Housing starts in Ontario saw a slight decline last month after a relatively strong start to the year, and the province is still far from its previous target of 1.5 million new homes by 2031.
Data from the Canadian Mortgage and Housing Corporation reveals a decline in housing starts nationally in May of about five per cent compared to 2025.
Local figures in Ontario recorded a decline of three per cent, with work starting on 5,661 new units over the past month, compared to 5,866 units in May 2025.
Annual housing totals were still much better this year, with 18 percent more housing built in 2026 than in 2025.
Despite its better performance, Ontario is still far from its stated target of building 1.5 million new homes between 2022 and 2031.
To date, the province has started work on 26,084 new units this year; Ontario has a target of 175,000 new homes by 2026. At the current rate, 42 per cent of the year has already passed and Ontario is only 15 per cent of its target.
The Ford government has been keeping an eye on the battered housing industry for years.
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First, Premier Doug Ford blamed rising interest rates for the housing shortage, and promised new homes would grow “like mushrooms” if prices fell.
But when borrowing costs fell, the housing market did not recover. Ford said building permit fees and permits from cities are to blame, a problem his administration has repeatedly tried to address through legislation.
Ontario then launched a new home tax incentive for first-time buyers. Several months after the regulations were introduced, the prime minister said he knew they would not work, and suggested they needed to be expanded.
As part of the 2026 budget, the Ford government expanded the offer to apply to all new home buyers in the province. It also partners with the federal government to reduce construction costs paid by home builders.
The measures, Housing Minister Rob Flack said, had led to a sharp spike in demand for new homes.
“Housing affordability has been out of reach for too many people for too long. And that’s why, under the leadership of Premier Ford and our great finance minister, we’ve cut the HST,” Flack said recently in the legislature.
“What are we seeing? We’re seeing a game-changing event. I’ve talked to builders all over Kingston, Milton, Mississauga, London, Hamilton — this is a sea change. We’re seeing a buzz in the sales office. We’re seeing residential deals being closed.”
Despite all the rumours, the Ford government is still struggling to reach its target of 1.5 million new homes.
As part of the effort, the government set housing targets in major cities, and offered financial incentives to cities that met their targets.
Even after adding basement units, long-term care beds and student housing by 2024, the province only reached 80 per cent of its 125,000 target last year.
The target target in 2025 is 150,000; now it is 175,000 per year until 2031.
The government late last year admitted that its own goal was unlikely to be achieved, with the Finance Minister calling it an “easy target.”
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