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B.C., Alberta lead building boom

Blog by Ian Watt | January 7th, 2007

B.C., Alberta lead building boom
But rest of Canada seeing slower economic growth
Derrick Penner and Eric Beauchesne


B.C. builders took out a record $11.5 billion worth of permits in 2006, which, along with xml:namespace prefix =" st1" ns =" "urn:schemas-microsoft-com:office:smarttags"" />Alberta's $13.9 billion, helped propel Canada to its 11th consecutive year of rising construction values.xml:namespace prefix =" o" ns =" "urn:schemas-microsoft-com:office:office"" />

Statistics Canada, in its preliminary year-end building-permits report released Tuesday, said Canadians took out a record $66.2 billion in building permits, which was nine per cent ahead of the $60.8-billion mark reached in 2005.

However, Statistics Canada said that if B.C. and Alberta were excluded, "the overall picture would have been less robust," with the nation's construction sector only showing one per cent growth from 2005.

The Statistics Canada report adds to evidence that, nationally speaking, the economy is slowing and the building boom has passed its peak. However, building plans remained at relatively high levels, it noted.

And while residential building hit a record $41 billion in 2006 -- the first time homebuilding topped $40 billion -- that was based on pricier products since the number of permits shrank for the second consecutive year.

In B.C., the picture is different. While Canada Mortgage and Housing Corp. reported Monday that slower-than-expected economic growth will slow housing starts, the non-residential building boom is expected to go on.

"That's to be expected ... and nothing to be too concerned about given that we've had three or four years of a pretty torrid [residential construction] pace," Keith Sashaw, CEO of the Vancouver Regional Construction Association said.

And it gives the non-residential contractors a bit of "breathing room [on] the skilled labour issues," allowing carpenters, electricians and other tradespeople to switch gears from residential to institutional, industrial and commercial construction.

B.C. saw non-residential permits shoot up 22 per cent to $3.9 billion last year compared to 2005. Sashaw said that with demand for commercial an industrial buildings still rising, that trend won't change soon.

"I expect this [pace] to continue through 2007 and well into 2008 if not later," Sashaw said. "Once you get a couple of years out, the crystal ball gets really hazy, but some of the figures are encouraging."

In the Lower Mainland, the value of non-residential building-permits climbed almost 37 per cent to $2.7 billion in 2006. Even if construction-cost increases of about 12 per cent are stripped out, it's still a healthy gain, he said.

All municipalities in Atlantic Canada and western Canada, as well as Sherbrooke, Que., Kingston, Ont. and London, Ont., set record highs in 2006. Except for Quebec City, all those showing a decline were in Ontario, with Toronto and Ottawa posting the largest retreats.

New housing prices toward year-end were up more than 11 per cent from a year earlier, led by a near 50 per cent jump in Calgary and 42.8 per cent surge in Edmonton.

"Factors contributing to the strong housing market included a dynamic economy in western Canada, the strong level of employment, the growth in disposable income, the tight apartment vacancy rates in several centres and advantageous mortgage rates," Statistics Canada said.

However, in December the value of residential permits fell for the third time in four months, while non-residential permits joined in the slide following four straight monthly increases.

Still, the total value of permits issued in December was 3.9 per cent higher than the average monthly level in 2006.


Hot building sectors in B.C. and Alberta lifted Canada to its 11th consecutive year of growth in construction values in 2006, Statistics Canada's preliminary report on building permit activity shows.

Canada $66.2 billion +9%

B.C. $11.5 billion +13 %

Residential $7.6 billion +9%

Non-residential $3.9 billion +22%