Building and development brings benefits to the GTA
In many of my columns, I focus on the need to increase housing supply in the GTA and the regulatory and policy barriers that are leading to shortfalls. This issue, I’d like to highlight the benefits that the building and land development sector brings to the region. When all of the data is unpacked, many people are surprised to find that the industry is an economic engine of the region.
Each year, members of our industry construct about 40,000 homes of various types — detached single family homes, townhomes and highrise apartments — as well as countless commercial buildings and, increasingly, purpose-built rentals. To get the job done, they employ people in more than 120,000 jobs, both on-site in the trades and construction positions that carry out the building, and off-site in the planning, design, architectural, engineering, financial and support services, that enable the physical construction. These are local jobs that will stay local. The industry adds more than $7 billion in wages to the GTA economy, which in turn get spent and support the people and companies that provide goods and services to those employed in construction and development. New home building contributes $17 billion in investment value in the GTA.
When home renovations and repairs, including those carried out by BILD’s RenoMark renovators, are added to the mix, the numbers are even more impressive. The home renovation and repair sector employs people in more than 150,000 jobs, bringing the overall total of jobs created by new-home building, renovation and repair to about 270,000, a significant portion of the GTA job market. The renovation and home repair segment has a payroll of $9 billion and represents $16 billion in investment value.
All this activity results in new communities and renewal of existing housing stock — buildings and infrastructure where people can live, work and play. It also results in significant tax revenue for all levels of government, which is reinvested in the programs and services that support our society.
Aside from the income and corporate taxes that result from homebuilding and renovations, each home constructed contributes to the public coffers. A 2018 study commissioned by BILD and conducted by Altus Group found that the fees, taxes and charges applied by all levels of government and rolled into the cost of a new home accounted for 22 per cent of an average GTA single-family home (or $186,500) and 24 per cent of an average highrise apartment (or $121,500).
About a third of that is the HST that flows to the federal and provincial governments. Approximately another third consists of development charges that go to the regional and municipal governments to fund infrastructure, roads, transit and municipally provided social services such as affordable housing and daycare. Other government charges on new homes include parkland dedication, which municipalities collect to support new parks; land transfer tax, which goes to the province; and in the case of Toronto, municipal land transfer tax, which goes to the city.
Every new home built provides a place for a family to live, supports three full-time jobs, generates economic activity that supports the broader economy, and lastly, provides tax revenues for all levels of government, supporting government programs, services and infrastructure enjoyed by all residents of the GTA. The building, land development, and professional renovation industries are truly engines of our economy.
Dave Wilkes is President and CEO of the Building Industry and Land Development Association (BILD).