If you run a small contracting or trades business in Ontario, the headlines this month probably felt contradictory. Housing starts in Toronto cratered in September, yet Statistics Canada says construction output has now risen four months in a row. Both are true. The work isn't disappearing so much as moving.
Here's what the newest CMHC and StatCan numbers actually show, which parts of the market are shrinking, and what that means for subcontractors, renovators and owner-operators, including the many immigrant-run firms in the trades.
Key Takeaways
- Ontario's six-month housing-starts trend fell 2% to 58,120 in September 2026, as apartments and townhomes fell 3% and single-detached starts rose 5% (CMHC, Oct. 16, 2026).
- Toronto's September starts were down 61% year over year, but CMHC's Toronto trend was flat, so one month isn't a verdict.
- Ontario's institutional building investment rose $151.0M in July, which StatCan ties to new hospital construction.
- Since January 1, 2026, Ontario's Construction Act requires annual holdback payments, which can help subcontractor cash flow.
What Do September's Housing Starts Say About Ontario?
In September 2026, CMHC reported that Ontario's six-month housing-starts trend slipped from 59,145 to 58,120, a 2% decline (Canada Mortgage and Housing Corporation, Housing starts and construction data, September 2026, released October 16, 2026). The split matters more than the total. Single-detached starts climbed 5% in the trend, while all other types, mostly apartments and townhomes, fell 3%.
Toronto looks worse on a single-month basis. CMHC counted 1,440 Toronto starts in September 2026 against 3,678 in September 2025, a 61% drop. Single-detached starts fell from 361 to 236, and all other types fell from 3,317 to 1,204 (CMHC, same release). Those are large numbers, and they follow a 45% year-over-year drop in August.
Still, CMHC itself warns that analyzing monthly figures alone "can be misleading," because multi-unit starts swing widely from one month to the next. Its own Toronto six-month trend was flat. So the honest reading is this: two bad months in a row is a warning sign, but the 61% figure is not a forecast of what next quarter's workload looks like.
Where Is Ontario's Construction Work Moving?
In July 2026, Statistics Canada reported that construction output rose 1.3%, its fourth straight monthly gain, with every subsector expanding (Statistics Canada, Gross domestic product by industry, July 2026, September 29, 2026). Non-residential building construction rose 2.9%, the biggest jump for that subsector since January 2022, and StatCan tied it to "the construction of a new hospital in Ontario."
The investment data tells the same story in dollars. In July, building construction investment rose $270.9 million (1.2%) to $23.6 billion nationally, and institutional investment rose 7.4% to $2.3 billion. Ontario contributed $151.0 million of that institutional gain, again attributed to hospital construction. Meanwhile Ontario's multi-unit investment fell $43.9 million, part of a $221.2 million national decline (Statistics Canada, Investment in building construction, July 2026, September 21, 2026).
Notice what the chart says about Ontario housing. Single-family investment rose $93.5 million, more than twice the $43.9 million multi-unit decline. So "Ontario construction is shrinking" is the wrong summary. The pain is concentrated in apartments and condos, the segment that drives most of the volume for framers, drywallers, electricians and other subs who work on large residential towers.
Who Is Most Exposed, and Where Do Immigrant Tradespeople Fit?
IRCC's analysis of the 2021 Census shows immigrants make up 18% of workers in industrial, commercial and utility construction, 23% of residential building contractors and builders, and 26% of building finishing contractors (Immigration, Refugees and Citizenship Canada, Growing Canada's future: residential construction). Those shares are national, they count workers rather than business owners, and they're now five years old.
Even with those limits, the pattern is useful. Finishing trades, roofing and residential building lean on immigrant workers and owner-operators more than most sectors. Those are also the trades most tied to housing volume. If multi-unit starts keep falling, the subs closest to that pipeline feel it first, while firms with institutional or renovation work have somewhere to turn.
What Changed in Ontario's Construction Act in 2026?
