Ontario, feds spending $8.8 billion to cut development charges
· Toronto Sun
Ontario and the federal government have announced new measures to cut the cost of housing and make home ownership more accessible.
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On Monday at a construction site in Etobicoke, Prime Minister Mark Carney, Ontario Premier Doug Ford and Toronto Mayor Olivia Chow revealed an $8.8-billion plan that will halve development charges on new construction over the next three years.
“Across the country, we’re moving fast, we’re starting to get results,” Carney said, referring to his government’s ongoing initiatives to ease Canada’s affordable housing crisis.
Ford praised the collaboration as a means to make life easier for Ontario’s workers.
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“Working together with the prime minister, we’ve reached a historic partnership agreement between Ontario and Canada to get shovels in the ground on housing, make homes more affordable, and build new and improved public transit,” he said.
“This agreement includes $8.8 billion to build housing-enabling infrastructure, and lowering municipal development charges that add hundreds of thousands of dollars to the cost of a new home.”
Both the province and Ottawa will contribute $4.4 billion.
What does it take to get the funding?
Funding priority, Ford said, will be given to municipalities that agree to cut development charges by 50%, or those that have cut them in the past few months.
“To all of my great 444 mayors and people in the municipalities, if you don’t cut DCs (development charges), you aren’t getting any money,” Ford said.
“But if you do, we will be there to support you.”
The $8.8 billion announced will also help fund major local transit projects, including improvement to GO Transit and a new Waterfront East LRT linking Union Station with the eastern Portlands.
Development charges grew out of control
Once a small fee in new home builds, development charges in Ontario — especially in the Greater Toronto Area — have evolved to become significant portions of the cost of a new home.
Since 2011, development charges in Toronto have ballooned more than 855% for detached single-family homes, increasing on average from $14,000 to nearly $138,000 last year.
Development charges are charged by the municipality to homebuilders in order to pay for things like basic utilities, roads, and related infrastructure.
Skyrocketing development charges are blamed as a driving factor in making Ontario’s homes unaffordable.
Housing large part of Ontario budget
Monday’s announcement comes less than a week after the province — again in collaboration with the federal government — expanded eligibility for an HST break on new homes from first-time homebuyers to everyone, as well as using funding from Ottawa to cover the entire 13% of the HST — not just the province’s cut.
That announcement came one day before the province released its 2026 budget.
Mississauga Mayor Carolyn Parrish noted her city has cut development charges by 50%, eliminating them entirely on family-sized units in rental properties.
Among those praising the move was the Consumer Choice Center, which said cutting development charges will help ease the housing crunch.
“Today’s announcement by Prime Minister Mark Carney and Premier Doug Ford means that municipalities will have the funding they need to cut development charges, which will help to make housing more affordable and spur more activity in the housing sector,” said the centre’s Jay Goldberg.
“This is a major step in the right direction in housing policy.”