Canada’s housing shortage is worsened by unnecessary paperwork: CFIB

Municipal governments can help address the shortage of housing in Canada by simplifying their permitting processes, said the Canadian Federation of Independent Business (CFIB) in its new report entitled Flushing out the nonsense.

The report was released Monday as part of CFIB’s 15th annual Red Tape Awareness Week.

Duncan Robertson

“Canada’s housing shortage has come to the point where buying a home in Canada is getting out of reach for most Canadians. This also makes it more challenging for small employers who struggle to attract employees in many cities across the country, as those employees cannot find affordable housing. Municipalities across Canada can do more to help address it,” said Duncan Robertson, senior policy analyst at CFIB and co-author of the report. “Making municipal permitting processes simpler and less costly is one important step in addressing Canada’s housing challenges.

“Addressing Canada’s housing challenge is a big job, but there’s one simple, low-cost solution all levels of governments could capitalize on, and that’s reducing red tape.”

The CFIB said its report analyzed what type of permits and costs are required for a $20,000 project to convert a simple powder room into a full bathroom in 12 major cities across Canada.

Out of 12 municipalities examined, Vancouver had the highest permitting costs and, along with Toronto, had the highest document requirements. They are also the cities with the highest home prices and greatest shortages. On average, seven additional documents are needed for a bathroom renovation project, with combined permitting costs ranging from $180 in Charlottetown to $2,029 in Vancouver, said the CFIB

Francesca Basta

“If there are this many obstacles for a simple bathroom renovation, imagine how costly and time-consuming it is to permit a secondary suite, a complete renovation or a new build. Permitting costs and processes should be straightforward and affordable,” said Francesca Basta, CFIB’s research analyst and co-author of the report.

Over half of small business owners in the construction sector find it difficult to obtain or renew permits and/or licenses. A strong majority of businesses (80%) also agree that governments of all levels should make it a high priority to review the necessity of all business permits and licenses, said the report.

To cut unnecessary red tape, CFIB recommends municipalities:

• Review their existing permitting and approval processes.
• Establish publicly available service standards for permit processing.
• Simplify and even automate certain processes.

Provincial and federal governments should also do their part to address red tape in the housing market by:

• Tying future funding for housing and infrastructure to requirements for a low administrative burden.
• Ensuring reporting requirements are set provincially where permit processing service standards are provincial too.
• Championing best practices.

For more information on Red Tape Awareness Week, visit cfib.ca/redtape.

Mario Toneguzzi

Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list