Why housing starts are sizzling in Alberta, while they fizzle in Ontario

OTTAWA — Alberta and Ontario are two of Canada’s biggest provincial economies, but they’re going in opposite directions when it comes to building homes for their residents.

Alberta posted a second straight record year for housing starts in 2025, breaking ground on 54,858 new dwellings . This was a 14 per cent jump from its then-record of 47,827 starts in 2024.

It also led the country in per capita housing starts for the second year in a row, generating more than one in five starts across Canada while being home to about 12 per cent of its population.

“What that tells me is this: Alberta is obviously on a hot streak, but that does not happen by accident. It’s the result of concentrated efforts by the government of Alberta and our partners,” said Alberta housing minister Jason Nixon when giving reporters an update on the province’s housing numbers last week.

Meanwhile, Ontario saw housing starts shrink for the fourth consecutive year in 2025, tumbling to 65,376. This was a 12 per cent drop-off from the 74,573 units builders in the province broke ground on in 2024.

All told, Ontario mustered just over 10,000 more housing starts than Alberta in 2025, despite having more than three times the population. Both provinces welcomed between 110,000 and 125,000 new residents in the 12 months between July 2024 and July 2025.

Ontario Premier Doug Ford promised to build 1.5 million new homes over 10 years during the 2022 provincial election but has since broken ground on about a tenth of that number .

Nixon told National Post that, while he’s not an expert on Ontario’s housing market, he suspects provincial and local regulations have a lot to do with this split.

“I would submit to you that Toronto’s probably a harder place to clean up red tape than Calgary or Edmonton,” said Nixon.

Nixon said his government got ahead by getting out of the way, focusing on reducing the number of steps between putting forward a proposal to build new housing and getting shovels into the ground.

“We figured out pretty early that the housing problem we were dealing with was a supply problem, so we focused on … making sure our industry could actually build, and that we were removing barriers at all levels of government,” said Nixon, pointing to initiatives like an Alberta government web portal where builders can report housing delays.

He added that the province has expanded rent assistance to enable thousands of low-income Albertans to secure rental housing.

Eric Lombardi, a Toronto-based housing advocate, said that, while red tape does play a role, another big drag on Ontario’s housing numbers is the levy municipalities place on developers before they even break ground on new housing projects.

“The economics of why development charges drag down housing stock are pretty simple: once you start to add additional charges onto a new thing, that are not reflected in what it actually costs to build said thing, you’re going to see a mismatch between supply and demand,” said Lombardi.

Lombardi noted that development fees can add more than $100,000 to the cost of building a new home in markets across the Greater Toronto Area.

Homebuyers in Ontario also pay a 13 per cent HST on new homes, although some can apply for a rebate .

Lombardi added that a lack of stable capital funding from the province has made municipalities increasingly dependent on development fees as a source of revenue.

“Ontario, at a provincial level, has uniquely done almost every economic mistake … when it comes to how we build housing in the province,” said Lombardi.

Housing expert Mike Moffatt says the big numbers being reported in Alberta are, ironically, partially a reflection of tens of thousands of Ontarians moving there in the early 2020s .

“Housing starts are something of a lagging indicator when it comes to the state of the market,” said Moffatt. “A housing start today reflects decisions that were made two or three years ago.”

The Alberta government launched a major talent recruitment campaign in 2022, blanketing large urban centres in Ontario and elsewhere with “Alberta is Calling” ads .

Moffatt said there’s some evidence of the ads’ effectiveness with their target audience.

“A lot of the people who were coming to Alberta tended to be younger, higher-income families, who would just naturally consume more housing than the average interprovincial migrant,” said Moffatt.

Moffatt said the two provinces’ similar population growth rates can be misleading, noting that newcomers to Ontario have tended to be foreign students and other international migrants who take up less housing.

He added that he expects Alberta’s housing boom to cool down in the coming years, noting that its population growth has already started to taper off .

Moffatt says that there are still plenty of things that Ontario, and Ottawa for that matter, can learn from Alberta’s approach to homebuilding.

“(Alberta) shows the importance of keeping development charges, as well as things like HST, down to a manageable level,” said Moffatt. “Because (sales tax) is only applied to new homes, it basically acts like a construction tax.”

The Liberal government promised ahead of last spring’s federal election campaign to waive GST for first-time homebuyers on homes bought for $1 million or less and legislation to implement this promise is currently making its way through the Senate.

Conservative housing critic Scott Aitchison says the impressive numbers from Alberta underscore the federal Liberals’ record of overpromising and underdelivering on housing.

“We’ve said all along that the cost and the pace of government is what’s slowing down housing in this country,” said Aitchison. “It seemed almost like Prime Minister (Mark) Carney understood this issue during the election campaign but has subsequently done nothing about it.”

Aitchison also noted that there’s been no follow-through on the Liberals’ campaign promise to cut municipal development charges in half for certain types of residential housing.

“Fundamentally, it’s a very simple problem: the places where it’s the slowest, most painful and most expensive to build are the places that are getting nothing built,” said Aitchison.

National Post
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