COVID-19 lumber shortage causes serious residential building project delays

Ontario Construction News staff writer

A lumber shortage caused by COVID-19 supply and demand pressures is causing delays and price increases for residential builders and renovators, the Ontario Home Builders Association (OHBA) says.

OHBA CEO Joe Vaccaro says in a letter to Peter Balasubramanian, president and chief executive officer of the Tarion Warranty Corp., that the issue is greatest for “pressure treated wood, plywood and framing lumber.”

“There is an overwhelming demand for lumber due to strong continued sales in both Ontario and in the United States,” Vaccaro wrote in the letter sent on Aug. 11. “Demand for large retail stores selling directly to homeowners taking on their own projects has also contributed to this shortage.”

“Renovators are having to turn away projects due to the shortage and increased workloads,” Vaccaro wrote. “An online article from Yahoo Finance stated that according to Stats Canada, renovation-only projects dropped 5 per cent in May compared to January.  Paul Jannke of Forest Economic Advisors also reported that lumber production experienced a 34 per cent reduction in production in April.”

Vaccaro wrote that the industry expects this “lumber and supply issue in Ontario may extend into September and October.”

“For our members and registered Tarion builders, this means that those wit permits issued cannot complete the construction of the home and will need to utilize the delayed closing provisions to manage the delay in construction timelines. This issue affects not only the construction sequencing but the design side as well, as builders are seeking alternatives for unavailable product types that can meet the design and building code requirements on their projects.”

In a note to Greater Ottawa Home Builders Association (GOHBA) members, the local association reports that the Canadian Home Builders’ Association (CHBA) “has reached out to the Wood Council of Canada, the Forest Products Association of Canada, Western Retail Lumber Association, Fenestration Canada, and NAIMA to discuss ongoing price increases and supply chain issues.

“CHBA has also engaged with the Ministers responsible, through discussions and a letter was sent as follow up to the Minister of Small Business, Export Promotion and International Trade, and the Minister of Innovation, Science and Industry to reinforce industry concerns and to seek support for actions that could mitigate the impact of shortages and price increases.”

Builders, who are required to participate in the Tarion Warranty program, can delay projects if they “follow the rules” under Tarion’s “unavoidable delay provisions,” which includes giving home purchasers advance notice of the delay.