Toronto is set to reduce its development charges by 40 to 60 percent over the next three years, a move that could increase the number of financially viable housing projects by roughly 10 percent. The city had some of the highest development charges in Ontario, with fees exceeding $137,000 for a single-detached home. This reduction is part of the Canada, Ontario Partnership to Build program, which aims to support infrastructure needs while encouraging new construction.
Ontario municipalities have been accumulating development charge revenues at a rapid pace, with reserves reaching around $10.5 billion by the end of 2024. This has led to concerns that the fees are becoming a barrier to building new homes, rather than a necessary tool for funding growth-related infrastructure. The Desjardins report suggests that development charges have risen by around 500 percent over the past two decades, outpacing other cost drivers such as construction wages and general inflation.
For Calgary buyers, sellers, and investors, this development charge reduction in Toronto could have implications for the local market. As cities across Canada grapple with the challenge of funding growth while encouraging new construction, Calgary may consider similar approaches to supporting its own housing market. By reducing development charges, cities can make housing projects more financially viable, potentially leading to an increase in new construction and more options for buyers.
Sources: STOREYS