OTTAWA -- The value of building permits in Canada plunged 5.3 per cent to $6.3 billion in June, as plans for both residential and non-residential projects declined from the month before, Statistics Canada reported yesterday.

The most significant decrease occurred in Ontario, where the value of building permits -- a key indicator of construction activity -- fell 7.9 per cent to $2.3 billion. Six provinces saw declines in their numbers.

Nationally, the residential sector experienced a 4.4-per-cent drop to $3.6 billion, generated by lower values in multi-family permits in all provinces except Saskatchewan.

In non-residential building, permits fell 6.6 per cent to $2.8 billion due to declines in commercial and industrial intentions, the federal agency said.

The 5.3-per-cent drop was much worse than the one-per-cent monthly drop markets had been expecting, and the biggest monthly change since November of last year, according to TD Securities economics strategist Millan Mulraine.

June's sharp drop places the value of permits 9.1 per cent lower than in the corresponding period last year, Mulraine said.

"On a city-by-city comparison, the report was fairly ugly," Mulraine said, "with Montreal [down 12.1 per cent], Calgary [down 15.2 per cent], Vancouver [down 13.4 per cent] and Saskatoon [down 16.7 per cent] all posting double-digit declines.

"On the whole, it is now becoming clear that the Canadian housing market is continuing to cool, as the level of activity moderates to more sustainable levels. And we expect this correction to continue at a measured and orderly pace," Mulraine said.

Municipalities were hurt by a 13.8-per-cent drop, to $1.3 billion, in multi-family housing in June, the second-consecutive monthly decrease, with most of them occurring in Ontario and Alberta.

Single-family permits edged up 1.8 per cent to $2.3 billion.

The non-residential sector declined after two consecutive months of gains with advances in institutional permits, up 17.4 per cent to $765 million, unable to offset sharp declines in industrial and commercial permits.

Industrial permits fell 31.1 per cent to $389 million after a 70.3-per-cent jump in May. Commercial permits fell 7.7 per cent to $1.6 billion due to lower construction intentions for hotels and recreation buildings.

Saskatchewan was the only western province to post gains, up five per cent to $192 million. Alberta posted a 7.5-per-cent decline to $1.193 billion thanks to a 19.6-per-cent decrease in the residential component, Statistics Canada said.

B.C. was off 6.1 per cent to $1.065 billion. Manitoba was down 11.6 per cent to $121.2 million, while Alberta fell 7.5 per cent to $1.193 billion.

Quebec was up 3.5 per cent to $1.147 billion.

© The Vancouver Province 2008