Re: The homebuilding crisis in Ontario

Dear Premier Ford and Minister Flack,

Supply-Build Canada is an association that represents Canada’s building materials industry. We have over 1,300 member firms across Canada, including 145 member firms based in Ontario. Our industry contributes $53.1 billion into Canada’s GDP which ranks third in industry GDP contributors, and supports more than 561,585 jobs, Ontario accounts for $16.7 billion and over 185,000 thousand jobs.i Our industry is a strong advocate, supporter, and contributor to “Buy Canada” and “Buy Ontario” policies as our members manufacture, distribute, buy, and sell Canadian and Ontarian made building materials. These building materials are important to the home-building industry in Ontario.

Supply-Build Canada and the Government of Ontario share a common goal to increase Ontario’s housing supply. We appreciate the Government of Ontario’s ongoing efforts to achieve this goal by reducing the provincial portion of the HST for first-time home buyers on new homes, investing the Municipal Housing Infrastructure Program, and the implementation of the Protect Ontario by building Faster and Smarter Act, 2025.

However, our industry leaders in Ontario have expressed concerns regarding the current cost of development charges and construction fees across Ontario which has made homebuilding unaffordable for developers. For instance, it is estimated that these additional costs can be 20-30% of the total value of a newly constructed single-family home.ii This has priced out families from pre-purchasing homes, therefore deterring developers from building.

Housing starts in Ontario have fallen to the lowest level in a decade, and investment in condo construction has collapsed.iii If these costs remain at the same level or increase layoffs will occur in the home building industry (i.e., trades and building materials jobs), residential units will not be built, municipal revenue from these costs will be reduced which will negatively impact operating budgets; and housing unaffordability will continue to rise. As a result, developers have already reduced their building material orders which has adversely affected the building materials industry nationwide.

By encouraging municipalities in Ontario to lower (not eliminate) these costs the Government of Ontario can rejuvenate the homebuilding industry, and assist municipalities meet their housing target.

We welcome the opportunity to meet with you to discuss further.

Thank you.

Sincerely,

Liz Kovach
President

Supply-Build Canada

Footnotes:

[1] Numbers derived from Statistics Canada, Table: 36-10-0480-01.

[2] Turkstra Lumber, “Tariff & Construction Fees Impact Statement”, 2025.

[3] Robert Hogue, “Special Housing Reports: Canada isn’t in a housing start slump-Ontario is”, RBC, 20 August 2025.

Development Charges (DCs) and Construction Cost in Ontario - 234-2026-174

Good afternoon Liz Kovach,

Thank you for your email regarding high development charges (DCs) and construction fees in Ontario.

The government of Ontario understands that with the changing economic climate, there is a greater need to get shovels in the ground to build more homes for Ontarians. The government is cutting red tape, streamlining approval processes, and reducing costs for developers. This includes changes to standardize and streamline the DC framework while reducing costs for developers. The government recognizes that, while DCs are an important tool that municipalities use to pay for a portion of growth-related infrastructure, as you note, they can also add to the cost of new homes.

Further, through Bill 17 and related regulations, the government made changes to streamline the DC framework while increasing transparency for the public on the municipal collection and use of DCs. These changes include:

• making long-term care homes exempt from municipal DCs on a go-forward basis;
• expanding the DC deferral to non-rental residential buildings, providing for DCs for these developments to be paid in full when an occupancy permit is issued;
• removing municipal authority to charge interest on legislatively-deferred DCs;
• enabling municipalities to reduce their DC rates through a streamlined process;
• refining the DC freeze provision, enabling developments to benefit from the lowest applicable DC rates at the time of payment (i.e., the lesser of the frozen and current rates);
• merging water supply and wastewater services for the purposes of DC credits;
• enabling the use of the Non-Residential Building Construction Price Index (BCPI) for London; and
expanding the annual requirement to spend or allocate 60% of monies in reserve funds to all DC eligible services.

More recently, the province built on Bill 17 through the Fighting Delays, Building Faster Act, 2025 (Bill 60). Bill 60 further amended the DC framework to standardize the rules in the Development Charges Act, 1997, (DCA) and enhance cost predictability for new developments. Changes under the Act and related regulations include:

• creating special rules for land costs in calculating and levying DCs,
• requiring municipalities who levy DCs to have local service policies in place to be able to obtain local services as a condition of land division, and
• requiring municipalities to provide treasurer’s statements and other municipal DC-related documents to the Minister, which would be posted on a provincial DC-landing page.

These changes are in addition to other measures that our government has taken to reduce DCs and improve cost certainty for developments. Key changes include: 

• ensuring that non-profit and affordable residential units are exempt from DCs;
• reducing DCs for rental units with discounts of up to 25% for family-friendly units;
• changing what DCs can be charged for;
• freezing DCs earlier in the development process; and
• deferring DCs for certain types of developments, such as rental housing and institutional developments.

Once again, thank you for bringing your concerns to the government’s attention and for your dedication to getting homes built for Ontarians.

Municipal Finance Policy Branch
Ministry of Municipal Affairs and Housing