Q3 2026 Toronto Construction and Electrical Report: Housing Slows as Non-Residential Costs Climb

Key takeaways

• Toronto CMA housing starts were 1,440 in September 2026, down 61% from 3,678 in September 2025. CMHC said Toronto's six-month trend was flat. (CMHC, Sept 2026)
• Ontario building permits rose 9.4% to $5.1 billion in August 2026 (latest available when this report was drafted). (Statistics Canada, Aug 2026)
• Toronto building construction costs rose 0.4% (residential) and 1.0% (non-residential) in Q3 2026 from the previous quarter. (Statistics Canada BCPI, Q3 2026)
• The Bank of Canada raised its policy rate to 2.50% on October 28, 2026, from 2.25%. (Bank of Canada, Oct 28 2026)
• Forecast: IESO's 2026 Annual Planning Outlook projects Ontario electricity demand will grow about 65% from 2026 to 2050 in its reference scenario. (IESO 2026 APO)

Section 1: Construction in Toronto and Ontario

Housing starts. Toronto CMA builders started 1,440 homes in September 2026, compared with 3,678 in September 2025 (−61%). Of the September 2026 total, CMHC reports 236 single-detached and 1,204 multi-unit starts. Month-to-month, starts were 1,540 in July and 1,192 in August (CMHC July 2026, August 2026 and September 2026 releases). CMHC said Toronto's six-month trend was flat in September because single-detached and multi-unit trends offset each other.

Building permits. Ontario permits totalled $5.1 billion in August 2026, up 9.4% from July. Residential permits rose 29.7% to $3.1 billion, and Ontario led the national gain in multi-unit permits (+$696.0 million). Toronto CMA permits totalled $2.4 billion, up 3.8% from July and 28.4% from August 2025 (Statistics Canada, Aug 2026; Table 2; Table 3). September permit data was scheduled for November 12.

Non-residential permits. Ontario non-residential permits were $1.9 billion in August 2026, down 12.7% from July but up 15.5% from August 2025 (Statistics Canada Table 2). Ontario institutional permits fell $211.2 million in the month. Nationally, commercial permits fell $380.0 million to $2.2 billion, industrial permits rose $317.3 million to $1.1 billion and institutional permits rose $32.9 million to $1.8 billion (Statistics Canada, Aug 2026). Statistics Canada did not publish an Ontario split for commercial and industrial permits in this release.

Non-residential investment. Canadian investment in non-residential building construction rose 1.0% to $7.4 billion in August 2026 (latest available). In Ontario, institutional investment rose $35.9 million and commercial investment rose $18.5 million, while industrial investment slipped $3.0 million. Statistics Canada said school and education construction led the institutional gain, driven by major projects in the Toronto and Montréal CMAs. Ontario multi-unit residential investment fell $79.4 million in the month (Statistics Canada, Investment in building construction, Aug 2026). September data is due November 19.

Public infrastructure. Two Toronto transit milestones were reached in Q3. On July 31, 2026, major construction began on Lawrence and McCowan Station, the second of three stations on the 7.8-kilometre Scarborough Subway Extension. The province says the project keeps about 3,000 workers on the job each year (Ontario Newsroom, July 31 2026). On August 17, 2026, Metrolinx reported that tunnelling was complete on the 9.2-kilometre Eglinton Crosstown West Extension, with excavation under way at four underground stations and the elevated guideway (Metrolinx, Aug 17 2026).

Construction costs. In Q3 2026, Toronto's residential building construction price index rose 0.4% from the previous quarter and 0.3% from a year earlier. The non-residential index rose 1.0% from the previous quarter and 3.6% from a year earlier (Statistics Canada BCPI Table 1). Nationally, metal fabrications (+2.4%) and structural steel framing (+2.0%) led residential cost increases. Statistics Canada pointed to tariff-related pressure and supply-chain disruptions (Statistics Canada BCPI, Q3 2026).

Jobs. Ontario construction employment was 583,500 in September 2026, up 10,800 from August and 10,100 from a year earlier (Statistics Canada LFS, Sept 2026).

Interest rates. The Bank of Canada held its policy rate at 2.25% on September 2, 2026 (BoC opening statement, Sept 2 2026; policy rate history). On October 28 it raised the rate to 2.50% (BoC press release, Oct 28 2026).

Construction outlook (forecasts)

• Q4 2026 / 2027 economy (forecast): The Bank of Canada's October 2026 Monetary Policy Report projects real GDP growth of 1.0% in 2026 and 2.0% in 2027. It projects CPI inflation averaging 2.9% in 2026 and 3.1% in 2027 (BoC MPR, Oct 28 2026, Table 2). The next scheduled rate decision is December 9, 2026 (BoC schedule).
• Toronto housing starts, 2026–2028 (forecast): CMHC's baseline forecast is 26,400 starts in 2026, 28,600 in 2027 and 31,200 in 2028. These forecasts use data as of June 23, 2026 (CMHC Summer 2026 HMO update).
• Ontario to 2035 (forecast): BuildForce Canada projects Ontario construction activity will rise through 2035. It expects residential construction employment to be 11% above 2025 levels by 2035, led by new housing and renovation (BuildForce Canada, 2026–2035).

