Conservatives want cities to cut development charges to drop housing costs

Pierre Poilievre unveiled another part of his housing plan, promising to incentivize municipalities to cut taxes and whether he believes recent polls numbers.

MILTON — Pierre Poilievre says a Conservative plan to get municipalities to cut development charges would make it easier to build housing and make those homes cheaper for would-be buyers.

The Conservative leader was west of Toronto on Thursday at a building site in Milton, Ont., where he proposed a plan to reimburse cities for half of every dollar they cut in development charges.

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Development charges, paid by builders ahead of construction, help to fund new infrastructure for housing, like roads and sewers.

Poilievre said these rising costs are adding to the price of homes.

“More money from a new home today built in Canada goes to bureaucrats in office buildings than goes to the carpenters, electricians and plumbers that actually build the homes,” he said.

According to a party backgrounder document, the Conservatives promise to reimburse municipalities 50 per cent of the amount they cut from development fees, up to a maximum of $25,000 per home.

The Conservatives claim that, combined with their plan to lift the GST from purchases of new homes under $1.3 million, the total benefit for homebuyers would be up to $115,000 per home.

Mike Moffatt, executive in residence at the Smart Prosperity Institute, said that reducing development charges and lowering the cost to build likely would help with housing affordability — but only indirectly.

Affordability would improve not because builders are “benevolent” and would pass on the savings from lower development charges, he said, but because an overall growth in housing stock would help to keep price growth in check.

Moffatt said that development charges have “absolutely contributed to affordability challenges” in recent years, particularly in Ontario and British Columbia.

In cities such as Toronto, development charges can be well over $100,000 depending on the form of housing, Moffatt said. Those costs, alongside other fees, are at the point where they’re holding up the pace of new construction because projects are no longer economically viable, he said.

“That’s before you get a shovel in the ground or even buy the land,” he said. “They’re a big, big driver of increasing home prices.”

The Liberal party’s housing platform also includes a plan to cut development charges in half while working with provinces and territories to “keep municipalities whole.”

The NDP, similarly, has pledged to secure a freeze on development charges and work with provinces to cut those fees in half.

The federal government’s existing Housing Accelerator Fund already looks to incentivize cities to lower barriers to home construction in exchange for funding.

Moffatt said he’s not convinced the parties’ proposals to freeze or lower development charges will have their intended effect without a sweeter deal for cities.

Development charges have been the “least controversial” source of revenue for municipalities in recent years, as provincial funding for housing tightened and cities were reluctant to hike property taxes, he said.

Moffatt said the Conservative proposal doesn’t sound like it would offer enough to convince municipalities to take the deal.

“Basically, what the Conservatives are doing is saying, ‘Well, if you lower development charges by $2, we’ll give you $1 back,” he said.

“And I think a lot of municipalities would say, ‘Well, yeah, but I’m still a dollar short.‘”

B Craig Lord in Milton and Anja Karadeglija in Ottawa

This report by The Canadian Press was first published April 10, 2025.