Listen Anywhere
If you’ve been watching your pipeline thin out over the last year or two and wondering whether it’s just you, it’s not. The slowdown in Ontario construction is real, it has specific causes, and most of the people living through it haven’t had anyone explain it clearly. That’s what this episode was about.
We had Daniel Foch on the podcast. He runs Canada’s most-followed real estate investing podcast and serves as Chief Real Estate Officer at Valerie.ca, Canada’s first AI real estate brokerage. He spends his days deep in housing data, and he has a way of explaining what’s happening without either selling you something or panicking you into doing something dumb.
Here’s what came out of the conversation.
How the Condo Market Collapsed
The 90% drop in Ontario condo starts didn’t come out of nowhere. It built over years.
Around 2017, foreign buyer taxes in Vancouver pushed speculative capital into Toronto. When Ontario followed with its own non-resident speculation tax, investors didn’t stop speculating on real estate — they just shifted into pre-construction condo contracts they could flip before taking possession. That drove a surge of pre-sale activity with a lot of money behind it that had nothing to do with people actually wanting to live in those units.
Then COVID hit. Lowest interest rates anyone had seen, a generation of millennials entering the market for the first time, and people suddenly moving around the province in ways they never had. Builders ramped up fast. High-rise projects got contemplated across the GTA. Everyone looked like a genius.
Then in 2022, interest rates tripled. The sales window closed almost immediately. At the same time, the federal government started insuring mortgages for purpose-built rental developers, and a chunk of the apartment supply pipeline shifted from condo to rental. The problem is that rental project economics don’t really work in Toronto and Vancouver at current land values. So the rental supply shift is mostly happening in Alberta, Halifax, and the prairies. In Ontario, everything basically stopped.
That’s why excavation and demolition companies started laying off in 2023. If no foundations are being poured and no cranes are going up, the rest of the project stack has nothing to follow.
What’s Still Getting Built (and What Isn’t)
There are roughly 30,000 to 40,000 built condo units sitting unsold across Ontario right now. Builders are in a difficult spot with these. Selling at market value either loses them money or undercuts every other unit in the building, which isn’t a viable path. Until recently, renting them out triggered HST closing costs that made the numbers unattractive. The removal of GST/HST on those units has made holding and renting more workable, but it doesn’t solve the land values problem for new projects.
One shift worth paying attention to: more than half of new residential supply being created in Toronto right now is coming from multiplex projects (three to five units). The missing middle that planners ignored for decades — the four-plexes, small walk-ups, and mid-density infill — is starting to fill some of the gap. It’s not the same volume as high-rise, but it represents work of a different kind, more distributed and better suited to smaller contractors.
For the high-rise slab trades, it’s a split picture. Guys on existing multi-year projects are still working, some of them deliberately slower because they know what comes after. Guys whose projects got cancelled are either looking for work here, moving around the country, or pivoting to different project types.
When Does It Turn
Daniel’s honest answer is end of 2025, early 2026 for the bottom. The closest historical comparison is the 1990s, when Toronto peaked in 1989, bottomed around 1995-96, and didn’t return to the previous peak (inflation-adjusted) until about 2012. We’re currently in year four of this cycle.
The specific pressure point he flagged is mortgage renewals. Canada renews mortgages every five years, and 2025 is when the largest wave of people are renewing into significantly higher rates than they locked in. The pain that was supposed to hit everyone at once has been stretched out across years. Once we’re through the bulk of those renewals, probably end of this year into early next, the market has a clearer path to stabilizing.
That said, don’t mistake bottom for recovery. The 1990s had a long flat period at the bottom, sometimes over a year, before anything meaningful started moving again. The pipeline for new construction work will take time to rebuild after that. Projects get approved, then designed, then bid, then started. A market bottom in 2026 doesn’t mean a full construction pipeline in 2027.
What to watch for: mortgage delinquencies peaking and starting to pull back, land transactions shifting away from receivership toward conventional sales, and pre-sale activity picking up in markets where rental economics actually work. Those are the early signals.
Why Contractors Are Going to Alberta
Several contractors in Ontario have already made the call to either relocate or pursue projects in Alberta. Daniel laid out three reasons the migration is happening.
The first is pure affordability and economics. Calgary offers a significantly better house-price-to-income ratio, lower cost of living, and wages that stretch further. For a trades business owner who can work anywhere, that math is hard to argue with.
The second is that rental project economics actually work in Alberta at current land values. The demand is there, the government backstop through CMHC is there, and the numbers pencil out in a way they don’t in the GTA. That’s where the construction activity is going.
The third is political climate — Alberta leans in a direction that a lot of people fed up with Ontario and federal policy find more comfortable. Whether or not that factors into a specific contractor’s decision, it’s part of what’s driving the broader migration of people and capital westward.
The more pointed question is whether this is durable or a short-term bump. Daniel’s read is that the fundamentals driving Alberta’s growth are structural, not cyclical. It’s not just people chasing a hot market. They’re chasing a more functional city.
What Trades Businesses Should Do Right Now
The sharpest part of the conversation was on AI, and Daniel wasn’t talking about it as a technology trend. He was talking about it as a competitive gap that’s already opening.
His point: anything that can be done on a computer can now be done by AI. For trades businesses, the most valuable work happens in the field, not at a desk. Every hour a contractor or office admin spends on invoicing, quotes, scheduling, or chasing down information is an hour that could be spent differently. These tasks can be automated, or at minimum significantly accelerated, with tools that cost a few hundred dollars a month.
The window is real and it won’t stay open forever. Large companies can’t move fast here. They have compliance reviews, IT procurement cycles, and enterprise inertia. A two-person electrical company can open Claude tomorrow and start building workflows this week. That agility is a genuine advantage, but only if it gets used.
The starting point he recommended: record a Loom of every repetitive task in your business. Get it documented. Then start handing those workflows to AI one by one. The businesses that do this now will be faster, cheaper to operate, and harder to compete with in 12 months.