Governments have stepped up and taken action

By Richard Lyall

Apr. 6, 2026

We have seen a flurry of activity recently from both the Ontario and federal governments on the housing front. Kudos to Premier Doug Ford and his team and Prime Minister Mark Carney for providing needed alignment on these critical measures. And to the leadership shown by ministers Peter Bethlenfalvy, François-Philippe Champagne and Rob Flack on taxes, development charges and red tape hammering housing consumers.

First, Bill C-4, landmark legislation that eliminates the five-per-cent federal GST for first-time buyers, was passed by the Senate. The legislation eliminates the GST on new homes priced at or under $1 million and reduces it for first-time buyers on homes between $1 and $1.5 million. Ontario announced it would follow suit with the eight-per-cent provincial portion of the HST. 

Second, two weeks later the federal and Ontario governments announced they were extending the 13-per-cent sales tax break on new homes worth up to $1 million to all buyers - not just first-time homebuyers for up to one year. For homes priced between $1 million and $1.5 million, the rebate is capped at $130,000. For homes priced between $1.5 and $1.85 million, the rebate amount decreases proportionally from $130,000 to $24,000. The first-time buyer and broader provision have different timelines and conditions.

Third, earlier this week, Ford and Carney held a press conference to announce that their two governments have joined forces in a landmark deal to support the vital reduction of development charges. The leaders and their teams are to be commended for taking these critical steps, as they will boost the residential construction sector and make homes more affordable.

Meanwhile, Municipal Affairs and Housing Minister Rob Flack held a presser to announce legislation aimed at tackling red tape, streamlining approvals, and reducing other barriers to homebuilding as well as new measures for supporting growth-related infrastructure and transit.

The legislation, called the Building Homes and Improving Transportation Infrastructure Act, aims to simplify planning and approval tools, including through municipal official plans, Ontario’s Building Code and site plan control.

Proposed changes include establishing an expert third-party advisory body consisting of engineering, construction, and code specialists to undertake a section-by-section review of the Building Code.

Combined, these measures should move the needle. We must lower the tax burden on new housing and speed up the approvals process to reduce the ratio of housing costs to incomes which had become grossly imbalanced (doubling in 20 years).

The industry is at a critical time.

Latest projections from the province show that new home starts are expected to fall to 64,800 this year, from 65,400 in 2025. The province is anticipating a slight improvement in 2027, with 70,300 new housing units projected. However, it became clear that action which continues to tax housing the same exorbitant way and expecting a different result would not cut it.

Development charges (DCs) levied by municipalities can push up the expense of building a home by tens of thousands of dollars. For the past couple of decades, DCs have been on a trajectory that is unsustainable and economically counterproductive.

They are particularly onerous for those entering the market for the first time. Over the years, they have grown to become one of the largest components in the price of a new home.

It is refreshing to see the federal and Ontario governments working together to tackle the housing crisis. Those municipalities that jacked DCs beyond any rational level (ie. 5,000 per cent in Toronto over 25 years) must come to the table.

These needed measures, unlike geopolitical events, are within our control. They will show some results as the reduction in costs are now the equivalent of more than a downpayment in many critical markets. This is vitally important to house people with dignity, attract business investment and save many of our world-class development and construction teams.

Stay tuned for more developments and webinars with the experts on how this will unfold and what clarifications and adjustments will be needed.