BUILDING DURHAM

Toronto - The Ontario Construction Consortium (OCC) is calling on the provincial government to suspend work on construction sites across Ontario for 14 days to protect the safety of workers and employers amid the COVID-19 crisis.

OCC executive director Phil Gillies reacted to Premier Doug Ford's directive yesterday calling for non-essential business and services to shut down, saying the message to the construction industry was confusing and contradictory.

"It makes no sense that you can't have your neighbour over for a cup of coffee yet construction sites are expected to continue operations and they can have hundreds of employees working in close proximity to each other," said Gillies.  "This is contrary to the best advice of public health officials to maintain social distancing."

The provincial government yesterday ordered all non-essential businesses to close but published a list of 74 businesses deemed essential, including several construction related business activities including:

26. Construction projects and services associated with the healthcare sector, including new facilities, expansions, renovations and conversion of spaces that could be repurposed for health care space;

27.  Construction projects and services required to ensure safe and reliable operations of critical provincial infrastructure, including transit, transportation, energy and justice sectors beyond the day-to-day maintenance;

28.  Construction and work services, including demolition services, in the industrial, commercial, institutional and residential sectors;

29.  Construction work and services that supports health and safety environmental rehabilitation projects.

Gilles said the OCC supports positions taken by both the Carpenters' and Painters' unions in calling on the government to shut down construction temporarily.

"As Premier Ford announced [Monday], the construction workers on this Province should not be expected to work on jobsites where the basic safety requirements for COVID-19 are not being met," said Tony Iannuzzi, executive secretary treasurer of the Carpenters' Union.  "Those minimum standards simply do not exist on most of our jobsite."

Bruno Mandic, business manager and secretary treasurer of the Painters and Allied Trades District Council 46, echoed those sentiments, saying "it's impossible to do our jobs [and maintain social distancing].  If you're on the 20th or 50th floor of a building working, the only way to get there is by elevator and there's no social distancing.

He also cited unsanitary conditions on construction job sites including a lack of running water. 

Enbridge has released documents outlining their service updates during COVID-19.

View or download new build update

View or download Q & A for Builders

View or download Enbridge Team Contact Info 

 

The Ontario Home Builders' Association has created a letter template that serves as a guide which outlines high-level principles and recommendations.  Members are encouraged to personalize with local context and share with both OHBA and the Ministry (john.ballantine@ontario.ca) outlining potential financial impacts of the proposed CBC model in jurisdictions right across Ontario.

Download the form letter 

OHBA has put together a template that members can use to input information regarding their projects.  You can use the template to see the effect that the Community Benefit Charge will have your business.  If you do complete the template and are willing to share, please email the completed form to s.hawkins@drhba.com.  To submit, the following information needs to be filled out:

• Name of upper and lower tier municipality
• Market value of a building lot per front foot
• Average lot size in a project
• Current upper tier municipality DC information.  In the next column, click whether the New System DC is maintained, increased to account of removal or 10% statutory amount or Now funded through CBC.  The amounts will automatically populate the column.  If there is no upper tier, then leave blank.
• Enter the same information as in step 3 for lower tier or single tier municipality.

View or download a sample completed form

View or download the template

View or download Development Charges in Durham Region 

OHBA is co-hosting a series of regional conference calls on Monday, March 23 to review the proposed regulatory framework, discuss concerns and potential advocacy positions, and to have focused regionally-specific discussions.

Durham Region will be participating in the Central-North discussion hosted by Simcoe County HBA on Monday, March 23 at 2:30 p.m.

• Please RSVP to Sandy Tuckey - office@simcoehomebuilders.com
• Conference Call #: 1-866-281-9197 or 416-913-1112
• Participant Code: 96153993

View or download the slide deck

We are now finishing our third week of renovations at the new office. We can officially say that the demo is done, the electrical is complete and the drywall has been finished. Taping is up next for the office! A big thank you to everyone who has helped us thus far, FarSight Homes (demo/framing and project management), Langmaid Electric (electrical), MV Drywall (drywall), and Accubuilt Construction (project management). We would also like to thank Cambria for donating countertops for both the kitchen and bathroom and Rocpal Custom Cabinets for donating cabinets for the kitchen. If you are interested in donating to the new office please contact Stacey Hawkins - s.hawkins@drhba.com 905-579-8080 ext. 2.

  

 

 

With the minor tweak to the Mortgage Stress Test (B-20) last month, and the Bank of Canada rate cut by 50 basis points last week, many potential homebuyers may see it as the signal to finally take the leap into homeownership. 

Although, on the surface, this should be welcomed news for the residential homebuilding industry, there are many economists and financial experts whom are worried that the end result may be an overheating of an already expensive housing market, and further overextension of consumer debt levels and the risk they pose on the financial system. 

But, in an article I read in the Financial Post, by Steve Ambler and Jeremy Kronick, both authors suggest that perhaps traditional barometers for determining Canadians’ financial fragility may be out of touch.  Furthermore, Ambler and Kronick suggest that regulators and policymakers should focus less on traditional credit measures and more on debt-service ratios.

Over the past 25 years, Canadians’ household debt has increased steadily as a share of their disposable income.  During this time, and especially since the financial crisis, they have often been told their debt levels were unsustainable and that a day of reckoning was fast approaching.  And yet that day has not come.  According to Ambler and Kronick, “one reason why seems clear: for the most part over the last 25 years, the amount Canadians spend servicing their debt has not changed as a percentage of their disposable income.”

