July housing starts fall five per cent as major markets diverge
Canada's residential construction pipeline is softening, and that is translating into a more cautious outlook for window and door demand. Canada Mortgage and Housing Corp. reported a seasonally adjusted annual rate of 229,074 housing starts in July, down from 240,773 in June, a five per cent decline, according to the Ontario Construction Report. The six-month moving average slipped 0.5 per cent to 247,377 units.
Actual urban housing starts in centres with populations of 10,000 or more totalled 18,834 units in July, down 19 per cent from 23,155 in July 2025, the same report said. The national figure masked wide regional differences: Vancouver recorded a 42 per cent year-over-year decline in actual urban housing starts, while Toronto was down 10 per cent. Montreal posted a three per cent increase, driven by higher multi-unit construction, and Ottawa-Gatineau saw starts rise 42 per cent from a year earlier. Calgary also recorded weaker activity, with its monthly annualized pace down 20 per cent.
“July’s results show that housing starts are continuing to moderate and new home construction in Canada is evolving as per CMHC’s recent Housing Market Outlook Summer Update,” Tania Bourassa-Ochoa, CMHC’s deputy chief economist, said in a statement carried by the Ontario Construction Report. CMHC’s 2026 Housing Market Outlook has projected continued softness in housing markets as economic uncertainty weighs on builder confidence and buyer demand.
The CMHC data also showed that the number of units with approved building permits that had not yet started construction rose three per cent to 141,480 nationally. At the same time, housing completions increased 8.1 per cent from June to 19,773 units in July, suggesting that projects already underway continued to move toward completion even as fewer new projects broke ground.
Building permit data: June rebound masks a softer second quarter
Statistics Canada data published by Fenestration Review shows a more mixed permit picture. In June, the total value of building permits issued in Canada rebounded by $2.3 billion, or 18.5 per cent, to reach $14.9 billion, more than offsetting monthly declines in April and May. The June gain was led by the non-residential sector, which rose $1.8 billion, while residential permits increased a smaller $479.7 million. Within residential, the multi-unit component rose $283.7 million to $5.3 billion, with Quebec contributing the largest increase of $201.3 million.
For the full second quarter of 2026, however, the residential sector weakened. Total building permits rose 3.7 per cent to $40.4 billion, but the residential sector fell $944.2 million, or 4.3 per cent, to $21.1 billion, Fenestration Review reported, citing Statistics Canada. The multi-unit component accounted for most of the decline, down $873.7 million to $13.8 billion. Ontario led the losses in multi-unit permits, down $582.4 million, followed by British Columbia at $386.2 million; Alberta partially offset the decline with a $180.1 million gain. Nationwide, 80,000 single-family and multi-family units were authorized for construction in the second quarter, down from 82,200 units during the same period one year earlier.
What the slowdown means for Canadian window and door fabricators
The combined data points to a thinner near-term pipeline for Canada's residential window and door fabricators. Fewer housing starts mean fewer building envelopes to be closed, and the decline in multi-unit permits—particularly in Ontario and British Columbia—is significant because multi-unit residential projects commonly require large volumes of glazing, curtain wall and punched window systems.
In Canada, residential windows and doors are specified to CSA A440, the North American Fenestration Standard, so order volumes track construction activity closely. When permits fall and starts slow, the result is a smaller project pipeline, and window and door orders tend to follow. The second-quarter permit decline of 4.3 per cent in the residential sector, and the 19 per cent year-over-year drop in actual urban starts in July, suggest that window and door plants serving the residential market may need to plan for softer demand through late 2026 and into 2027.
One near-term offset is that housing completions increased 8.1 per cent from June to 19,773 units in July, according to CMHC, meaning projects already under construction still require windows and doors for current schedules. However, that does not replace the demand lost from a slower start pipeline. The growing backlog of units with approved permits but not yet started—up three per cent to 141,480—could become a source of future orders if builders regain confidence, but for now it signals that projects are not moving from permit to groundbreaking as quickly as expected.
Uneven markets, uneven demand
The July data highlights a widening split between major markets, and that split will show up differently in regional order books. Ottawa-Gatineau's 42 per cent year-over-year increase in urban starts and Montreal's three per cent gain, driven by higher multi-unit construction, suggest pockets of continued demand for fenestration products in eastern markets. Conversely, Vancouver's 42 per cent decline and Toronto's 10 per cent drop point to softer conditions in two of Canada's largest high-rise residential markets, where multi-unit window and curtain wall volumes are substantial.
Calgary's 20 per cent monthly annualized decline adds another caution signal for fabricators serving Alberta. Meanwhile, the permit data shows Alberta was a bright spot in the second quarter, with a $180.1 million increase in multi-unit permits that moderated the national decline. For window and door suppliers, this means regional sales strategies may need to adapt more quickly than in a typical broad slowdown.
What to watch next
The next releases from CMHC and Statistics Canada will show whether July's five per cent decline in housing starts is a one-month blip or the start of a longer slide. CMHC's 2026 Housing Market Outlook has already projected continued softness in housing markets as economic uncertainty weighs on builder confidence and buyer demand, according to the Ontario Construction Report. For window and door manufacturers, the key indicators will be the multi-unit permit trend in Ontario and British Columbia, the pace of completions, and whether the approved-but-unstarted backlog begins to convert into active construction.
For now, the data is clear: fewer units are being authorized and started than a year earlier, and that will eventually flow through to fenestration demand. Fabricators that serve a mix of regions and project types may be better positioned than those concentrated in the softening high-rise markets of Toronto and Vancouver.