Monday saw two major housing policy announcements. One, in Etobicoke, saw Prime Minister Mark Carney flanked by Premier Doug Ford and Toronto mayor Olivia Chow — inarguably some of the most important elected officials in the country — pledging to reduce development charges on new homes, with money from the feds and province to make municipalities whole for lost revenue.
It’s a policy commitment we’ve seen the feds and province make several times now, and maybe this time it’ll work. The sums involved are large-ish: $8.8 billion over 10 years for infrastructure projects that would otherwise be paid for by development charges. Municipalities that want to access this pot of money will have to apply, identify the projects they want to get funded, and commit to lowering development charges commensurately. The province will also single out specific municipalities where charges are seen as most troublesome and require them to make large reductions, potentially as much as 50 per cent.
(Municipalities that don’t levy DCs, or not to the extent of the worst offenders, aren’t being forgotten. There’s a pot of money for them, too. By the same token, $8.8 billion is not close to the total 10-year sum for development charges across Ontario municipalities, so this money is simply not going to reach some places.)
It’s a substantial announcement, if one that has taken too long to get to. In some places, it may unfreeze council politics and give the upper hand to voices looking to lower DCs. As a possible example, TVO Today reported on one such council debate in Burlington in February
It also, however, puts a spotlight on the criticism of the government’s announced HST rebate, which is time-limited to the 2026-27 fiscal year: municipalities are being asked to reduce and freeze development charges for three years to provide the industry with stability. But Ontario is only giving up its HST revenue for one year, or at least that’s the current position of the government.
Minister of Municipal Affairs and Housing Rob Flack denied that the province was treating municipalities unfairly, insisting on a longer fiscal commitment from them than the province is willing to provide itself.
“We’re adding $4.4 billion of the $8.8 (billion),” Flack said. “We have to find a better way to fund infrastructure, and I think this is a really good solution.”
Flack’s appearance on Monday afternoon was, in fact, arguably the more substantial housing policy announcement of the day. Flack had just finished introducing Bill 98, the Building Homes and Improving Transportation Infrastructure Act. Bill 98, like many of this government’s previous housing bills, is a grab-bag of various measures for both housing and transit policy. On the housing file the government is continuing to move the ball forward on publicly-owned municipal water service corporations. This was a policy first seriously proposed to the government in 2022, it’s been slow going.
One of the biggest novel changes introduced in Bill 98 is standardizing official plans, the core planning documents that municipalities use to both shape and legally justify their zoning bylaws and other planning rules. While official plans currently have to be approved by the government, municipalities have a lot of freedom in how they’re written, so long as they don’t obviously break either the province’s Planning Act or other provincial policy. The new model, if Bill 98 passes the legislature, will be much more restrictive and allow municipalities only 12 types of land use.
The province is also looking at a root-and-branch reform to the province’s building code, saying that the current document is “overly complex” and doesn’t reflect the needs of 2026. The government will strike a task force to do the rewrite and present recommendations to the government. According to ministry staff, however, there’s currently no deadline for when this will be implemented. It certainly won’t be in time for the current building season, but its impacts could be substantial, making new types of housing more available and affordable.
There are a number of other changes being proposed in and around Bill 98, but one other worth highlighting is a provincially mandated minimum lot size rule. Currently, municipalities can impose limits on how small a parcel of land can be when building a home, with rules that have a long history of mandating sprawl and being used as a tool of exclusion in both Canada and the U.S. The province is proposing to force municipalities to allow lots as small as 175 square metres, or a bit over 1800 square feet. When Houston, Texas legalized those kind of small lots, it set off a boom in townhouses in that city that’s an extensively-cited case study in how cities can make affordable infill family homes. In theory, this could be exactly the kind of policy that could see a lot of new homes get built in urban areas, particularly if changes to the building code allow single-family homes to be built taller without needing second stairwells, something the government has previously proposed. Tall, skinny townhouses on small lots can deliver abundant liveable square feet for families on scarce and expensive urban land.
If, that is, these rules are implemented aggressively and quickly. But that’s exactly the question that has faced this government for years: is the same premier who railed against “four-storey towers” in the suburbs when it was useful cudgel against the Liberals willing to rewrite official plans, the building code, and lot size rules to actually make new kinds of housing possible in the places that don’t want it?
The announcements from Monday contain genuine good news for both immediate relief in the housing market as well as structural changes that might mean a healthier market in the future if the current crisis can be contained. But to get the most out of these announcements will require a government willing to endure some political pain for it, and this specific government hasn’t earned the benefit of the doubt.