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If you watch Game of Thrones on HBO, you’ll see gangs of barbarians, giant, flying, fire-breathing dragons with the wingspan of a jumbo jet, and general pandemonium in every direction. There is no law and order – only turmoil, chaos and anarchy. The scenes underscore the critical importance of having rules in place to keep the peace.
Perhaps not to the same extent, but the residential construction industry, like other sectors and aspects of society, also relies on rules to ensure stability in the housing market. That’s why new housing legislation passed in Ontario recently by the Ford government is so pivotal. It will calm the waters by putting in place rules to streamline development processes and reduce costs by establishing consistent construction standards across all municipalities. The legislation, known as Bill 17 or the Protect Ontario by Building Faster and Smarter Act, was introduced and passed by the government in response to housing pressures and economic uncertainty. The legislation builds on two previous pieces of legislation: the Get It Done Act of 2024 and the More Homes Built Faster Act of 2022. Critically, it reasserts that the Ontario Building Code (OBC) is the law of the land with respect to green standards, defers the collection of development charges (DCs) until occupancy rather than much earlier in the process, and limits what municipal projects can be included in DC studies.
The OBC covers the methods and materials of construction and has evolved over time with conservation in mind. The code was introduced in 1975 after years of consultation and building science and cost-benefit analysis. The rules provide predictability and promote safety. Bill 17 makes it clear that municipalities can not pass bylaws related to the construction or demolition of buildings, which means they will no longer be able to impose green standards, for example, that are different from those established under the OBC. In addition, new regulations will limit what studies municipalities can request from developers during the planning process. At least 14 municipalities in Ontario, including Toronto and Hamilton, have adopted independent policies that require new buildings to meet higher environmental performance benchmarks. However, the fact of the matter is that we are already one of the greenest building jurisdictions in North America. These changes recognize that fact and set the record straight.
We have a housing supply crisis with many factors that need to be addressed. Duplication and mission creep on green standards being developed by municipalities does not help and is unnecessary. Instead, municipalities should focus on their core responsibilities and not delve into building code issues that are the responsibility of the province. Doing so creates confusion, raises housing costs which are already unaffordable for the middle class, and causes delays in projects being built. The OBC addresses these matters. We don’t need municipalities spending valuable staff time developing, for example, their own individual green standards. Many municipalities aren’t hitting housing targets. They’d be better off focusing on that rather than trying to one-up the OBC.
Prior to Bill 17 being passed, DCs for all residential development were payable at the time s building permit was issued. However, under the new legislation it is payable on occupancy of the building. This will result in savings for developers and consumers who ultimately pay the DCs.
According to a report prepared by Ross McKitrick, a professor of economics at the University of Guelph, municipal DCs are a large component of the cost of new builds. A report by the Canadian Centre for Economic Analysis revealed that taxes, fees and levies account for 36 per cent of the total cost of a home purchase in Ontario – up from 31 per cent three years ago. McKitrick maintains that Canada needs a national database of DCs that shows specifically how much he various individual municipalities charge for each type of housing development with a breakdown of the components, as well as historical DC financial accounts listed by municipality. By making the data publicly available in a readily accessible format, he figures that citizens would begin to see how their city compares to others and in places where the DCs are excessive. It’s a good idea and would draw attention to how much DCs are contributing to housing costs.
Our housing and sales starts are grim. In fact, they are the worst the market has seen since the 1990s. For example, in the Toronto area, there were only 310 new home sales in April, down 72 per cent from the same month a year earlier, and 89 per cent below the 10-year average. A recently released RBC report noted that a household earning the median Canadian income would now need to allocate two-thirds of its income to housing costs in order to afford a home. We must do better. To tackle the problem, the residential construction industry needs stability and predictability, not bedlam and disarray. The new provincial legislation moves us in the right direction.
Richard Lyall is president of the Residential Construction Council of Ontario (RESCON). He has represented the building industry in Ontario since 1991. Contact him at me***@****on.com.