In April, building permits in Canada decreased by 6.6% compared to the previous month, contrasting with a forecasted increase of 2.0%. The prior month’s figures were also revised to a decline of 5.3% from an earlier estimate of 4.1%.

The total value of Canadian building permits in April was $11.7 billion, marking a decrease of $829.6 million. British Columbia saw the most considerable decrease with a $1.2 billion reduction, whereas Ontario experienced a rise of $299.3 million. On a constant dollar basis for 2023, there was a month-over-month decrease of 6.6% and a year-over-year decrease of 16.4%.

Residential construction permits fell to $7.4 billion, declining by $967.7 million. The multi-family segment decreased by $882.5 million, mainly due to British Columbia, which dropped by $837.4 million. Vancouver CMA contributed significantly to this decline with a loss of $1.0 billion. The single-family component decreased by $85.2 million, with Alberta experiencing the largest drop of $37.4 million, partly offset by Quebec’s $26.6 million increase.

There were 21,400 multi-family dwellings and 4,200 single-family dwellings authorised. Overall, the total units authorised were 25,600, a 6.5% decrease from March.

What we’ve got here is a marked pullback in building activity across the country, especially within the residential sector. Month-on-month, both headline and core figures have come in weaker than expected, with not just a sharper decline than forecast for April, but also a steeper revision of March’s numbers. That suggests a prevailing weakness rather than a one-off swing.

British Columbia led the downturn in total permit values, with a notable $1.2 billion drop contributing significantly to the national slump. This fall was driven in large part by the multi-family housing sector, where Vancouver’s decline alone accounted for a billion-dollar hit. In a contrast to that heavy pullback, Ontario showed some resilience, seeing an uptick of close to $300 million, but it wasn’t nearly enough to offset the losses elsewhere.

On a price-adjusted basis, the picture becomes even more pronounced, with a monthly contraction of 6.6% and a sharper 16.4% drop year-on-year. Those figures strip away inflation, giving a clearer view of the actual decline in real terms. When you see double-digit annual declines like that, especially without any stabilising trend from month to month, it tends to highlight caution in underlying demand and sentiment.

The decline in multi-family authorisations – both in terms of dollar value and units approved – emphasises hesitancy from developers. When fewer projects make it to the approval stage, it’s often not due to a sudden drop in interest, but rather due to financing constraints, labour shortage concerns, and uncertainties in underlying demand. There were 25,600 housing units authorised in the month, down 6.5% from March, with nearly 84% being multi-family. That proportion signals where developers had initially been leaning – towards higher-density residential builds – only for that trend to now cool.

Alberta’s decline in the single-family segment followed similar themes, though with less magnitude. The offset provided by Quebec’s modest gain shows how this isn’t a blanket situation across provinces, but it’s moving in that direction.

So what can we take away from this? The data underlines an environment where construction planning has turned conservative. The misalignment between expectations and actuals shows that participants had perhaps thought the worst of the softness was behind us. That’s now in question.

It’s this divergence that might open up dislocations or volatility in contracts sensitive to housing or building sectors. While some had built in assumptions of a bounce, especially post-winter, the actual trajectory doesn’t support that optimism at the moment.

The safe approach right now is to monitor which provinces show resilience and whether that persists long enough to provide a base. We are looking more closely at provinces with stable month-over-month values alongside modest permitting approvals, as that kind of consistency can catch mispriced instruments offside.

Where multi-family numbers lead the downturn, especially with major cities like Vancouver weighing heavily, there’s a clear signal too – the appetite for larger developments isn’t there right now. That could mean timelines get pushed out or financing windows tighten further. Either way, near-term participation should be especially mindful of regional disparities, rather than national averages, because the latter are masking too much.

We’ve seen this pattern before: the numbers shout decline, while headline expectations remain too upbeat. For those whose exposure hinges on construction input levels or housing-linked credit performance, there’s little in the April prints that suggests rebound pressure is building. So, the smarter focus now is tracking volume reversals from provinces that had sharp falls. Sometimes, when the floor gives, it takes longer than expected to rebuild the base.

Pay attention, specifically, when the same regions start seeing repeated soft prints — they tend to tell us more than a single month can. From our side, caution is warranted around instruments that bake in imminent recovery, especially when forward-looking indicators are neutral at best.

We’ll be tightening up short-term biases and watching for false starts. There’s opportunity, but only where expectations have gotten ahead of the real trends.