City of Toronto calls for action against the surging price of construction material

The City of Toronto is taking a stand against the skyrocketing price of construction materials, which a local councillor describes as a growing threat to the city’s economy.

The concerns are included in a member’s motion that received preliminary approval from city council during its Thursday meeting.

The motion calls for Toronto’s city manager to ask the provincial and federal governments “to address the increasing costs of building materials, particularly lumber, to determine if action is required to ease the costs locally.”

Coun. Paul Ainslie tabled the motion, with support from Coun. Michael Thompson.

Prices for construction materials have made breathtaking gains during the pandemic. According to reports by Statistics Canada, the price of lumber increased by 68 per cent between March 2020 to March 2021, while fabricated metal products and construction materials rose by nine per cent.

Contractor Peter Lux says some customers are holding off on smaller renovation projects as a result of high material prices. (Oliver Walters/CBC)

Despite much higher prices for various materials, Statistics Canada found that overall demand for construction also accelerated, attributable in part to “a desire for more living space during the pandemic” and low interest rates.

The unusual combination of dizzying prices and frantic demand have some worried that an eventual breaking point may be near, which could result in an untenable rise in housing costs or the devastation of the local construction industry.

Prices for 2’x4’s, plywood through the roof

Peter Lux, the owner of the Toronto contracting company Homes by Lux, said prices have surged faster and reached higher levels than at any point during his 16-year career as a business owner.

“It’s very common over the years that things go up five per cent, 10 per cent …  but when we’re going up 300, 400 per cent, it is shocking,” he said.

Lux said certain products are even outpacing estimates by Statistics Canada, such as pre-cut 2’x4’s which are currently selling for about $13 each compared to $3.39 in early 2020. He said sheets of plywood have also made a similar leap, from about $21 last year to $65.

He said the price of materials is now causing some customers to hold off on certain projects, though he noted that his overall business has not slowed during the pandemic.

“For larger projects people tend to not care so much but I see it in some of the smaller projects,” Lux said.

Ontario’s decision to deem residential construction an essential activity, even during the most recent province-wide emergency declaration and stay-at-home order, has most likely contributed to the rise in prices as well.

Construction demand ‘did not dip as deeply as expected’

In an email to CBC Toronto, Ontario’s Ministry of Natural Resources and Forestry offered an explanation for the rising cost of lumber, but it did not say any policy changes were being considered to slow the growth.

The ministry said the price increase was caused in part by the shutdown of some Ontario mills during the spring of 2020, which was not followed by an commensurate decrease in demand for lumber.

“As it turned out, housing construction markets did not dip as deeply as expected and there was an unexpected increase in demand from do-it-yourself home renovation projects,” said the ministry in a statement.

The province also said production slowdown in British Columbia is contributing to ongoing supply issues.

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