Canadian policymakers are helicoptering money to stimulate building, but it doesn’t appear to be working. Statistics Canada (Stat Can) data shows the total value of building permits fell sharply in April, dropping to the lowest monthly volume in nearly a year. The annual decline was so large it was amongst the largest since 2020.
Canadian Real Estate Building Plans Saw One of The Sharpest Declines Since 2020
The total value of Canadian building permits in seasonally adjusted billions of dollars.
Source: Statistics Canada.
Canadian building intentions hit a roadblock last month. The total value of building permits fell to just $11.7 billion in April, down 14% from last year. The real (inflation-adjusted) value is 16.4% lower, down to the weakest level in nearly a year. It marked the third-largest annual drop for any month since 2020.
Canadian Residential Building Plans Fell Sharply, Especially In Vancouver
All segments showed declines, but the largest pullback was in the residential sector. Residential permits were 14.6% lower than last year, coming in at $7.4 billion in April. The lion’s share of that decline was related to multi-family units (-20.5% y/y), with Vancouver accounting for nearly $1 billion of that drop. Building intentions for single-family homes (-1.5% y/y) were much more resilient.
Canadian Non-Residential Building Intentions Fell 13%
The decline in non-residential building permits offered further evidence of a slowing economy. The value of non-residential permits fell to $4.3 billion in April, down 13% from last year. This was observed across all provinces, with government-backed institutional projects in Ontario being the exception.
Those focused on the words of policymakers may be surprised to see this dramatic slowdown. Despite frequent announcements, rapidly escalating subsidies, and billions in tax incentives—building intentions are still falling. This is potentially a sign that state-backed stimulus is turning counterproductive. Rather than creating an incentive to build, it’s become inefficient with more subsidies producing diminishing returns.
The slowdown of building intentions is unlikely to surprise those paying attention to the actual macro indicators. This mirrors broader macro trends: sluggish home sales, rising inventories, weaker consumer spending, and escalating trade tensions.
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