The City of Toronto will be getting $1.5 billion from the federal and provincial governments in order to lower development charges on new homes over the next three years, leaders from all three levels of government said Tuesday.
The deal means Toronto will lower development charges by 40 to 60 per cent from 2026 through 2029.
“Our government is doing everything we can to lower costs for families, keep workers on the job and get shovels in the ground faster on new homes,” Premier Doug Ford said in a statement.
“Combined with our historic 13 per cent cut to the HST on new homes, today’s agreement will lower the cost of building new homes by more than $200,000 in Toronto, getting more shovels in the ground and creating thousands of good-paying construction jobs in the process.”
In a news release, the province said the deal will shave approximately $83,000 off the construction of a new single/semi-detached home in Toronto. It said the city estimates the deal could help get 44,000 new homes built in the city.
Development charges are usually levied on developers by municipalities to pay for the cost of infrastructure associated with development, such as new roads and sewers. Cities have come to rely on the revenue, but developers have pointed to the charges as being a major factor driving up the cost of new housing.
The province has long called on municipalities to slash development charges, but they have been reluctant to do so without revenue to replace the money.
The funding announced Tuesday, which will flow in over 10 years, will come through the Development Charge Reduction Program, a fund Prime Minister Mark Carney and Premier Doug Ford announced back in March.
“People should be able to afford a home in our city. Today’s announcement will make that easier while creating tens of thousands of good jobs in Toronto,” Toronto Mayor Olivia Choiw said.
“Through our strong partnership with the Provincial and Federal government, we’re reducing the cost of building new homes and ensuring the City can keep investing in the infrastructure we need to support communities.”
The money will support major projects that are part of Toronto’s 10-year capital plan, such as transit, wastewater and roads.
The city said the money will allow it to open a new phase of its Purpose-Built Rental Housing stream and further reduce development charges.
The money will flow once Toronto City Council approves the deal to lower development charges for at least three years.
