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Builders and developers also contribute a lot to the greater community through donations that benefit charities and non-profit organizations
Things may be shaky with the economy nowadays, but there are some things that remain constant in a sea of uncertainty. One is the importance of the construction/building industry to the economy in the Greater Toronto Area (GTA) and Ontario.
Yes, things have slowed down some, as real estate is a cyclical business and recent circumstances have been unusual, to say the least. Throughout the cycles, however, new home building soldiers on to create as many of the homes we need as possible.
In March 2022, Altus Group Economic Consulting and BILD published a report called “The Construction Industry Driving Economic Recovery,” which, of course, we were experiencing then.
BILD retained Altus to conduct an analysis of the size and scale of the construction sector (new residential, non-residential, commercial and repair) and its role in the economies of the GTA and Ontario.
To give you an idea of impact, in 2021, the sector contributed approximately $60+ billion to overall economic activity in the Greater Toronto Area (GTA) alone, which helped support over 235,000 person-years (unit of measurement for the amount of work done by an individual throughout the entire year) of employment in the region in the same year, as well as $17 billion in wages, salaries and employee benefits.
In that year, construction spending accounted for nearly 8 per cent of the Gross Domestic Product (GDP) in both the GTA and Ontario, and construction investment in the GTA amounted to about 1.4 per cent of all GDP Canada-wide. Annually, construction activity also generates significant tax revenue for all levels of government.
The report refers to total construction spending as a “pillar of strength” for the economy during the previous five years. During the period between 2016 and 2021 in Ontario, the construction industry was the fourth largest sector and the seventh-fastest growing sector out of 24. In other words, the construction industry was, and still is vital to our economy.
Putting aside economic statistics, BILD, builders and developers contribute a lot to the greater community through donations, events to benefit, and awareness of non-profit organizations and charities.
Their generosity goes a long way to improving the quality of life for their customers and the residents in the areas around where they are building. From supporting Toronto’s SickKids Hospital to educational facilities and arts organizations, professionals in the residential building industry add a deeper dimension to the concepts of “home” and “community.”
It’s easy to criticize the real estate industry without taking the big picture into account. Today’s prices and designs are far from the whims of builders. They are restricted by municipal and provincial controls that keep them factoring in continually rising approval and development costs, which amount to approximately $1.9 billion per year at the municipal level, along with $216 million per year in parkland cash-in-lieu revenues.
It will be interesting to see the picture paints of 2022 and 2023 when they are available. Regardless of circumstances, we owe a debt of gratitude to the construction industry for helping to keep our economy buoyant in all climates.
Michael Klassen is the Broker of Record and Partner at Eleven Eleven Real Estate Services. For more information, visit https://1111realty.ca/