AUGUST 2016 – BUILDING PERMITS UPDATE
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The GTA experienced declines in all three ICI sectors in Q2. This was the first time in five years that all three sectors declined in the GTA in quarterly year-over-year permit values. Collectively the decline in permit values between Q2 2015 and Q2 2016 amounts to $1.17 billion.
Industrial permit values in the GTA fell to their lowest Q2 level since the recession in 2009. Despite this drop in permitting there are major transit projects ongoing in the GTA including the Eglinton Crosstown LRT. There are other transit projects still to come in the GTA as well, the most immediate being the billion-dollar Finch LRT which is scheduled for bidding this Fall. Major transit infrastructure will be a key driver of the GTA’s industrial sector for the coming years. Another sector that could be a key driver is water/wastewater. In August a $200 million contract was awarded for the Humber Wastewater Treatment Plant, and municipalities in the GTA are planning to spend billions on water/wastewater upgrades in the coming years.
Commercial permit values declined the least of the ICI sectors, but the 37% fall is still significant. There are obviously a multitude of commercial projects ongoing and in planning stages at any time in the GTA so it’s difficult to assess whether the commercial sector is experiencing a decline or a blip. It should be noted that if the past 4 quarters combined are compared over the past 36 months, commercial permit values decline at a rate of 15% per year.
Permit values in the GTA’s institutional sector fell by an astonishing 58%. This can be explained to some extend by the fact that in Q2 2015 the City of Toronto issued a $765 million permit for the new Humber River Regional Hospital. This permit produced a record high in the GTA’s institutional sector and the GTA’s ICI industry as a whole in Q2 2015. New institutional projects are coming up that will contribute to filling the void. A $210 million RFQ for the Michael Garron Hospital in East York closed in August. Bidding for a $95 million municipal government facility in York Region also closed in August. A $71 million Seneca College campus expansion project was awarded in August as well.
The GTA Region includes: City of Toronto, City of Oakville, Durham Region, Peel Region, and York Region
FOR MORE INFORMATION, CONTACT:
Ontario Construction Secretariat (OCS)
180 Attwell Drive, Suite 360, Toronto, ON M9W 6A9
P 416.620.5210 ext. 241