City proposes four-year deferral to spur stalled construction
Toronto city officials are considering a proposal to allow condo developers facing project delays to defer their development charges, though the city stopped short of waiving fees altogether.
In a recent report sent to Mayor Olivia Chow's executive committee, deputy city manager Jag Sharma and chief financial officer Stephen Conforti suggested allowing eligible condo developers to defer development charges for up to four years, interest-free. The proposal specifically targets projects that have stalled due to high interest rates, construction costs, and uncertainty triggered by the ongoing Canada-US tariff dispute.
Eligible projects must set aside at least 5% of their units for affordable housing – either lower-priced rentals or affordable owned units. Developers must also have already submitted complete site plans before March 1, limiting the relief to projects that are currently in the pipeline.
However, the report did not grant the Building Industry and Land Development Association’s (BILD) request to fully exempt stalled condo developments from fees, citing financial constraints. The city estimated a short-term financial impact of approximately $181.1 million from deferred charges, which are typically collected at the issuance of building permits. Toronto also expects to lose about $28.3 million in potential investment earnings due to the deferrals.
Dave Wilkes, president of the Building Industry and Land Development Association (BILD), praised Toronto’s attention to the condo market but urged more extensive measures.
“We applaud that, but we really do believe we need a more comprehensive solution,” Wilkes said, citing Vaughan's recent move to lower its development charges as a positive example.
The Greater Toronto Area (GTA) saw a significant increase in active property listings in February 2025, with 19,536 listings, up 76% from a year ago, according to data from WoWa.ca. The higher inventory is putting downward pressure on prices, signalling a market more favourable to buyers who remain cautious amid trade uncertainty and economic instability.
Wilkes emphasized that the ongoing trade war, combined with high interest rates and elevated construction costs, has created a serious challenge.
“Nothing is getting built,” Wilkes said. “We really have to step up to the plate collectively to address the crisis we're in and ensure we deliver housing for the region in 2027 and beyond. Right now, it’s a very dire situation.”
Toronto previously introduced incentives for rental developments that include affordable units, such as waiving fees and offering property tax reductions. However, the city chose not to adopt BILD's recommendation to completely exempt stalled condo projects from development charges, citing budgetary constraints.
Read more: Toronto condo buyers abandon units worth less than they paid
In the proposal, Sharma and Conforti stated that deferrals could encourage developers to proceed with construction quickly despite trade-related economic uncertainty.
“These actions will support Toronto and Canada’s efforts to ensure a more resilient economy during the response to tariffs and beyond, while supporting local jobs and economic growth,” they wrote.
Toronto’s executive committee will discuss the proposal next Wednesday, with a final decision expected at city council’s session beginning March 26.
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