Development charges just got cut in half. Will it build anything?

A development charge is the fee a municipality levies on new construction to pay for the infrastructure that construction requires: water, sewers, roads, transit, libraries, fire halls. In parts of this region it ran to well over a hundred thousand dollars on a detached house, and builders have spent a decade saying it was the difference between a project proceeding and a hole in the ground.

That argument won. On March 30 the federal and provincial governments agreed to put $8.8 billion over ten years into municipalities that cut residential charges by half for three years. Toronto took $1.5 billion in June to cut its charges by 40 to 60 per cent through 2029, about $83,000 off a new single or semi. Vaughan went to zero in April, for up to $697 million. Mississauga had already halved its charges in January 2025 and eliminated them on family-sized rentals.

The test is whether the fee was ever the thing in the way. In the first three months of this year, 246 new condos sold across the GTA, a 35-year low, and not one new project launched. More than 4,000 completed units are sitting unsold. A cheaper building nobody is buying is still a building nobody is buying.

The other half of the argument has not gone away either. Growth costs money. The senior governments are covering the gap for three years; after that, either the fee comes back or the cost of servicing the new subdivision lands on the property tax bill of everyone already living there.

Sources: CP24, charges cut in half for three years · City of Toronto, the $1.5-billion agreement · City of Vaughan, charges to zero · Connect CRE, Mississauga’s $401-million deal · Urbanation, unsold inventory at a record