A new partnership between Ontario and the federal government has been announced to cut the cost of building new homes and increase the housing supply across Canada.
Prime Minister Mark Carney and Premier Doug Ford were in Etobicoke on Monday morning to announce that development charges (DCs) for new homes will be cut by up to 50 per cent over the next three years.
Carney said reducing development charges by half means approximately $40,000 in savings for homeowners buying new homes.
Prime Minister Carney also confirmed an HST cut of 13 per cent for all new homes, adding that altogether, the cuts to development charges and the HST will total approximately $200,000 in savings for a homeowner.
"It's a partnership that leverages our different capacities, our different jurisdictional responsibilities to achieve the same goals. More homes, lower housing costs, tens of thousands of new careers in the skilled trades," Prime Minister Carney said. "In recent years, they've been growing at an unsustainable rate [development charges], increasing the cost of every new home, compressing margins for builders, and they've been stalling new builds, stalling new construction."
Premier Ford called the joint agreement "historic" and warned municipalities that they won't receive provincial housing funding if they don't cut development charges in half.
"Funding will be prioritized for municipalities that agree to cut DCs by up to 50 per cent, as well as municipalities that have already lowered DCs in recent months. If you don't cut DCs, you aren't getting any money," said Premier Ford.
The new agreement will provide a total of $8.8 billion over ten years to offset much of the financial impact of development charge reductions on municipalities.
Development charges are a major upfront cost that can delay or prevent new housing projects.
