Thank you very much for the invitation to join you today.
I want to relate the economic harm of excess permit costs to Canadian homebuyers and small businesses today.
First, let's look at permit costs to people looking to get into the housing market. Restrictions on housing supply and extra costs hinder the efficiency of the housing market. Recent C.D. Howe Institute research has found a persistent gap between the cost of building new homes and their market price in major Canadian cities. This is a regulatory and permit tax on housing. A well-functioning housing market results in the market price of housing being pretty close to the cost of just building it. If prices persistently exceed this construction cost, it's often due to the barriers that inhibit new construction. These barriers often stem from excessive regulations and permit requirements. This regulatory tax is huge in some places.
We estimate that homebuyers in Vancouver see an extra cost of $644,000 for the average new home because of supply limits. Across Canada's largest and most restrictive cities—this is mostly in B.C. and Ontario—homebuyers paid hundreds of thousands of dollars more than the construction cost of a newly built house because of limits on supply. It's an extra $112,000 for homebuyers in Ottawa. In Calgary, it's an extra $152,000, and it's an extra $168,000 in the greater Toronto area.
Vancouver's cost of housing restrictions are, by far, the largest in Canada, resulting in a 50% extra cost—