ONTARIO LOCAL PERMITS UPDATE – EAST / NORTH / SW CMAs
In order to keep our stakeholders as informed as possible about activity and trends in Ontario’s ICI construction industry, the OCS will be providing more local-level research and analysis in our Eye on ICI Newsletter. We’re beginning in this issue with building permit analysis and construction market profiles for Census Metropolitan Areas (CMAs) in Eastern, Northern, and Southwestern Ontario. The CMAs covered in this issue are: Greater Sudbury, Kingston, London, Ottawa, Peterborough, Thunder Bay, and Windsor.
In the August Newsletter we’ll be providing an Ontario Regional Permit Update for the second quarter of 2016. We’ll do another Local Permit Update in the September Newsletter where we’ll focus on CMAs in Central Ontario: Barrie, Brantford, Guelph, Hamilton, Kitchener-Cambridge-Waterloo, Oshawa, St. Catharines-Niagara, and Toronto.
Industrial and institutional permitting in Greater Sudbury fell heavily in the January-May period. Total ICI permitting is up slightly though based on the relative strength of Greater Sudbury’s commercial sector. Commercial permitting more than doubled compared to the first five months of 2015. Greater Sudbury’s ICI industry is heavily reliant on the commercial sector with commercial permits accounting for 80% of total ICI permit value between January and May. This is higher percentage than in any other metropolitan area in Ontario. Industrial permitting at 4% was the lowest proportion in all of Ontario. There are several power generation and mineral projects in the planning stages that could help support the growth of Greater Sudbury’s industrial sector in the future.
The commercial and institutional sectors each accounted for almost half of Kingston’s ICI permitting between January and May. Industrial permits made up the remaining 6%. Kingston’s industrial sector has been almost unchanged at this level for the past three years. Institutional permitting increased the most compared to the first five months of 2015. New school construction has been a key driver of Kingston’s institutional sector. The two most valuable building permits issued in the past 12 months were for new elementary schools. A new secondary school valued at $30 million is also in the planning stages and could potentially begin construction before the end of 2016. In the commercial sector there are several large projects in the planning stages, including a Wal-Mart-anchored shopping centre.
ICI permitting in London between January and May increased by over half compared to last year, and reached its highest level since 2011. These gains were driven primarily by the institutional sector which saw its permitting double compared to the first five months of 2015. Commercial permitting in London between January and May was strong as well. It was up by 40% compared to the first five months of last year. Industrial permitting fell by almost half. It now only makes up 6% of the London’s ICI industry.
Institutional permits accounted for 61% of London’s ICI permitting between January and May. This is a higher percentage of institutional permits than any other metropolitan area in Ontario. The institutional sector’s dominance comes from new educational facilities. The two largest ICI permits issued between January and May were for new buildings at Fanshawe College and the University of Western Ontario. The University of Western Ontario is also planning a new building for their engineering school. New elementary and high school construction will be driving London’s institutional sector as well. London is one of the biggest beneficiaries of a recent commitment by the Ontario government to build new primary and secondary schools. They allocated funds for three new schools in London.
Commercial permitting dominated Ottawa’s ICI industry between January and May, making up almost two-thirds of total permit value. The industrial and institutional sectors had equal shares of the remaining value. Office buildings accounted for more than half of the commercial permits. Retail and mixed-use construction each accounted for slightly less than a quarter. Ottawa’s commercial sector looks set to continue its dominance of the ICI industry, with dozens of high-value office, retail, and mixed-use projects in the planning stages.
Although industrial permitting appears low relative to the commercial sector, the impact of the Confederation Line project on Ottawa’s ICI industry should not be underestimated. Industrial permitting is up a thousand percent compared to the first five months of 2015. Much of the commercial permitting between January and May was due to the construction of Confederation Line stations attached to retail and office complexes. City of Ottawa building permit records show that ICI permitting on Confederation Line stations amounted to $159.6 million between January and May 2016.
ICI permitting between January and May in Peterborough fell to it’s lowest level since Statistics Canada started reporting Peterborough-specific data in 2006. Industrial permitting had the most significant fall, down 75% and totalling just over a million dollars. Commercial permitting has remained steady and risen slightly compared to last year. This has not been enough to make up for the relative weakness in Peterborough’s industrial and institutional sectors. There are a variety of projects in the planning stages in Peterborough but none are expected to proceed imminently.
ICI permitting in Thunder Bay between January and May fell to its lowest level since 1999. It has also fallen by more than half compared to the first five months of 2015. Thunder Bay’s ICI industry is heavily reliant on commercial projects, which made up three-quarters of total ICI permit. Industrial and institutional permitting appears to have made significant gains compared to last year, but this should be taken with caution. The total value of industrial and institutional permits only reached $1.1 and $1.5 million respectively. There are several major projects in the planning stages in Thunder Bay, but most have been put on hold pending financing or an improvement in market conditions.
ICI permitting in Windsor between January and May fell in all three sectors compared to the same period in 2015. The most significant drop came in the commercial sector which fell by more than half. Despite these drops in permitting, there has been ongoing work through 2016 on major industrial and institutional projects. Construction on a $195 million solar project began in January, and work on a $248 million wind farm is expected to begin later this year. Institutional work is continuing on University of Windsor downtown redevelopment. The City of Windsor awarded their new city hall project in May with work beginning this Summer.
School construction looks set to be a key driver of institutional construction in Windsor. The highest-value permit issued by the City of Windsor between January and May was $4.8 million for an addition to a secondary school. There are also seven school projects in the planning stages which combined are valued at $60 million. The City of Windsor has several projects in the planning stages that could support institutional and industrial construction, including three library projects, and four water sewage treatment plant projects. The Gordie Howe Bridge continues to experience delays. Work is not expected to begin until at least 2017.
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FOR MORE INFORMATION, CONTACT:
Katherine Jacobs
Director of Research,
kjacobs@iciconstruction.com
or
Fred Lehmann
Communications Coordinator,
fredl@iciconstruction.com
Ontario Construction Secretariat (OCS)
180 Attwell Drive, Suite 360, Toronto, ON M9W 6A9
P 416.620.5210 ext. 222
F 416.620.5310