Adil Shamji, the Liberal MPP for Don Valley East, is not the most thunderous speaker in the legislature. Soft-spoken by the standards of any body that includes Doug Ford as a member, Shamji nevertheless finds himself the Liberal critic on the housing file, a portfolio that could use some thunder. Yet if Shamji isn’t delivering fire and brimstone when he speaks on the topic, he at least brings some heat when he lays into the Ford government’s housing policies to date.
“This bill is unambitious and lacking entirely in seriousness. An inconsequential grab-bag of half-measures and reversals,” Shamji said at the legislature on Tuesday morning, referring to Housing Minister Paul Calandra’s underwhelming Bill 185, the Cutting Red Tape to Build More Homes Act. “What we needed was a home run on housing. What we got was a lazy, half-hearted swing and a miss.”
Shamji presented the Liberals’ counter-offer on housing policy — alternatives for the government to consider between now and the next election and, of course, for voters to consider when the next trip to the voting booth actually happens. They include some well-trodden ideas (building affordable housing near transit and prioritizing a “housing first” model for ending homelessness), some more novel ones (support for so-called halal mortgages, something also seen in the recent federal budget), and some straightforwardly necessary ones (investing in a larger labour force to build the housing Ontario needs.)
The final item Shamji presented Tuesday was a “new deal” for cities. This is distinct from the “new deal” that Ford has been offering cities like Toronto and Ottawa, which, in the former case at least, is less a transformation of the provincial capital’s fiscal state and more a limited number of modifications that, however substantial and important, will largely serve to stave off disaster this year. Shamji’s letter to Calandra says that Ontario municipalities need “a modern financial framework that will allow them to have a sustainable source of funding,” in part to offset the need for further increases in development charges in the province’s fast-growing cities.
This isn’t a new idea — and with good reason. Ontario’s cities are fundamentally not set up to benefit financially from the economic activity they generate or the demographic growth they accommodate. Toronto mayor Olivia Chow has lately been using the example of the Taylor Swift Eras Tour coming to the city later this year: while it will generate untold millions in revenue for the province and federal government thanks to sales and income taxes, from the municipal perspective it’s mostly a loss thanks to increased use of city services, particularly police overtime.
Development charges — and, more broadly, the constellation of levies that municipalities impose on new housing — serve a political function as a poor substitute for the sales and income taxes Queen’s Park doesn’t want to share: they let cities generate at least some measure of revenue from growth. But instead of generating that revenue from the broadest possible tax base, they concentrate the costs on a smaller slice of the economic pie (new homebuilding) and drive up its costs. To put it another way: tax policy is housing policy, in this case — giving municipalities an alternative to charges on growth could plausibly increase the construction of badly needed new housing.
To reiterate, this isn’t a new idea. And when you ask Ontario municipalities what they’d prefer as a solution to this problem — whether it’s Chow in 2024 or the Association of Municipalities of Ontario in 2017 — it’s hard to escape the idea of a share of sales-tax revenues. One of the themes I return to with some regularity is that, while governments can be creative, there simply aren’t an infinite number of policy ideas out there to draw on, and some problems really do have a limited set of solutions. Cities need funds that grow predictably with their size and complexity, without the annual dose of political pain from frequent property-tax increases; a share of the HST is one of the few sources of funding that fits the bill, although income taxes could also work.
The point is, any discussion of a “new deal” or a “new financial framework” for Ontario’s cities should be clear about what kind of new money is on offer and where it will come from. Shamji, while not committing the Liberal party to anything specific, didn’t close the door on the idea, saying that the Liberal party is willing to “have those discussions” with municipalities.
Nevertheless, I won’t be holding my breath. Shamji’s leader, Bonnie Crombie, has already ruled out a carbon tax to address one of the other crises facing Ontario: climate change. And I strongly suspect that the Liberals will not, in the 2026 election, commit to either increasing the HST for cities (which would be politically toxic) or giving up a share of the existing HST (which would limit their ability to fund provincial priorities).
So if they form government, we’ll likely end up in a familiar muddle: everyone knows the status quo is broken and everyone knows how to fix it, but nobody wants to incur the political costs. Rinse, repeat — see you in 2030.
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