Building permit totals closed out 2023 on a low note, dropping to their lowest monthly total in more than three years in December.

Statistics Canada reports that permit values reached just $9.2 billion for the month – a drop of 14% compared to the month prior, with both the residential and non-residential sectors losing value.

The total value of residential permits fell 17.9% to $5.7 billion in December, driven by a significant decline in multi-unit construction intentions (-31.1%; -$1.3 billion), the largest-ever  monthly drop in the series. A decline in the value of multi-unit permits in Ontario (-45.2%; -$816.8 million) greatly contributed to the overall monthly decrease in the residential sector in December.

Meanwhile, construction intentions in single-family dwellings edged up 0.8% to $2.9 billion in December. A gain in Alberta (+15.3%; +$84.4 million) more than offset declines in seven provinces. December was the fifth month in a row in which construction intentions single-family dwellings in Alberta increased, and the largest monthly value since January 2014.

The total value of non-residential sector permits decreased 7.0% to $3.6 billion in December. A large declined in institutional permits in Quebec (-55.8%; -$313.9 million) more than offset total gains in the commercial (+4.1%; +$69.1 million) and industrial (+4.7%; +$39.3 million) components across Canada.

Quebec's decline is attributed to the absence of new major institutional permits issued in December, after two projects estimated at over $150 million each were issued in November.

Q4 records weakest quarterly aggregates since Q3 of 2021

The total value of building permits in the fourth quarter of 2023 was $31.3 billion, down 9.0% from the previous quarter, and down 1.7% from the fourth quarter of 2022. The total value of building permits in the fourth quarter of 2023 was the lowest quarterly level reported since the third quarter of 2021 ($30.8 billion).

Both non-residential (-13.3% to $11.6 billion) and residential (-6.3% to $19.7 billion) building permit values decreased from the third quarter to the fourth quarter of 2023.

The single-family dwellings component was the only component to post a quarterly increase (+1.4% to $8.5 billion) in the fourth quarter, building on an increase of 9.8% in the third quarter. Similarly, there was a 2.9% increase in dwelling units authorized for single-family dwellings across Canada in the fourth quarter.

2023 in review

Year over year, total permit values contracted by 3.2% to $132.2 billion in 2023. That figure, however, does not account for rising material and labour costs, both of which inflated nominal building permit valuations. Adjusted for inflation, the total annual value of building permits decreased 8.9% from 2022 to $84.2 billion in 2023.

The residential sector experienced its second consecutive annual decline in building permit values, declining by 15.5% to $48.3 billion in 2023, while the non-residential sector rose for the third consecutive year, up 1.7% to $35.9 billion in 2023.

The institutional (+14.4%; +$1.4 billion) and industrial (+4.1%; +$290.8 million) components experienced series highs in construction intentions, leading to an overall growth increase in the non-residential sector. However, growth in the non-residential sector was tempered by the decline in the commercial component (-6.1%; -$1.1 billion), which accounted for almost half of the value of construction intentions in the non-residential sector.

The gains in the institutional component were mostly attributed to large construction intentions for hospitals and long-term care facilities.

The largest building permit issued in 2023 was for a new hospital in Vaudreuil-Dorion (Quebec), with an estimated construction value of almost $1 billion. Construction intentions for hospital permits that cost over $100.0 million were recorded in Montréal and the Greater Toronto Area, as well as throughout British Columbia, specifically in Dawson Creek, North Cowichan, Williams Lake and the Greater Vancouver Area.

Building permits for long-term care facilities also bolstered growth in the institutional component, with large construction intentions concentrated in Ontario, Quebec and Nova Scotia.