John Turley-Ewart is a contributing columnist for The Globe and Mail, a regulatory compliance consultant and a Canadian banking historian.
If Canadians are not talking about something U.S. President Donald Trump muttered or did, they are talking about housing – the kind you own. Most households, 66 per cent, own their homes. If you didn’t grow up in a family-owned home, you grew up in one that aspired to it.
To talk of housing in Canada is often to bear witness to the tangible decline in our living standards, expectations and confidence in politicians we elect. Today, this country, with all its abundance, cannot offer young adults the chance to own affordable homes suitable for raising a family in. Most politicians are looking the other way. We shouldn’t let them.
Last spring Canada’s Minister of Housing, Gregor Robertson, was fresh in his role and more honest than most. He said keeping house prices “stable” was Ottawa’s priority, versus pursuing policies to reduce them. The federal government does not want to upset existing homeowners with changes that could impact their house values. Neither do most premiers.
Mr. Robertson has been true to his unguarded word. His new housing agency, Build Canada Homes, focuses “primarily on non-market housing,” meaning $13-billion for rentals for low-income Canadians and the homeless.
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The focus on rentals allows the pillaging of new construction homebuyers by using taxes, fees and bureaucracy to continue. In Vancouver, where Mr. Robertson was once mayor, that adds “$644,000 to the average new house,” research by the C.D. Howe Institute shows. The pillaging is politely called “development charges.”
They have been thoroughly studied by the Canada Housing and Mortgage Corporation. It reports, for example, that the City of Toronto’s development charges typically add $130,000 to the price of a new condominium. For a new single-detached home – the sort of housing young Canadians 30 to 44 years old would start a family in – it is on average about $180,000.
A new study by the Ontario Real Estate Association, or OREA, and the Missing Middle Institute reveals that development charges in the City of Toronto over the past 25 years increased by 5,186 per cent, or 70 times the rate of inflation during that period.
Canada’s largest city has literally gorged on those buying newly constructed properties, often young families. Many have understandable doubts about where such funds are allocated. Abacus Data polling suggests that in Ontario only 26 per cent of people believe municipalities use development charges for the stated purpose.
Toronto Mayor Olivia Chow likes to repeat the mantra “Every Torontonian deserves an affordable place to call home,” yet most Torontonians want an affordable home they can own. Her city’s development charges dash that hope. When voting at the polls for change does not work, young adults in Toronto vote with their feet.
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The city has seen a steady stream of young families move out of Toronto to surrounding municipalities and other provinces such as Alberta and Nova Scotia in search of affordable home ownership. Vancouver has seen similar trends. Canadian cities are becoming no-go zones for Canadians that want children.
The surge in higher development charges gained momentum around 2011 in Canada. In the Greater Toronto Area, these charges generated so much cash so fast that municipalities could not spend it all. By 2019, accumulated unused development charge reserves amounted to $3.25-billion, according to research by Miller Thomson, a prominent national legal firm.
What also began in 2011 was the decrease in home ownership in Canada. Renter households increased by 21.5 per cent between 2011 and 2021. Owner households grew by just 8.5 per cent. This isn’t correlation, it’s causation. The evidence is overwhelming.
Ontario Premier Doug Ford has options beyond tinkering with removing the provincial portion of the HST on new construction homes, something the federal government also tinkers with rather than doing what is needed.
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The Premier could, for example, take heed of what the provincial government of Premier Tim Houston is doing in Nova Scotia. It passed legislation, Bill 329, in 2023 that freezes development charges in Halifax.
Mr. Ford could bring to life recent Toronto Region Board of Trade recommendations, which include modernizing the Ontario Development Charges Act to support affordability and remove water and wastewater costs from development charges that would reduce these charges across the GTA “by 30 to 50 per cent.”
The better option is to accept OREA’s proposal to suspend development charges in the province for two years and institute reforms that ensure development charges in the future are sustainable, a move that would surely kick-start new home construction in Ontario, which has flatlined.
What premiers and the federal government can no longer do is nothing for Canadians who want to own homes they can raise families in. Development charges are undermining those dreams, and the living standards younger Canadians have every right to demand.