Section 2: Electrical construction in Toronto and Ontario

Transmission. The Etobicoke Greenway transmission line, a 6.5-kilometre, 230-kilovolt line between the Richview and Manby transformer stations, was marked complete on July 28, 2026. The province says it delivers up to 300 MW to western Toronto, southern Mississauga and Oakville, supported 100 jobs during construction and came in $10 million under budget. Hydro One sourced about 98% of the materials from Canadian companies. The province is also advancing the Toronto Third Line, which is planned to deliver up to 900 MW to downtown Toronto (Ontario Newsroom, July 28 2026).

Grid procurement. The first window of IESO's Long-Term 2 (LT2) procurement concluded in 2026. The energy stream produced contracts with 13 projects totalling 1,115.1 MW, and the capacity stream produced contracts with three new battery storage projects totalling 640 MW. IESO calls LT2 the largest electricity system procurement in Ontario's history (IESO, June 18 2026). It published draft documents for the second window on October 9, 2026 (IESO LT2 RFP).

Distribution. Toronto Hydro is in the second year of its 2025–2029 investment plan, approved by the Ontario Energy Board in November 2024. The approved 2025 capital budget was $662.4 million (OEB decision summary; Toronto Hydro).

Apprentices. Ontario had 9,260 active apprentices in the Electrician – Construction and Maintenance (309A) trade, according to the province's apprenticeship dataset updated March 18, 2026 (latest available) (Ontario Data Catalogue).

Demand growth (forecast). IESO's 2026 Annual Planning Outlook forecasts Ontario net annual energy demand will grow from 152 TWh in 2026 to 250 TWh in 2050 in the reference scenario — about 65%, or a 2.1% compound annual growth rate. Drivers include electrification, population growth, data centres and EV adoption. High- and low-demand scenarios reach 297 TWh and 207 TWh by 2050 (IESO 2026 APO; summary).

ESA bulletins and code updates

ESA’s bulletins and Director’s Orders brought updates within the current code cycle. Effective July 6, 2026, a Director’s Order raised the Rule 2-010(1)(e) plan-review threshold from 10 kW to 12 kW for Section 64 installations and bi-directional EV charging equipment; other plan-review triggers remain applicable (Director’s Order). The 2024 Ontario Electrical Safety Code (29th edition) remains in force, effective May 1, 2025 (ESA). October bulletin revisions, issued after Q3, add the following developments:

• Plan review: Bulletin 2-11-29, issued October 2026, incorporates the July threshold change and explains submission requirements for generation, storage and EV charging installations.
• Residential installations: October revisions cover kitchen receptacles, Bulletin 26-23-8, including fixed versus movable islands, and residential battery storage, Bulletin 64-8-4, covering location, capacity, separation and testing provisions.
• Generation and service infrastructure: October revisions address solar PV grounding and bonding, Bulletin 64-2-5, PV installation, Bulletin 64-5-5, power-source interconnection, Bulletin 84-1-20, and delta-to-grounded-wye service conversions, Bulletin 10-22-7. The interconnection guidance calls for advance consultation with the supply authority on disconnect location and compliance with its requirements.
• Pool and hot-tub bonding: Bulletin 68-8-5, issued October 2026, addresses shell, perimeter and water bonding. It also sets a March 1, 2027 acceptance change for manufactured or prefabricated bonding grids: only approved Canadian or U.S.-UL Listed products will be accepted.

Electrical outlook (forecasts and schedules)

• Long-term demand (forecast): IESO's scenarios range from 207 TWh (low) to 297 TWh (high) by 2050 (IESO 2026 APO).
• Procurement: IESO has published draft documents for the second LT2 window (October 9, 2026) (IESO LT2 RFP).
• Toronto transmission: The Toronto Third Line is planned to add up to 900 MW of supply to downtown Toronto (Ontario Newsroom, July 28 2026).
• Bulletins and next code cycle: The bonding-grid acceptance change in Bulletin 68-8-5 is scheduled for March 1, 2027. ESA’s June 11, 2026 advisory-council minutes outline Ontario-amendment consultation in spring 2027 and next-edition enforcement around May 2028; this is a planning timeline, not an enacted effective date.

Electro Group Ltd. is a licensed electrical contractor (ESA licence #7017939) serving Toronto and the GTA. Contact us or call 289-814-7241.

This report is for general information only. It is not financial or investment advice. Figures and forecasts are attributed to the public sources linked above and may be revised by those agencies.