B.C. Budget Reveals Troubling Housing Start Decline and Speculation Tax Rise
The British Columbia government's recently released budget has unveiled a worrying trend in housing construction, with housing starts declining significantly in 2025 compared to previous years. This downturn contradicts earlier government predictions and raises concerns about the province's economic growth and housing affordability.
Government Forecasts Criticized as Overly Optimistic
According to the budget documents, housing starts in British Columbia totaled 44,193 units in 2025, representing a 3.6 percent decline from the previous year. This figure stands in stark contrast to the government's 2024 budget prediction of 46,500 housing starts for 2025, which anticipated a 1.6 percent year-over-year increase.
Chris Gardner, president of the Independent Contractors and Businesses Association, has been particularly vocal in his criticism of the government's housing start projections. "We think that's far too high," Gardner stated regarding the government's estimates. His organization predicts housing starts will be closer to 34,000 units this year, with potentially even lower numbers in 2027.
Construction Industry Faces Significant Job Losses
The slowdown in housing construction has had severe consequences for the province's construction workforce. Gardner reports that contractors are laying off skilled workers at unprecedented rates, with welders, plumbers, drywallers, electricians, and carpenters losing their jobs by the thousands.
"Because of the significant slowdown, contractors are laying people off and these are highly skilled people being laid off in the thousands because the housing market has slowed so significantly," Gardner explained. "So none of that's going to bode well for the outlook for 2026."
Mixed Results Across Municipalities
While the overall provincial picture shows decline, some municipalities experienced growth in housing starts during 2025. Abbotsford recorded a remarkable 79.6 percent increase in housing starts, while Victoria saw a 16.1 percent increase compared to 2024.
Despite the overall decline, housing starts remained above the 10-year historical average of 43,187 units, though they came very close to this benchmark. The Housing Ministry predicts marginal increases to 44,210 housing starts this year and 45,920 in 2027, though these forecasts remain below recent records achieved in 2023 and 2021.
Affordable Housing Targets Declining
The budget reveals another concerning trend in affordable housing development. The ministry's targets for affordable housing units—including affordable rental units, social housing, and co-ops—are projected to decline significantly over the coming years.
The prediction for this year is 4,500 affordable housing units, dropping to 4,000 next year. By 2028-29, only 2,500 affordable housing units are targeted for completion, representing a substantial reduction in the province's commitment to affordable housing solutions.
Economic Concerns Beyond Housing
Gardner expressed broader concerns about the budget's impact on British Columbia's economy as a whole. "There was nothing meaningful in B.C.'s budget as a whole to grow the province's economy," he stated, calling the situation particularly concerning given Canada's need to respond to new tariffs from Washington D.C. and shifting global trading patterns.
The budget's implications extend beyond housing construction, affecting the province's ability to respond to economic challenges and maintain its competitive position in changing global markets.
