Special to Ontario Construction News
Toronto is set to receive $1.5 billion from the federal and provincial governments, aimed at slashing the municipal development charges that home builders face by 40 to 60 per cent, depending on the type of housing.
With the province’s recent 13 per cent reduction in HST on new homes, this funding will help bring down the overall cost of constructing homes by over $200,000, according to Premier Doug Ford’s statement.
The city anticipates that cutting these charges and utilizing the funds for infrastructure related to housing will pave the way for more than 44,000 new housing units and provide $1.95 billion in relief for builders. The city noted that these reductions in Toronto could save around $83,000 when building a new single or semi-detached home. Developers can either keep these savings or pass them on to buyers as lower home prices.
Thanks to this funding, Mayor Olivia Chow mentioned that Toronto plans to implement reductions in development charges ranging from 40 to 60 per cent between 2026 and 2029.
“People should be able to afford a home in our city,” she stated. “Today’s announcement will make that easier while creating tens of thousands of good jobs in Toronto.”
Richard Lyall, president of the Residential Construction Council of Ontario, pointed out that municipal development charges meant for growth-related infrastructure have surged by over 5,000 per cent in recent decades.
This funding announcement for Toronto was made on June 23 as part of the Development Charge Reduction Program revealed by Ottawa and Queen’s Park back in March. This program aims to provide up to $8.8 billion in joint funding over ten years for infrastructure supporting housing. Municipalities offering a reduction in development charges on all types of residential buildings by at least 30 to 50 per cent for a minimum of three years will be prioritized for this funding.
Chow expressed that these funds will back projects included in Toronto’s ten-year capital plan such as transit and road improvements while allowing the city to launch a new phase of its rental housing initiative and further decrease development fees.
“Through our strong partnership with the provincial and federal government, we’re reducing the cost of building new homes and ensuring the city can keep investing in the infrastructure we need to support communities,” Chow said. “This funding will help create more homes for Torontonians and support growth across our city.”
The reductions in development charges are set to take effect once approved by Toronto’s city council and must stay active for at least three years.
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