Housing: Canada’s Economic Engine

October 7, 2025

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This blog was provided by Brad Jones, Chief Development Officer, Wesgroup.

We usually talk about the housing crisis in human terms: families squeezed by rents, young people priced out of ownership, communities struggling with affordability. All of that is true, and it matters.

But housing is more than a social issue. It’s one of the most powerful economic engines in this country – for workers, for governments, and for business. And right now, that engine is stalling.

The housing sector adds more than $140 billion to Canada’s GDP and supports 1.2 million jobs. That’s one in 13 across the country. More people work in housing than in oil and gas, agriculture, or tech.

Think about that. National debates focus on how to grow Canada’s tech sector or secure our energy future – and rightly so. But housing is already bigger. It’s already one of the largest contributors to growth, one of the biggest sources of government revenue, and a cornerstone of Canada’s economic stability.

Every housing project ripples through the economy. Trades and construction jobs, yes, but also manufacturing, transportation, finance, retail. Lumber mills, cement plants, appliance stores, moving companies. Governments take in billions in taxes tied to it. When housing is being built, the economy hums. When it slows, everything else slows with it.

And it’s slowing. Fast. Housing starts are down sharply, 58% year on year in Toronto alone. Sales of new homes have collapsed. Projects are being shelved because the math doesn’t work anymore: costs are up, risks are higher, approvals drag on for years.

Of the 1.2m jobs tied to housing, Altus estimates the new construction sector employs about 536,300 Canadians: 236,300 directly on construction sites, the rest in industries that supply us. Based on today’s preconstruction sales, between 105,000 and 170,000 of those jobs are at risk. That’s not a blip, it’s a crisis. Governments stand to lose billions in tax revenue, while every home we don’t build today makes affordability worse tomorrow.

When the financial crisis put 15,000 automotive manufacturing jobs at risk, governments acted aggressively. In housing, the stakes are far greater, and bold action is essential if we want to deliver the homes this country needs.

Because, while construction slows, demand isn’t going anywhere. Canada’s population, although now stabilizing, has seen years of record growth. Immigration targets are ambitious. Younger generations are forming households. So we face a supply contraction set against relentless demand. More than an affordability issue, that’s an economic problem with a compounding effect.

And then there’s the pipeline of talent. Construction already has an aging workforce, with scores of experienced people nearing retirement. If younger workers walk away because they don’t see stability, who’s going to build the homes we’ll need five or ten years from now?

There’s no doubt housing will be front and centre in the upcoming federal budget. The real question is whether government will treat it as the economic engine it truly is. Canadians don’t need another round of announcements, they need homes delivered.

That means unblocking the system that currently makes building unviable and drives affordability further out of reach: cutting costs and delays, rewarding results instead of promises, supporting the trades and supply chains that keep projects moving, and planning for scale. Canada hasn’t built at the pace we need in generations. If we’re serious, tinkering at the edges won’t cut it.

And this matters far beyond the home building industry. If workers can’t afford to live near jobs, businesses can’t recruit or retain talent. If households aren’t being formed, consumer spending slows. If projects are cancelled, the investment and tax revenues vanish. Capital goes where the pipeline is predictable – and right now, Canada isn’t sending that message.

We talk about trade infrastructure, energy security, and immigration policy as competitiveness issues – and they are. But housing belongs in the same conversation. Ports, pipelines, and power grids matter. So do homes. If the budget applies a competitiveness lens to trade and resources, it must do the same for housing.

The risks of inaction are obvious: higher unemployment, slower growth, weaker public finances, and affordability slipping further away. The opportunity is just as clear: one of the best returns available to this country. More jobs. Stronger revenues. Healthier communities. A more competitive Canada.

Housing isn’t just where Canadians live. It’s the foundation of our economy. One of the biggest engines we’ve got. The 2026 federal budget is the chance to stop it from stalling,  and to get it firing again.

Industry must adapt and innovate to deliver more homes. Governments must clear the path and make it easier to build. And the broader business community must recognize that housing underpins not only their own growth, but the prosperity of Canada itself.