Amendments under Bill 216 and Bill 60 took effect on January 1, 2026, according to law firm Osler's summary (Osler, Ontario Construction Act amendments now in effect, March 2, 2026). Annual holdback payments are now mandatory after each contract anniversary, and the older route that let a payer refuse holdback payment in certain cases (section 27.1) was repealed.
Two timing rules matter for a small sub's cash flow. An invoice is deemed proper unless the owner gives written notice of a deficiency within seven days of receiving it. And a contractor has 14 days after receiving holdback to pay its subcontractors their share. Parties also now have 90 days after completion or termination to give notice of adjudication. Osler is a law firm, not the statute, so check the Act on ontario.ca before you change how you invoice. This isn't legal advice.
What Should a Small Ontario Contractor Do Now?
You can't control housing starts. You can control how exposed your order book is to one segment and how quickly you get paid. Is your backlog tied to a single builder or a single project type? That's the first question to answer this month.
Split Your Backlog by Segment
List current and quoted jobs under multi-unit housing, single-detached homes, renovations and institutional or commercial work. If more than half sits in one segment, that's your concentration risk.
Check What Institutional Work Would Require
Large public-sector projects usually come with prequalification, insurance and safety-program requirements. Find out what general contractors on hospital and campus jobs ask for before you need to bid.
Update Invoicing for the New Payment Rules
Send complete, properly formatted invoices so the seven-day deficiency window works for you, and diarize each contract anniversary to follow up on holdback.
Stress-Test Your Cash Flow
Model a 10 to 20% slower quarter for your biggest customer. Know your payroll, equipment and insurance costs and how many weeks you can cover without new work.
Watch the Next Two Releases
StatCan publishes August building investment on October 21, and CMHC publishes its next housing-starts data next month. Two more soft readings would make the trend harder to dismiss.
If you're also dealing with higher input costs, our guide to U.S. tariff relief options for Ontario small businesses covers the programs that may apply, and our piece on condo vs. pre-construction in Ontario shows how weak presale demand feeds into the starts numbers above.
Frequently Asked Questions: Ontario Construction in 2026
Are Ontario housing starts falling in 2026?
CMHC's six-month trend for Ontario eased from 59,145 in August to 58,120 in September 2026, a 2% drop. Single-detached starts rose 5% in the trend while all other types, mostly apartments and townhomes, fell 3%. The decline is concentrated in multi-unit housing, not in all housing.
Did Toronto housing starts really fall 61%?
Only for one month. CMHC counted 1,440 Toronto starts in September 2026 against 3,678 in September 2025, a 61% drop. But CMHC says single months can mislead, and its Toronto six-month trend was flat. Treat the 61% as a warning sign, not a forecast.
What is driving Ontario's institutional construction growth?
Statistics Canada attributes July 2026's $151.0 million rise in Ontario institutional building investment to new hospital construction. Nationally, institutional investment rose 7.4% to $2.3 billion. StatCan names a specific hospital build, so the growth may be uneven from month to month rather than a steady trend.
What changed in Ontario's Construction Act in 2026?
Amendments under Bills 216 and 60 took effect January 1, 2026. According to law firm Osler, annual holdback payments became mandatory, an invoice is deemed proper unless the owner flags a deficiency within seven days, and contractors have 14 days to pass holdback to subcontractors. Check the Act itself before relying on these details.
How many construction workers in Canada are immigrants?
IRCC's 2021 Census figures show immigrants make up 18% of workers in industrial, commercial and utility construction, 23% of residential building contractors and builders, and 26% of building finishing contractors. These are national shares of workers, not owners, and they date from 2021.
Ontario construction isn't collapsing, and it isn't booming. Apartment and condo starts are weak, single-detached building is holding up, and hospital projects are adding institutional work. For a small contractor, the practical move is to know which segment your revenue depends on and to keep your invoicing and cash buffer in good shape. Figures here come from CMHC and Statistics Canada releases as of October 16, 2026, and later releases may revise them. This article is general information, not legal, tax or financial advice.
