The winds of change have begun to blow

By Paul De Berardis

Apr. 6, 2026

Amidst a faltering new housing market and persistent sales slump, finally some good news announcements came from the federal and provincial governments, as long-awaited housing-enabling policy reforms were introduced this past month.

RESCON has long touted that taxes, fees and levies, such as municipal development charges, federal/provincial HST and land transfer tax make up approximately 36 per cent of the cost of a new home. So, we were pleased to learn on March 25 that the Province of Ontario will be expanding the HST rebate to lower the cost of new homes in partnership with the federal government. 

This policy will remove the full 13 per cent of the HST for all eligible buyers of new homes, for a maximum rebate of $130,000. This builds upon the province and federal government’s previous move to rebate the HST for all first-time buyers of new homes. While the mechanics on the implementation of this broader HST have yet to be ironed out, this broader HST rebate is slated to come into effect April 1, 2026, and will hopefully incentivize sidelined prospective buyers to now consider new housing options.

To further up the ante, on March 30, the federal government and Province of Ontario announced an $8.8-billion, 10-year plan to support housing-enabling infrastructure in Ontario. 

This funding will directly support the reduction of municipal development charges by up to 50 per cent. This new infrastructure funding will offset much of the financial impact of development charge (DC) reductions on municipalities. However, municipalities will also be expected to further support DC reductions, so that all three levels of government are aligned in driving towards increasing housing supply and affordability.

Over the last decade or so, DCs have become a major upfront cost that financially burden the viability of new housing projects. This federal and provincial partnership on the HST rebate and DC subsidy will reduce the taxes and fees on a new home in Ontario by up to $200,000.

Unexpectedly, also on March 30, the Ontario government introduced Bill 98 – the Building Homes and Improving Transportation Infrastructure Act that would, if passed, tackle housing-related red tape, reduce unnecessary costs, and streamline approvals. More specifically, measures within the proposed legislation would simplify planning and approval tools, including through municipal official plans, Ontario’s Building Code and site plan control.

With respect to the Ontario Building Code, the province announced it will be establishing an expert third-party advisory body consisting of engineering, construction and code specialists to undertake a section-by-section review of the code. There are also proposed reforms to site-plan control to restrict some of the bloated and redundant requirements which municipalities have tacked on over the years, ultimately aiming to now deliver faster and more predictable approvals.   

What became clear through these latest housing announcements is that both the federal and Ontario governments have grasped the severity of the market downturn and broader economic impacts associated with the lack of housing construction which has transpired over the last few years in Ontario, largely due to runaway municipal DCs and unchecked municipal planning approval processes which became measured in years as opposed to weeks and months.

These decisive actions are a refreshing and deliberate recalibration which seek to lower government-imposed fees on new housing, ultimately borne by new homebuyers. When coupled with the regulatory streamlining proposals discussed in Bill 98, it is evident this may be the “Cinderella story” moment for the battered new-housing industry.

The only thing that remains to be seen is whether municipalities will follow suit and work to proactively align their policies and streamline approval processes to be more housing enabling as opposed to limiting.

While I remain hopeful, it was not long ago that municipalities such as Toronto and Markham blatantly defied their commitments under the Housing Accelerator Fund of the National Housing Strategy to remove barriers and encourage initiatives to build more homes, faster; even when being financially incentivized to be ambitious in their approaches to increasing housing supply and accelerating development timelines.

Obviously, time will tell, but for now it seems as if the stars have aligned and these policies will breathe new life into the Ontario new housing sector.