Ford Government Talks Housing At RESCON Meeting

The Ontario housing buck definitely stopped at the Residential Construction Council of Ontario meeting Jan. 22 in Vaughan, Ont., with Ontario premier, Doug Ford; minister of municipal affairs and housing, Robert Flack; Vaughan mayor, Steven Del Duca; Guelph mayor, Cam Guthrie; and Barrie mayor Alex Nuttall all taking the stage to share their perspectives on the challenges facing homebuilding. The program then got a dose of scientific reality from Missing Middle Initiative’s Mike Moffat.

The view from the top

Ford hit familiar themes, speaking about the need to protect Ontario against Trump’s trade hostilities and expressed his Reagan-esque economic approach, saying “nothing is worse than government” when it comes to business and that the best way to support the economy is for governments to leave money in people’s pockets. He then went on to boast about his $20 billion plan for government spending on infrastructure. Maybe that is OK because he also said Ontario has attracted $70 billion in investment in the eight years he’s been in power. Ford said residential construction has never been as important as it is now and it is the job of government to create the conditions for building rather than doing the building itself. He noted that Ontario is planning to rebate the eight-percent provincial portion of HST back to first-time homebuyers and seeking federal cooperation in removing the entire HST from new homes. Ontario has also removed the eight-percent provincial HST from new purpose-built rental housing. But Ford was clear that he didn’t feel applying the rebates just to first-time homebuyers was going to move the needle on housing supply because “zero times zero is zero.” The problem, he said, was that new homes are not being built and until they are there is nothing for new buyers to buy.

Taking Flack

Flack then took the stage to reiterate the government’s efforts to get HST relief on homes and express his support for Ontario’s homebuilders, saying “Governments don’t build home, you do.” He was sharp in his criticism of municipalities that have not done enough in his view to reduce development charges, claiming DC money is sitting in city accounts and councils are finding loopholes in the rules for deferring collection of DC funds. He pointed to harmonization of codes and building standards across the province as a way to stimulate building, mentioning the Toronto Green Building Standard without clarifying whether the goal would be for that standard to be applied everywhere or for it to be modified to agree with standards in other places. He said spending on infrastructure was still insufficient and warned that in this environment “reducing revenue is difficult”…in other words, do not expect tax cuts. One municipal official in the audience complained that even when they waived DCs on new construction, the local region did not. Another questioner from Habitat for Humanity noted that DCs are often waived on collaborations with non-profit homebuilders.

The crusader

Del Duca hit the alarm harder saying government action has not matched the rhetoric. The coming crisis in housing supply and affordability was evident, in his opinion, since 2016 but provincial leaders have been content to kick the can down the road. He pointed to his own record of cutting DCs in half as a potential solution and also referenced Mississauga’s “three strikes, you’re in” policy where, if a site plan goes through three rounds of comments and there are still issues, the builder gets an in-person meeting with city staff to hammer out the problems. Del Duca also called out the need to reduce red tape, saying he had reduced the city of Vaughan’s official plan from 450 pages to 150. He echoed Flack’s complaints about municipalities playing games with the new rule deferring collection of DCs until occupancy, saying in Vaughan they went and got a legal opinion on what “occupancy” meant and proceeded from there, while other towns have “done everything possible to delay and obscure and misinterpret what the province’s intent was.” The federal government did not escape Del Duca’s wrath. He said Vaughan had $8 million of its $60 million Accelerator Fund grant pulled back because it failed to meet its targets for new building. That narrow perspective, Del Duca feels, did not recognize that Vaughan had done much more to incentivize building than other municipalities that did receive the entire funding package. Other mayors, according to Del Duca, had been heard laughing about getting Accelerator money while leaving DCs untouched or even raising them. He said upper levels of government should tie infrastructure grants to lowering DCs.

From left, Cam Guthrie, Alex Nuttall, John Capobianco.

Writing for the dissent

Then it was time for something completely different: a panel discussion with two mayors. Guthrie delivered the common municipal pushback that Guelph had 6,000 approved projects for which permits had not been pulled and shovels were not in the ground, suggesting the problem is not fees or red tape but rather market forces. Nuttall pointed to Barrie’s experience in waiving DCs for affordable housing projects that resulted in over 400 units being built and a massive reduction in the homeless presence on Barrie’s streets. People were, he said, yelling out of car windows to thank him. Guthrie said Toronto’s affordability crisis was causing a “drive ’till you qualify” effect where people go farther and farther down the 401 looking for less expensive housing, then eat up the supply at the destination and drive prices up. Nuttall complained that municipalities get all the blame for housing shortfalls but are prevented by provincial and federal rules from taking steps that might help. He wants the power to waive certain rules and regulations for the kinds of development Barrie needs, but is constrained by provincial laws to apply the same standards to every project. Nuttall noted that, in the U.S., jurisdictions waive requirements all the time for projects considered to be of special value to the area.

Back to school  

A deathly chill settled over the room full of municipal leaders as Professor Moffat displayed his 2025 Housing Report Card, grading Ontario municipalities on their performance last year. Over the sound of grinding teeth, he delivered the ugly news: out of 34 municipalities, there were two As, two Bs, three Cs and the rest Ds or Fs. Unfortunately, no one could say anything because he had the numbers to back it up. Housing sales in the GTA have collapsed from 40,000 in 2021 to 10,000 last year. The problems are not limited to the GTA, with other formerly hot markets like Kitchener/Cambridge/Waterloo crashing, too. The culprits? Higher interest rates, economic uncertainty, a slowdown in population growth due to reduced immigration and forward-looking expectation that prices will drop. The end result of which is the price of a newly build home being too high to compete with the resale market. But even as prices have dropped from their COVID highs, costs have not. So in order to incentivize new building, either prices must rise or costs must fall. Governments must choose which they wish to encourage. Since only a suicidal government would seek to drive the price of housing higher, Moffat suggested 10 ways that governments might help reduce housing costs.

1. Speed up approvals processes using AI;
2. Reduce hard costs to builders by allowing the use of cheaper materials;
3. Reduce land costs by allowing more units per lot and higher buildings;
4. Find ways to reduce DCs and other fees;
5. Lower interest rates;
6. Help builders improve productivity and reduce project durations;
7. Slow the pace of change in legislation to make investment less risky;
8. Remove the HST from home sales;
9. Deferrals of DCS and other fees until occupancy;
10. Eliminate the tax-on-tax effect.

That last one might bear some more explanation. When a builder is charged DCs, that amount is rolled invisibly into the sale price of the home. Then, when the home is purchased, the buyer pays HST on the whole amount…including the DCs. This amounts to a tax on a tax. Moffat suggests the DCs should be broken out as a line item and the HST only applied to the rest of the bill.