In Toronto, it takes 32 months to get an approval for a new housing build – the longest out of any major Canadian city.
To say that the approval process moves at a snail’s pace would be an insult to snails. In fact, a snail could cross the 37-km width of the city, there and back, 13 and a half times before a housing permit is approved. Assuming that is, the snail is a common Roman snail, fully grown, and fully healthy, and avoids being damaged by the debris from the never-ending construction of the Eglinton LRT.
While there are factors that are outside of governments’ control that influence housing starts, such as the cost of materials or supply chain disruptions, there’s one factor that lies solely in the hands of government. It’s perhaps the biggest explanation for why Alberta experienced a 27% increase in housing starts during the same time Saskatchewan saw a 10% decrease: Red tape.
For those unfamiliar, red tape refers to the overly bureaucratic regulations that create time and financial barriers for individuals and businesses. This is not to say that regulations aren’t necessary – of course, most regulations are designed to keep workplaces and other processes safe and functioning smoothly. But sometimes government overreach goes a little too far, and everything gets dragged down.
Take, for example, the red tape around the creation of a basement apartment. The secondary suite incentive program is one the federal government has dumped millions of dollars into to help homeowners make the necessary renovations to build additional housing units. And yet, even if Toronto homeowners do manage to secure the funds for their project, they’d still have to acquire the four permits, six documents, pay $295 in additional fees, and wait up to six weeks to get everything processed.
During Red Tape Awareness Week last year, the Canadian Federation of Independent Business (CFIB) challenged provinces across Canada to reduce the red tape burden around housing and streamline permitting to help get shovels in the ground.
Fixing the housing problem matters for business owners. According to a 2023 CFIB survey, seven in 10 business owners agree that an increase in housing accessibility around their workplace would help address their labour shortages. Simply put, where housing is unable to be built, there are fewer and fewer options for businesses to find the labour they need. This is a compounding problem, because less skilled labour means fewer people qualified to do certain jobs – specifically those needed on construction sites –meaning fewer homes being built, and the situation worsens.
CFIB’s follow-up report on its challenge revealed that six out of the 10 provinces introduced regulatory changes aimed at making housing construction easier and were awarded “full points” for their efforts. Of them, only two did not see an increase in housing starts (B.C. and Ontario), while the other four (Alberta, Quebec, Nova Scotia, P.E.I.) saw an average increase of 26.7%.
Housing is often viewed as a municipal affair, and while city councils do have a large say in municipal housing policies, provinces also hold the power to expedite the process. In Ontario, new developments can be contested for years within the Ontario Land Tribunal (OLT), practically placing a full stop on new projects. However, in recent years, the Ontario government has introduced a series of changes, such as new powers to dismiss appeals and fewer reviews needed along the way, which will aid in streamlining the approval process. Further limiting the ability for disputes to escalate to the OLT – or similar bodies in other provinces – and expediting the dispute process itself could go a long way in speeding up a building permit’s timeline.
Among the other initiatives undertaken to cut red tape, new programs employed by Nova Scotia and Quebec offer some of the most promising opportunities to speed up permitting. In the case of Nova Scotia, builders with proven track records can see vastly reduced permit wait times thanks to minimized red tape. Cutting out two additional rounds of municipal and provincial reviews can shave 12 months off the approval process and help get shovels in the ground faster. And even though the approval process is slower than many other Canadian provinces, it is getting quicker, and the increase in housing starts within the province might be reflecting just how valuable cutting red tape is to the homebuilding process.
It’s up to governments to find ways to fix housing, which will in turn ease the labour problem. Pumping millions of dollars into projects won’t matter if developers can’t get the permits they need to start digging. Governments of all levels must find ways to reduce red tape, update zoning regulations, and expedite permitting to help small businesses spend less time on paperwork, and more time building their communities.
— Joseph Falzata is a Policy Analyst at the Canadian Federation of Independent Business (CFIB)