GTA Construction News staff writer
The Residential Construction Council of Ontario (RESCON) is praising a landmark federal-provincial agreement aimed at cutting development charges (DCs) and speeding up home construction, calling it a “critical” step toward more affordable housing.
“RESCON commends Prime Minister Mark Carney and Premier Doug Ford for working together on these vital initiatives as they will boost the residential construction sector and make new homes more affordable,” said RESCON president Richard Lyall.
The federal and Ontario governments announced Monday that each will invest $4.4 billion over the next 10 years in housing-related infrastructure. In addition, development charges levied by municipalities—which can add up to $200,000 to the cost of a home—will be cut in half for three years. The move is designed to reduce the tax burden on new homeowners and stimulate stalled projects.
A report prepared for RESCON shows that taxes, fees, and levies now account for 36 per cent of the purchase price of a new home. In the Greater Toronto Area, DCs alone can add over $150,000 to the cost of a typical family home. Over the past 25 years, DCs in Toronto have risen more than 5,000 per cent, far outpacing inflation.
“Development charges have been on a trajectory that is unsustainable and economically counterproductive,” Lyall said. “They significantly hike the price of a new home. Middle-income families are increasingly priced out of home ownership. The measures taken today by the province and the feds will help move the needle.”
The new federal-provincial deal also includes support for major transit and rail projects, including the Waterfront East Transit line in Toronto, expansion of GO Transit service through freight-owned corridors in the Greater Golden Horseshoe, and planning for the Alto high-speed rail initiative connecting Toronto and Quebec City. Priority projects in the Greater Toronto and Hamilton Area, such as the Ontario Line, Eglinton Crosstown West Extension, Scarborough Subway Extension, Yonge North Subway Extension, and Hamilton LRT, will also receive federal contribution agreements.
Alongside the funding announcement, Ontario introduced the Building Homes and Improving Transportation Infrastructure Act, legislation designed to reduce bureaucratic red tape and streamline approvals for residential construction, including faster site plan approvals.
“As Housing Minister Rob Flack noted, delays add to the cost of housing. Simplifying planning and approval tools will help get the shovels for much-needed housing in the ground quicker,” Lyall said.
He added that recent measures—including the federal and provincial DC reductions and last week’s removal of HST on newly built homes—could substantially lower costs for consumers and lift the industry at a critical time.
The Ford government had originally set a goal of building 1.5 million new homes by 2031 but has since softened that target. The new measures aim to give municipalities, builders, and governments the tools to accelerate construction and improve housing affordability for first-time buyers and young families.
“Homebuilding has stalled and the outlook for the industry is grim,” Lyall said. “The measures announced today by the two governments are a positive development for buyers and the industry. Addressing the housing crisis requires all levels of government to work toward the common goal of making new homes more affordable and speeding up construction.
