RESCON calls for permanent HST cut, lower DCs to boost housing construction
By Robin MacLennan
Ontario Construction News
Sept. 11, 2026
The Residential Construction Council of Ontario (RESCON) is calling on the federal and provincial governments, along with municipalities, to permanently eliminate the HST from new home purchases, slash development charges and come up with a more sustainable approach to municipal infrastructure funding and implement initiatives such as digitization to modernize and accelerate the planning approvals and review processes.
Pointing to significant headwinds faced by the new home building sector, the agency set out its demands in a federal pre-budget submission.
“The residential construction sector continues to contend with a challenging market, due to stifling taxation and government-imposed costs, rising rates for material and labour, as well as cumbersome planning approvals processes and overly restrictive regulatory policies that hamper the industry,” RESCON president Richard Lyall said in a statement. “This has led to a dramatic downturn in housing construction and job losses, which harms the industry and the economy.
While encouraged by recent public policy decisions announced by the federal and provincial governments regarding the interim HST rebates and time-limited actions on development charges and other measures, Lyall says they don’t go far enough.
“The cost of building must be lowered, and the process must be speeded up. Builders need to be able to build homes that people can afford. Steps must be taken to get the industry back on track. We need a rebalancing of the housing supply system and to restore the cost of home to four times a household’s income.”
RESCON’s pre-budget submission includes 10 recommendations, including:
Permanently drop the HST from new home purchases or, at the very least, the original indexing mechanism included in the Goods and Services Tax be implemented fully.
Implement a more equitable, predictable and sustainable approach to municipal infrastructure funding to realign funding sources from new home buyers to the broader tax base at all levels of government.
Fund initiatives that will encourage, support, finance and implement advanced modern planning approvals processes and reviews, including digitization, building information modelling, standard designs and more expansive as-of-right building modalities.
“Sadly, many young people have given up on the Canadian dream of ever owning a home,” Lyall said. “Interim measures just don’t cut it. We must take steps to restore the balance by initiating predictable and stable programs and funding measures to boost the supply of housing.”
The metropolitan Toronto area is beginning to lose young families and entrepreneurs because of housing affordability, according to RESCON. Between 2024 and 2025, the region posted a population decline. In the City of Toronto, meanwhile, the number of children under five dropped by 12 per cent between 2011 and 2021.
Click here for the pre-budget submission.