This morning, the provincial and federal governments announced an agreement to partner to lower development charges (DCs) in Ontario by up to 50 per cent and to fund infrastructure investment.
The announcement of the 10-year, $8.8 billion program was made by Premier Doug Ford, Prime Minister Mark Carney, and Toronto Mayor Olivia Chow. It represents a major step forward in lowering the cost of building and addressing project viability across the province, particularly in high-DC areas, such as the Greater Toronto Area (GTA). DCs will be reduced for at least a three-year period.
A copy of the provincial announcement and backgrounder can be accessed here; the federal announcement can be found here.
BILD and OHBA have long advocated for both temporary DC relief and structural changes to materially lower rates and address the negative impacts of high DCs on project viability and housing affordability.
Today’s announcement follows the earmarking of $12.2 billion in the November federal budget to lower DCs, to be matched by provinces.
The forthcoming program will include at least two key conditions:
- The program will provide funding to municipalities (and regions) that apply, provided they lower their DCs for builders and developers.
- Municipalities must agree to update their development charge background studies. This will fast-track implementation of the requirements under Bill 17 and Bill 60 to remove land values from DC calculations. Where municipalities in the GTA have begun this work, BILD has seen preliminary results indicating a 20 to 25 per cent permanent reduction in DC rates.
Municipalities where development charges have already been reduced will be prioritized. More details will be provided as they become available.
