Ontario Construction News staff writer
Toronto council has joined with the northern Ontario Town of Powassan calling for a probe into the skyrocketing price of construction materials, which a one councillor called “growing threat to the city’s economy.”
City councillor Paul Ainslie introduced a member’s motion that received preliminary approval from city council at its May 6 meeting.
Chris Murray, the city manger, has been directed to write to the Government of Ontario and the Government of Canada “to address the increasing costs of building materials, particularly lumber, to determine if action is required to ease the costs locally”.
The letter will also be sent to the Municipality of Powassan where a similar motion has passed, and the Ontario General Contractors Association (OGCA).
Similar impacts due to construction material cost spikes are being felt in communities across Canada. In the Sudbury-area municipality of Powassan, council is asking Nipissing-Timiskaming MP Anthony Rota and Nipissing MPP Vic Fedeli to investigate the supply and pricing of lumber to Ontario residents and businesses.
A resolution passed April 20 states that the municipality “is extremely concerned with the extreme price increases of lumber during the COVID-19 pandemic and that the price increases are so high “that many residents and businesses can’t afford to do construction projects.”
The shortage of lumber “is also causing the inability to build affordable housing on budget.”
One local project, a new nursing home currently under construction in Powassan could be impacted with rising costs, making units unaffordable.
“I can just see how the cost of a building that size is going to increase,” said deputy mayor Randy Hall. “When you hear 30 per cent or 40 per cent increase in building materials and you have something that’s costing $100 million, all of a sudden you start seeing $25 million or $30 million increases.”
Hall reached out to the construction industry and “I’m not trying to accuse anybody of anything, but where the price levels appear to be very volatile is the milling and the wholesaling.
“What’s driving the pricing, though, is that the U.S. housing market is going by leaps and bounds so they basically will purchase whatever is available and raise the prices.”
In a letter to Fedeli and Rota, Hall writes “I do understand about exporting and its importance to international commerce, but something needs to be done to balance the scales and bring pricing back into line.
“I just hope that the ministry finds a way to help us out.”
Toronto councillor Paul Ainslie introduced the motion May 5, citing similar concerns.
Exports to the United States may be one reason for the sharp price increase, Ainslie stated in his notice of motion.
“As construction continues in Toronto during the COVID-19 pandemic, and the cost of building materials directly affects the costs to residents and those in the construction industry, I am asking Toronto City Council to echo the concerns raised by the Municipality of Powassan and ask the Province of Ontario and the Federal Government to address this concern,” he concluded.
According to reports by Statistics Canada, the price of lumber increased by 68 per cent between March 2020 to March 2021, while fabricated metal products and construction materials rose by nine per cent.
Despite much higher prices for various materials, Statistics Canada found that overall demand for construction also accelerated, attributable in part to “a desire for more living space during the pandemic” and low interest rates.
Pre-cut 2x4s are currently selling for about $13, compared to $3.39 in early 2020 and sheets of plywood have jumped to about $65 from $21 last year.
Hall said the increases are impacting municipal projects including affordable housing projects.
“I understand that yes, the cost of food has gone up and the cost of gasoline, but I’m looking strictly at the percentage here. I’m not looking for the government to go after specific people but we have to find some way to balance the scales.”
“We can’t afford to have that nursing home built in Trout Creek at today’s prices of building materials. The problem is . . . the increased cost will either have to be reflected back to the taxpayers or to the people who will be living there,” Hall said.
While he agreed that people should not be building a house if they can’t afford the material, he says public projects are different.
“Look at the (impact) on the nursing home. That’s not a luxury. It’s more to do with the cost up front that we are going to have to live with for the next 25 years.”