up with rising prices.
"Housing prices have more than doubled in that amount of time," she said.
Another recommendation, she said, is a change to the housing stress test — a calculation that aims to ensure a homebuyer will still be able to pay their mortgage if interest rates rise — as she said it has overcorrected Canadian mortgage arrears. Those, she said, are at a historic low of 0.16 per cent, compared with common arrears of three to four per cent, or five to six per cent in the U.S.
For contractors, increased supply costs, a lack of skilled workers and high interest rates are the biggest concerns, said Steve Porter, owner of S&L Porter Homes in Conception Bay South.
"A lot of the first-time homebuyers … are going to existing [homes] because some are an older, lower price. I was talking to some of the real estate agents. The issue they've got there is, they look at some of the older stuff that's lower price and it needs a ton of renovations," said Porter.
"So a lot of those people are being barred out of the market because of the interest rates. and we are noticing it."
And while his company is "still doing fairly well," he said, labour shortages have led to a slower construction pace.
"Our numbers are the same as last year, very much, but it's harder to get it done because of labour," said Porter.
"It started through COVID, really. And it's just gotten worse and worse. But it's not only our own employees. It's all our [subcontractors] and here in the St. John's area, we're all sharing the same subtrades. So it seems to be taking a little longer to get the houses to close."
While increased construction to tackle the housing crisis would bring welcome extra work for contractors, Porter agrees the task will be hard to take on without significant measures to increase the industry's labour force.
Porter, who employs three foreign workers himself, looks to immigration as the solution.
"We need more people moving in. And it's not only here, it's right from here to Vancouver Island," he said. "We need more people in Canada."
Nevertheless, Porter is hopeful about the industry's outlook.
"I'm an optimist. I figure if you're not an optimist, you shouldn't be in business in Newfoundland," he said.
"I think that the future is great. I think once the interest rates settle down we're going to see it move again. I look forward to the next few years."
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