In a recent C.D. Howe Commentary, both authors argue that it is primarily this “debt service ratio” (interest payments plus reimbursement of principal divided by disposable income) that determines households’ ability to make their payments at the end of the month.  “If this ratio spikes, that should be a red flag regarding financial instability.  But for most of the past 25 years, other than the lead-up to the 2008 financial crisis and a smaller uptick now, it hasn’t, unlike more traditional and – we argue – less important credit measures,” state Ambler and Kroncik. 

For instance, one of the most widely reported debt figures is the ratio of total household debt (mainly mortgages, car loans, and student and credit card debt) to disposable income.  It sat at a whopping 176 per cent at the end of the third quarter of last year, compared to a little over 85 per cent at the beginning of the 1990s.

“But what people owe is only one side of the coin.  The other side is what they own and Canadians’ net worth has never been higher.  Heading into the final quarter of last year it was equivalent to 870 per cent of disposable income, almost five times their debt ratio,” point out Steve Ambler and Jeremy Kronick.

Neither of these two results is all that surprising.  You would expect to see a higher debt ratio in an environment where interest rates have declined.  “The 10-year Canadian government bond yield was 9.75 per cent in January 1990, 6.49 per cent in January 2000, 3.48 per cent in January 2010, and just 1.60 per cent in December 2019,” states Steve Ambler.  “Declining interest rates have been a worldwide phenomenon, explained by falling birthrates, aging populations and a slowdown in real growth,” argues Jeremy Kronick.

As interest rates have fallen, cheaper borrowing has led to higher asset prices, most notably for houses.  Higher house prices have in turn led to people taking on bigger mortgages.  But the interest they pay on their mortgage has fallen as interest rates have fallen.  As a result, and not surprisingly, the debt service ratio has remained mostly flat in Canada over the past quarter century, even as the debt ratio has risen.  Households typically borrow when they are young and pay back their debt over time.  Lower interest rates will – perfectly rationally – lead them to spend more on housing and also to substitute present consumption for future consumption, which means borrowing more.  “The optimal debt ratio will rise as interest rates fall and fall as interest rates rise (if interest rates ever do rise again),” argue Ambler and Kronick. 

That the debt service ratio has been so flat for so long suggests Canadian households have been carrying as much debt as they think they can handle, given both their incomes and the low interest rates we have had since 2008. 

Both Ambler and Kronick suggest, “regulators and policy-makers should put less weight on traditional credit measures when determining whether policy measures to slow the housing market are necessary.  They should instead focus more on debt-service ratios and other indicators related to debt servicing.”  Both authors state, “central banks need to realize that if they cut their policy rate to stimulate the economy, the short-run positive effects of increased borrowing on both output and inflation have a downside in the long run as more borrowing eventually leads to higher debt servicing.  In suggesting less emphasis on debt ratios and more on debt servicing ratios, we by no means want to imply all is well.”  The debt service ratio is on the rise today.  The only other time it rose in any sustained way over the past 25 years was just before the crash of 2008.  Combined with increases in consumer insolvencies, which were up 9.5 per cent over the 12 months ending in December, the uptick in debt service ratio should focus on the minds of policy-makers.  “But, at some point there has to be an explanation for why we haven’t yet seen a U.S.-style housing market correction.  The debt service ratio provides one important clue,” suggest both Ambler and Kronick.

Steve Ambler is David Dodge Chair in Monetary Policy, C.D. Howe Institute, and Professor of Economics at the University of Quebec in Montreal.  Jeremy Kronick is Associate Director, Research, C.D. Howe Institute. 

To ensure prompt payment of membership dues, the board of directors has approved a new membership payment policy that will be enacted for this summer's renewal process.

Going forward, membership renewal invoices will be sent out in July with payment due on September 1st, so that companies have plenty of time to process and pay the invoice.  Payments can also now be made online.

 If payment has not been received by September 15, a friendly reminder will be sent out to all outstanding accounts.  If payment has still not been received, on October 15 a final warning will sent to all outstanding accounts, and followed up with a phone call. 

If payment is not received by October 31, membership will be terminated.

 In addition, cancellations will be listed on the Association's newsletter or in a news bulletin.

 If you have any questions, please contact Stacey at s.hawkins@drhba.com.

Last month, the Durham Region Home Builders' Association re-launched their website with a brand new look. The new site has been designed to be easy to navigate and find the things you are looking for. 

There's always something going on at the Association, and now it's easy to see what events and seminars are coming up.  If something catches your eye, you can now easily register and pay right from the website.

DRHBA is growing, and we are making it easier for new members to join by putting our membership application online.  Potential members can now fill out the online application form and submit payment simply by clicking "Become A Member."

With a couple of clicks, you can view an up-to-date member directory, learn about the Association's board members, find out who is on committees, and see what DRHBA is doing out in the community.

Visit www.drhba.com to see all of the changes!  If you spot a typo, let us know by emailing Katelyn at k.widdop@drhba.com.

On Friday March 6^th the Masonry Worx hosted there Second Annual Curling Tournament at the Brampton Curling Club. Multiple members of the DRHBA were in attendance, including our current President Johnathan Schickedanz and Past President Emidio DiPalo. The day included breakfast, a how to curl session, lunch, multiple games of curling, dinner and prizes. It was a great day full of skips, slides, rocks, and sweeping!