Housing coalition urges Ottawa, Ontario to rescue stalled homebuilding

A coalition of 17 housing and development organizations is urging Canadian and Ontario political leaders to take bold actions to revive the country’s stalled housing market, warning without immediate policy changes thousands of planned homes may never be built.

In a letter to Prime Minister Mark Carney and Ontario Premier Doug Ford, the Housing Advancement Coalition outlined ways to jump-start construction and address the worsening housing shortage.

“We must act now through bold measures; the time for incremental steps is behind us,” the coalition states. “The housing sector stands ready to partner with both orders of government to translate these reforms into real homes, real jobs and lasting affordability for Canadians.”

Chief among the recommendations is expanding the federal GST rebate on new homes to all buyers, reforming municipal development charges and eliminating regulatory barriers that delay housing projects.

The steps are essential to increase supply at a time when the housing sector is slowing sharply despite strong long-term demand, according to industry leaders.

Stakeholders say many approved projects across the country are stalled because the cost of building new homes has risen dramatically.

At the centre of the coalition’s recommendations is a call for Ottawa and Queen’s Park to temporarily expand the sales tax rebate on new homes to all buyers, not just first-time purchasers.

“On a typical $1 million new home, this move would save buyers up to $130,000, allowing seniors to downsize, families to move up and first-time buyers and younger households to enter the ownership market,” the coalition states.

Recent federal and provincial commitments to remove the sales taxes for first-time buyers of new homes represent a positive step, the coalition says, but restricting the rebate to first-time buyers fails to address the broader slowdown affecting the entire housing market.

The coalition argues expanding the rebate to all purchasers for a limited time — for example, three years — would act as an immediate stimulus for housing construction.

Industry leaders say this measure would help revive demand for new homes, particularly in the struggling condominium sector where buyers are often investors or move-up purchasers rather than first-time buyers.

Advocates say the policy would have ripple effects throughout the economy, supporting jobs in construction and related industries such as manufacturing, building materials and home furnishings.

Ford himself has previously argued limiting tax relief to first-time buyers is too narrow, suggesting broader tax reductions could stimulate economic activity tied to housing construction.

Another key recommendation is reforming municipal development charges.

A 2025 study by the CMHC found many of the municipalities with the highest development charges in the country are located in Ontario, underscoring the extent to which local fees are compounding affordability challenges and suppressing new housing supply.

While municipalities rely on these charges to fund infrastructure, the coalition says they have risen dramatically in recent years and now add enormous costs to new homes.

In some major urban markets, development charges can exceed $100,000 per unit – and in certain cases approach $200,000 for single-family homes.

The coalition is calling for governments to work with municipalities to restructure the system so infrastructure costs are funded more broadly rather than loaded entirely onto new housing.

Possible reforms include deferring development charges until occupancy, spreading infrastructure costs across the broader tax base or introducing provincial funding programs to support municipal infrastructure.

Beyond taxes and fees, the coalition says one of the biggest obstacles to housing supply is the complex web of municipal regulations that delay or prevent projects from moving forward.

“Across many of Ontario’s largest urban municipalities, housing delivery is constrained not by zoning or permissions on paper, but by the cumulative impact of approval delays, layered technical requirements, escalating fees, and discretionary decision-making,” the coalition states.

Planning approvals can take years to complete in some jurisdictions, creating uncertainty for developers and raising carrying costs that ultimately get passed on to buyers.

The coalition is calling for sweeping reforms to streamline the approvals process and eliminate unnecessary delays.

Among the recommendations are digitizing planning approvals, setting strict timelines for municipal decisions and reducing the number of overlapping studies and consultations required before construction can begin.

The coalition’s letter emphasizes that solving Canada’s housing crisis will require co-ordinated action from all levels of government.

While the federal government controls policies such as the GST rebate, provinces have authority over planning rules and development charges, and municipalities control zoning and approvals.

Industry leaders say collaboration among these levels of government is essential to unlock housing supply. Without decisive action, they warn, Canada risks falling even further behind.