Canada has a housing supply problem. That much everyone agrees on. But the next question, the one that actually matters for policy, is trickier: why aren't we building faster?

It's not because builders don't want to build. It's not because the demand isn't there, or because the land doesn't exist. A growing body of evidence points to something more structural and more frustrating: a planning and approvals system that is, by almost any international measure, one of the slowest in the world. And that slowness is costing people homes.

Canada ranks second-last among OECD countries for development approval timelines, sitting at 37 out of 38 in the most recent international comparison. We are three times slower than the United States. That ranking is based primarily on data from Toronto, which is a meaningful caveat, but other research suggests Toronto is not an outlier within Canada. It's a representative case.

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What "Slow" Actually Means in Practice

To understand the scale of the problem, it helps to stop thinking about approval timelines in abstract terms and start thinking about what they mean on the ground.

According to the Residential Construction Council of Ontario, it now takes an average of 11 years from a developer's first meeting with municipal officials to the completion of a new housing community. Eleven years. From the first conversation about a site to a family moving in.

Within that timeline, each stage compounds the last. Developers routinely spend two to three years in preliminary discussions with municipalities before they can even submit a formal application, working to ensure their proposal will be accepted for review. After submission, the average time for a municipality to render a decision is close to a year. In Hamilton, approvals can stretch beyond 31 months. In Toronto, beyond 25 months. And those are just the zoning and planning decisions. Site plan approvals, building permits, and conditions attached to approvals pile further delays on top.

Even projects that are already consistent with provincial housing policies and zoning frameworks often still face site-specific rezonings, minor variance hearings and extended negotiations, particularly when they trigger local opposition. That's not a hypothetical. It's the standard experience for developers across southern Ontario.

The cost of those delays is real and it shows up in the price of every home. Altus Group, which tracks construction economics closely, estimates that it now takes 25 to 30 per cent longer to build a comparable project than it did five or six years ago, a consequence of both labour challenges and the compounding uncertainty built into long approval timelines. Every additional month a project sits waiting for a decision is a month of carrying costs, inflation risk and financing pressure that eventually gets baked into the asking price.

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The Numbers Behind the Stall

The numbers coming out of Ontario's housing market right now are hard to look at squarely.

In the Greater Toronto and Hamilton Area, single-family home sales are down 71 per cent from recent levels, and new condo sales have collapsed 90 per cent, according to RESCON. For some context on that condo figure: new condo apartment sales in the GTHA totaled just 1,599 units in all of 2025, the lowest annual result since 1991. Full-year sales fell 91 per cent below the ten-year average and have declined 95 per cent since 2021. In Q4 2025, only 262 units sold across the entire GTHA. A record 28 active projects totalling more than 7,200 units were cancelled in 2025 alone.

The cost-to-income ratio for housing in Ontario now exceeds 9:1. RESCON has warned that Ontario could face a GDP reduction of 1.5 to 2.5 per cent between 2026 and 2027 directly linked to the collapse in residential construction. Tens of thousands of construction jobs have already been lost across the province.

The approvals system didn't cause all of this. Higher interest rates, weak investor demand and a surge of completions from pandemic-era construction all played a role. But the approvals system made the underlying problem worse over years, and it's now making recovery harder. Developers can't even get banks to finance new projects without pre-sales, which require buyers who are confident enough to commit years ahead of occupancy. When buyers don't know whether a project will survive five years of municipal negotiations, that confidence is hard to build.

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The Discretionary Problem

One of the most corrosive features of Canada's planning regime isn't the delays themselves; it's the unpredictability.

Municipal councils often endorse policies that support density in principle, then quietly undermine them during implementation, narrowing interpretations or delaying decisions when residents push back. A project can conform fully with provincial housing targets and still face years of additional review because of discretionary elements in the approval process. And late-stage conditions, such as development charge increases or new parkland requirements, can alter the financial viability of a project after millions of dollars have already been spent on planning and design.

That uncertainty functions as a tax on building. It rewards developers who have enough capital to absorb years of carrying costs and punishes smaller operators trying to bring modest infill projects to market. It also makes housing investment less attractive broadly, which is part of why presale activity has collapsed so sharply in markets like Toronto while cities with faster, more predictable approvals, like Calgary, continue to see stronger starts.

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What the Senate and Industry Groups Are Calling For

The Standing Senate Committee on Banking, Commerce and the Economy recently completed an examination of Canada's housing crisis, and its findings align closely with what industry groups have been saying for years. The committee's core message: affordability will not improve unless governments dramatically increase supply, and supply will not increase without removing the cost and structural barriers that prevent new homes from being built.

