Canada

BILD: Lumber shortages will hurt housing supply

A perfect storm of circumstances has disrupted the supply chain 

As any home owner looking to build a deck or a shed will tell you, lumber is in short supply across Canada at the moment. This scarcity has resulted in delays and added costs for residential and commercial construction projects, hampering the addition of much-needed housing supply. To ensure this situation doesn’t compound the housing crisis in the GTA, governments need to prioritize the normalization of supply chains disrupted by the pandemic.

Lumber and wood products are key components in the construction of new homes and other buildings in Canada, used in everything from framing to finishing. Unfortunately, a perfect storm of circumstances has disrupted the supply chain. The pandemic caused reduced operating capacity at mills and manufacturing facilities, as well as transportation and shipping challenges. The softwood lumber dispute with the United States has layered on trade disruptions, resulting in price volatility and uncertainty around supply.

Two additional factors have come into play in this tight market. First, as the building industry exited the work restrictions mandated by the pandemic emergency orders, residential construction went into high gear. According to the Canada Mortgage and Housing Corporation, housing starts across the country were up 15.8 per cent in July compared to June, as industry and municipalities worked through the backlog and delays brought about by the pandemic. This increased demand for lumber.

Additionally, many Canadian homeowners decided to improve their properties during the pandemic. The strong demand for lumber from the do-it-yourself market, as well as from professional renovators working on more substantial renovations, further stretched supplies.

Combined, these challenges have resulted in a dramatic increase in the cost of lumber, as well as shortages and delays. Add to that shortages of imported building products such as air conditioning units and garage doors, and it becomes difficult for builders to deliver finished housing product to market. This situation threatens to exacerbate our region’s housing supply gap and further erode housing affordability.

Governments need to address this growing challenge to the recovery of the construction industry and our economy. They need to work with domestic lumber producers to increase production and further support back-to-work transition for workers. The federal government can help by continuing to strive for avoidance of trade disputes or their timely resolution, and considering other ways to offset material shortages and rising construction costs.

Dave Wilkes is President and CEO of the Building Industry and Land Development Association (BILD), the voice of the home building, land development and professional renovation industry in the GTA. For the latest industry news and new home data, follow BILD on Twitter, @bildgta, or visit www.bildgta.ca.

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