The city of Toronto is taking a stand on the sky-high price of building materials, which a local councilor describes as a growing threat to the city’s economy.
The concerns are included in a member’s proposal that received preliminary approval from the city council during its Thursday meeting.
The proposal calls on the Toronto mayor to ask provincial and federal governments “to address the rising cost of building materials, especially timber, to determine if action is needed to ease costs locally.”
Coun. Paul Ainslie made the proposal with the support of Coun. Michael Thompson.
The prices of building materials have made breathtaking gains during the pandemic. According to reports from Statistics Canada, the price of timber increased by 68 percent between March 2020 to March 2021, while manufactured metal products and building materials increased by nine percent.
Despite much higher prices for various materials, Statistics Canada found that overall demand for construction also accelerated, which can be attributed in part to “a desire for more living space during the pandemic” and low interest rates.
The unusual combination of staggering prices and hectic demand has some worried that a possible breaking point could be near, which could result in an unsustainable increase in housing costs or the destruction of the local construction industry.
Prices for 2’x4s, plywood through the roof
Peter Lux, owner of the Toronto-based construction company Homes by Lux, said prices have risen faster and reached higher levels than at any point in his 16-year career as a business owner.
“It’s very common over the years that things go up by five percent, 10 percent … but when we go up by 300, 400 percent, it’s shocking,” he said.
Lux said some products even exceed estimates from Statistics Canada, e.g. Pre-cut 2’x4s currently selling for around $ 13 each compared to $ 3.39 in early 2020. He said plywood sheets have also taken a similar leap, from around $ 21 last year to $ 65.
He said the price of materials is now causing some customers to stop certain projects, although he noted that his overall business has not slowed down during the pandemic.
“For larger projects, people tend to care so much, but I see it in some of the smaller projects,” Lux said.
Ontario’s decision to consider housing construction as a significant activity, even under the latest provincial comprehensive emergency declaration and home booking, has probably also contributed to the rise in prices.
Construction demand ‘did not fall as deep as expected’
In an email to CBC Toronto, Ontario’s Department of Natural Resources and Forestry offered an explanation for the rising cost of timber, but it did not say any policy changes were being considered to slow growth.
The ministry said the price increase was due in part to the closure of some mills in Ontario in the spring of 2020, which were not followed by a similar decline in timber demand.
“As it turned out, the housing construction markets did not fall as deep as expected and there was an unexpected increase in demand from do-it-yourself home renovation projects,” the ministry said in a statement.
The province also said that the slowdown in production in British Columbia is contributing to ongoing supply issues.