Homebuilders push officials to lower development charges and speed up permits
Ontario homebuilders are calling on all levels of government to take immediate steps to reduce costs and speed up the processes involved in home construction.
The Residential Construction Council of Ontario (RESCON) is urging federal, provincial, and municipal authorities to lower taxes, fees, levies, and development charges, which they say are making it increasingly difficult to build affordable homes.
At a recent meeting with Ontario Municipal Affairs and Housing Minister Paul Calandra, RESCON president Richard Lyall emphasized the critical challenges facing the homebuilding industry, particularly the rising costs that are putting homeownership out of reach for many, especially first-time buyers.
“We appreciate the actions that Minister Calandra and the provincial government have taken to date to encourage more homebuilding, which includes eliminating the HST on new purpose-built rentals,” Lyall said in a statement. “However we continue to face a perfect storm of high taxes, endless bureaucracy, particularly at the municipal level of government.”
Lyall pointed out that the approval process for new housing developments remains “slow and dysfunctional… killing the housing market, especially for first-time buyers.”
“We have a devastating housing affordability and supply crisis yet are still in the dark ages across many municipalities when it comes to residential development approvals. We can and must do better,” he added.
During the meeting, RESCON officials highlighted the financial strain on the homebuilding sector, noting that new home sales are sluggish, and construction starts for 2025 are looking bleak. The high taxes and fees, along with bureaucratic delays, are making it increasingly difficult to build homes at prices that many Ontarians can afford.
One example RESCON presented was the contrast in development charges between municipalities. In Vaughan, development charges on a new home are $192,000, while in Calgary, they are just $22,000.
“Federal taxes are too high, and municipal development charges are like a runaway train,” said Lyall. “Costs to consumers for new housing are too high and most first-time buyers and renters can’t afford the cost.”
A recent report from the Canadian Centre for Economic Analysis found that 31% of the cost of a new home in the Greater Toronto Area is due to taxes, fees, and levies, with the federal government responsible for the largest portion. In Toronto alone, development charges on single-family homes have skyrocketed by nearly 2,000% over the past two decades.
The situation is urgent, according to RESCON, with the construction of new homes failing to keep up with Ontario’s growing population. On top of financial barriers, regulatory issues such as municipalities implementing green building standards beyond what the Ontario Building Code prescribes are further complicating the situation.
Read next: Is affordability back within reach for first-time buyers?
Lyall also criticized municipalities for using development charges as a “cash cow” to fund infrastructure projects, noting that a large portion of these levies are sitting in reserve funds rather than being spent.
“While municipalities rely on the levies, a big chunk is not being spent. Instead, it is going into reserve funds,” he noted. “The levies must be reduced to a more manageable level so the savings can be passed on to homebuyers.
“Immediate action is needed to lower taxes and fees, speed up the approvals process and create conditions conducive to building homes.”
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