There's a line that gets repeated a lot in B.C. housing policy circles: the province needs to build more homes. More supply. More starts. More cranes in the sky. And for years, the government has been passing legislation and setting targets to make that happen.

The February jobs numbers have a different story to tell.

B.C. lost 20,200 jobs in February, according to Statistics Canada's Labour Force Survey, making it the weakest month for provincial employment since the pandemic. The losses were broad, but two sectors stood out: construction shed 6,900 positions, and finance, insurance, real estate, rental and leasing dropped another 5,400. Together, those two sectors account for more than 60 per cent of the month's losses. B.C. was also responsible for roughly a quarter of the 84,000 jobs Canada lost nationally in February, one of the worst months for the country's labour market in years outside of the pandemic.

The provincial unemployment rate held at 6.1 per cent, but not because things are fine. B.C.'s population actually declined by 2,300 people from January to February, as immigration restrictions and interprovincial migration thinned the labour force. When fewer people are looking for work, the unemployment rate can stay flat even as jobs disappear. That's what happened here.

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What's Behind the Job Losses

The construction sector's bad February needs a bit of context. Chris Atchison, president of the B.C. Construction Association, isn't particularly alarmed. He pointed out that construction jobs in B.C. were still up 10,400 year-over-year in February, and that the sector goes through natural dips from time to time. His bigger concern, he said, is actually the opposite problem: too few skilled workers. Many contractors still can't find enough trained tradespeople, and a significant portion of the current construction workforce is over 45 and moving toward retirement.

"We know that we're playing a critical role in B.C.'s economy, from building the housing that we continue to need and the major infrastructure projects that are being planned," said Atchison. "We still have a workforce shortage on our hands."

That's a reasonable point for the broader construction sector, which spans everything from hospitals to transit to commercial real estate. But when you zoom into residential construction specifically, the picture gets darker.

Jock Finlayson, chief economist for the Independent Contractors and Businesses Association, argues that residential construction is already in a recession. CMHC's Housing Market Outlook projects BC housing starts will trend lower through 2026, a reversal from earlier forecasts that had anticipated modest growth. The agency says rental construction, which had been unusually strong due to policy incentives and favourable financing, will also start to slow in the second half of 2026 as vacancy rates rise and rent growth softens.

Finlayson's own forecast is considerably more pessimistic: he projects only around 34,000 housing starts in B.C. this year, well below the province's own targets, and says even that figure might prove too optimistic.

"The current situation in terms of residential construction is the worst I've seen in decades," he said. "For owner-occupied housing, the demand has softened because population growth is zero or even slightly negative. You've also got a cost of delivery crisis in the industry. For a lot of potential homebuyers, housing is still very expensive in B.C., especially new builds, because the cost of actually bringing a unit to market is very, very high here."

He's not wrong about the cost side. Rising permitting and approval costs are adding tens of thousands of dollars to the price of new builds, and those costs get passed to the buyer. So B.C. ends up in an uncomfortable position where demand is soft and supply is still expensive to create. Neither side of the equation is moving in the right direction.

Developers are also running into financing problems. Finlayson noted that banks have pulled back on lending for new projects as presales dry up. The presale model, where roughly 60 to 70 per cent of a building's units are sold before construction is fully financed, has been under severe stress. Without that early demand signal, lenders won't advance the money and builders won't break ground.

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Home Sales Aren't Providing Any Relief

The real estate job losses make more sense when you look at what's actually happening in the market. BCREA reported 4,516 residential sales across B.C. in February 2026, down 9.7 per cent year-over-year. The average MLS residential price fell 2.9 per cent to $932,243. Total sales dollar volume dropped 12.3 per cent. And this wasn't concentrated in one region: sales declined in every region of the province compared to a year earlier.

To put that in perspective, February's sales came in nearly 33 per cent below the ten-year average for the month. That's not a blip. B.C. has now been running roughly 20 to 30 per cent below long-run average sales levels for about three years, and 2026 hasn't started any better.

Greater Vancouver saw sales fall 8.8 per cent year-over-year, with average prices down 1.6 per cent to $1,206,180. The Fraser Valley posted a 7.6 per cent decline in transactions, with benchmark prices for detached homes down 8.6 per cent compared to February 2025. Some smaller boards saw even steeper drops: Chilliwack was down 31 per cent and Kootenay fell nearly 30 per cent.

BCREA chief economist Brendon Ogmundson, in a recent statement, said the market "continues to struggle, with sales declining from every region in the province compared to the same time last year." He added that the industry just needs sales to return to something closer to normal levels before things can stabilize, noting that prolonged below-average activity has forced some workers out of the industry altogether and caused layoffs in sectors that support real estate transactions.

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The Policy Gap

What makes this particularly frustrating is that B.C. has spent the last several years passing some of the most aggressive pro-housing legislation in Canada. Zoning reforms, housing targets for municipalities, streamlined permitting. The intent was to flood the market with new supply. And the province can point to 41,000 homes completed in 2025, up 20 per cent from 2024, and Vancouver's 60 per cent year-over-year jump in housing starts in February, as evidence that the pipeline has been working.

But those completions reflect investment decisions made two and three years ago, when immigration was surging and demand looked bottomless. The projects being greenlit today, or more accurately, not being greenlit, reflect a very different reality.

Budget 2026, released in February, pulled back $1.4 billion from the province's housing strategy over three years and closed the Community Housing Fund indefinitely. The BCREA responded by saying the budget "lacks measures to address the looming decline in new home construction," and Ogmundson said there was "unfortunately not a lot to like from either a macroeconomic or housing perspective."

The budget also introduced new tax measures on development lands and applied PST to professional housing-related services, moves the BCREA said would increase soft costs and further challenge the economics of new projects at exactly the wrong time.

Jairo Yunis, director of policy for the Business Council of B.C., put the construction and real estate losses in a wider frame. He noted that B.C.'s unemployment rate has risen two percentage points over the past three years, not because of mass layoffs but because hiring slowed while the labour force kept growing. "Population growth has been outpacing employment growth," he said, though that dynamic is now shifting as population starts to shrink.

He also flagged weakness across the province's goods-producing sectors: forestry, mining, oil and gas, and agriculture have all seen little or no employment growth, with some declining. The private sector, in short, is not pulling its weight.

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A Warning Worth Taking Seriously

There's a version of events where this all corrects itself. Interest rates stabilize, immigration settles at a lower but still-positive level, presales pick up again, and the pipeline refills. BCREA's Q1 2026 forecast projected MLS sales in B.C. rising 12 per cent to about 78,690 units this year, driven by pent-up demand finally moving off the sidelines.

But BCREA has also warned that the current slowdown carries a longer-term risk. In a report comparing today's market to the period following the 2008 recession, the association cautioned that a prolonged stretch of weak sales, rising inventory, and collapsed new construction could set the stage for a sharp price surge when demand eventually returns and there's nothing to buy. The shortage that gets built today, by not building, becomes tomorrow's affordability crisis.

For now, the February jobs report is a data point that cuts through a lot of policy optimism. The sector that was supposed to be leading B.C.'s housing solution is losing jobs. The market that was supposed to be recovering is still running a third below normal. And the province's budget, rather than stepping in, stepped back.

It's worth taking that seriously.