Real Estate Stats Impress
Bob Finnigan, The Condo Guide
The I have just received the latest economic impact statistics for the homebuilding and professional renovation industry in the GTA and the super-size numbers never cease to amaze me. If you are one of more than 150,000 people working in the residential construction industry in the GTA, you already know what I’m talking about, but even if you’re not one of them, you are definitely affected by the success of the industry, for better or worse.
Before I get to the big numbers, let’s start with some percentages. The 40,611 housing starts in the GTA in 2006 represented 17.9% of total housing starts in Canada. That’s the lowest percentage in 10 years (we peaked at 28.1% of all housing starts in 2000), but all that means is that the rest of the country, particularly western Canada, is doing very well.
Super-size jobs How about the fact that one of every 17 jobs (six per cent) in the GTA is directly related to construction? Our local share of the jobs pool has been growing steadily since 2002. As with jobs, our contribution to national GDP sits at 6.3% on an Ontario-wide basis and would be no less if local statistics could be easily pulled out. That stat too, has been growing steadily since 2002.
Now for the really big numbers! Starting with new-home construction, the 40,611 homes we started last year were worth $7.3 billion and created just under 70,000 jobs. Our renovation activity, valued at $7.16 billion, generated another 68,664 jobs. Adding in the economic impacts of other expenditures related to residential construction and our total economic impact exceeds $16 billion and nearly 154,000 jobs – not bad, I say.
Super-size paycheques Another way to picture this story is to look at wages paid. For new homes, builders paid over $3.2 billion to workers last year. Renovators were just under $3.2 billion. Add in the “other” and the total wages paid hits a whopping $7.15 billion. As an aside, the average weekly wage for construction in Ontario is 103% of the average for all industries.
Now for the part that hurts a bit – taxes paid. Adding up all the income, sales and payroll taxes remitted by builders and renovators to the various levels of government, our industry contributed $3.75 billion in taxes last year alone – that’s not including corporate taxes paid or the development charges, permit fees and other charges paid to municipalities, nor the land transfer tax paid to the provincial government.
Super-taxed Looked at over the four years of data immediately available to me, the local homebuilding and renovation industry here in the GTA has generated nearly $60 billion in economic activity, created more than 600,000 jobs (technically speaking it’s person-years of employment) and paid out more than $27 billion in wages. I don’t have a four year tax total, but $13 to 14 billion would be a conservative estimate – OUCH!
Now, take our local numbers and multiply those by two for Ontario and more than five times for Canada, and your calculators would probably start giving you error messages, the numbers are that big. So, when I say that these numbers matter to you for better or worse, I am talking about the fact that as the health of the building industry goes up or down – so does the economy. Can you imagine if all the people we employed were unemployed? If our governments didn’t have the billions in tax revenues generated by our industry, who would pay or what would happen to education, health care and other social services?
Our governments pay a lot of lip service to the industry because they are well aware of these statistics and the implications of a reversal of fortune, but that’s pretty well where the respect ends. When it comes to taxation and regulation, our industry tends to get targeted – a real shame considering the added costs get passed onto homebuyers, through higher prices for the same home or less home for the same money.
I honestly fear that the economic impact of the residential construction industry gets taken for granted in good times and am seeing way too many examples of tax grabs and increased regulation on our industry. Our primary mandate as the Building Industry and Land Development Association is to defend the homebuyer’s interests in this environment and we gladly do so because what’s good for you is good for us. It happens to be good for everybody else too. I just hope our governments hear the message!
The Building Industry and Land Development Association (BILD), formally known as the Greater Toronto Home Builders’ Association and Urban Development Institute (GTHBA-UDI), is the voice of the residential land development, home building and professional renovation industry in the Greater Toronto Area. For more information, visit www.bildgta.ca.
Bob Finnigan is the 2007 President of the BILD (Building Industry and Land Development Association), and Principal and Executive Vice-President of Heathwood Homes and The Heron Group. He can be reached by e-mail at president@bildgta.ca, or by fax at 416-391-2118.
The Condo Guide Magazine is an excellent source of housing information for those looking for information on new condos in Ontario, Canada. We offer the most up-to-date information on new condominiums across the greater Toronto area.
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