The Senate committee recommended that Ottawa work with provinces and municipalities to establish best practices for development approvals and use financial incentives to encourage adoption. It pointed to Canada's construction sector as one of the least digitalized in the OECD economy, and urged adoption of modular and factory-built housing alongside digital planning platforms.

RESCON's parallel submission to Ontario's 2026 budget outlined the same priorities in practical terms: province-wide digitization of planning approvals, standardized designs, broader use of as-of-right zoning, development charges rolled back to 2015 levels for a three-year period, and the elimination of both provincial and municipal land transfer taxes on new, never-occupied homes for three years.

These aren't fringe demands from an industry lobby. The OECD's 2025 Economic Survey of Canada recommended simplified approvals, electronic processing and stronger reliance on pre-approved building plans as the most effective tools for improving approval timelines. Germany, often cited as a model, has adopted industrialized factory-built construction and digital planning at scale, and RESCON members who visited recently came back with a clear message: we are far behind.

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What Ottawa Has Done, and Where the Gaps Are

The federal government's Housing Accelerator Fund was designed to incentivize municipalities to remove barriers to housing development, offering funding in exchange for measurable reforms to approval processes. In theory, it was exactly the right kind of tool. In practice, the Senate committee heard testimony that the program has struggled with implementation and enforcement, and that some municipalities simply declined to participate.

On the demand side, Bill C-4 received Royal Assent on March 12, 2026, formally eliminating the federal GST for first-time buyers on new homes up to $1 million and reducing it on a sliding scale for homes up to $1.5 million. The maximum saving is $50,000. Ontario has announced plans to mirror the rebate with its own provincial portion, which would bring combined savings in that province to as much as $130,000, though the provincial legislation is not yet law.

That's real money, and it matters for affordability. The Canadian Home Builders' Association was blunt in its response to Royal Assent: "Having this relief hung up in parliamentary process was a big problem for an already challenged industry." The association also noted that extending the rebate beyond first-time buyers to include move-up and downsizing buyers would generate a further supply boost by freeing up entry-level homes, a recommendation that sits on the shelf for now.

But GST relief is demand-side policy. It puts more buying power in the hands of buyers. That's useful when the constraint is affordability, but it doesn't help much when the constraint is that not enough projects are getting approved to build in the first place. A buyer with an extra $50,000 in their pocket can't use it to buy a home that was never built because the development sat in approvals for four years and eventually got cancelled.

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Why This Matters Beyond Ontario

It's worth saying clearly: the approvals problem is not unique to Ontario. It's most acute there, because that's where population pressures have been highest and land costs have been most sensitive to development friction. But the World Bank ranking that put Canada second-last in the OECD was based on a Toronto case study, and Infrastructure Canada's own review of the methodology acknowledged that the finding "accurately reflects the situation in Toronto", even while noting the broader dataset limitation.

In British Columbia, CMHC projects housing starts declining through 2026, and economists like Jock Finlayson of the Independent Contractors and Businesses Association are forecasting starts around 34,000 units for the year, well below provincial targets, precisely because the economics of bringing new projects to market remain broken. The Okanagan sits within that provincial trend. Local market conditions differ from Metro Vancouver, but the same underlying forces, high soft costs, unpredictable approval timelines, collapsed presale activity, press on every new residential project regardless of location.

Fixing the approvals system won't solve everything. It won't replace the investor demand that has evaporated from condo presales. It won't immediately rebuild buyer confidence in markets that have been in correction for two years. And it won't undo the interest rate cycle that set all of this in motion.

But it is the foundational problem. Without faster, more predictable, and more consistent approval processes, every other policy lever, GST rebates, zoning reforms, housing targets, operates against a ceiling. You can reduce the cost of buying a home while the cost of building one stays sky-high. And you can mandate more density on paper while projects that would deliver it get ground down in process.

"Incremental or piecemeal measures will not be sufficient," RESCON president Richard Lyall said in February. He's right. The housing crisis did not emerge in a single budget cycle, and it will not be resolved in one either. But a genuine overhaul of how Canada approves housing, grounded in digitization, standardization, and an end to the discretionary uncertainty that makes long-term development investment feel like a gamble, is the place to start.

The status quo has been expensive. At this point, the cost of continuing it is becoming visible in the numbers.