Special to Ontario Construction News
Toronto will receive $1.5 billion from Ottawa and the provincial government to help it reduce the municipal development charges paid by home builders by 40 to 60 per cent depending on the housing type.
Combined with the province’s 13 per cent cut to the HST on new homes, the funding will lower the cost of building homes by more than $200,000, Premier Doug Ford said in a statement.
Toronto estimates reducing the charges and using the funds for housing-enabling infrastructure will unlock more than 44,000 new housing units and deliver $1.95 billion in relief for homebuilders. The city said DC reductions in Toronto will result in approximately $83,000 in savings on the construction of a new single/semi-detached home. Developers could pocket the savings or pass them on to buyers in the form of reduced home prices.
As a result of the funding, Toronto Mayor Olivia Chow said Toronto will be able to implement development charge reductions of 40 to 60 per cent between 2026 and 2029.
“People should be able to afford a home in our city,” she said, also in a statement. “Today’s announcement will make that easier while creating tens of thousands of good jobs in Toronto.”
Richard Lyall, president of the Residential Construction Council of Ontario, said municipal development charges earmarked to fund growth-related infrastructure have risen by more than 5,000 per cent over the past several decades.
The payment to Toronto, announced on June 23, is part of the Development Charge Reduction Program unveiled by Ottawa and Queen’s Park in March. The program will provide up to $8.8 billion in joint funding over 10 years for housing-enabling infrastructure. Municipalities that reduce development charges on all residential housing types by at least 30 to 50 per cent for at least three years will be prioritized for funding.
Chow said the money will support projects that are part of Toronto’s 10-year capital plan, including transit and roads, and will allow it to open a new phase of its purpose-built rental housing stream and further reduce development charges.
“Through our strong partnership with the provincial and federal government, we’re reducing the cost of building new homes and ensuring the city can keep investing in the infrastructure we need to support communities,” Chow said. “This funding will help create more homes for Torontonians and support growth across our city.”
The development charge reductions will take effect following approval by Toronto city council and must remain in effect for a minimum of three years.
