Not all Ontario cities are created equal when it comes to the cost of building a new home. While the federal-provincial announcement of March 2026 has put development charges front and centre in the affordability conversation, the story looks very different depending on where you’re building in the province – let alone the country.
For context, a developer breaking ground in Vaughan faces a fee load nearly nine times what their counterpart would pay in Calgary and even within Ontario, the spread between the most and least expensive municipalities runs to more than $150,000 per single home.
The goal here is to map out development charges across Ontario's major municipalities, explores why the numbers diverged so dramatically over the past decade, and tracks which cities have already acted and which ones still haven't.
City by City: What Builders Actually Pay
The chart above ranks 12 Ontario municipalities (plus Calgary as a national reference point) by their total development charge for a single-detached home, combining local and upper-tier charges where applicable. The variation is striking.
At the top of the scale, Vaughan was charging $190,000 for a single or semi-detached home and $160,000 for a townhouse before its 2024 reductions according to CMHC. In Vaughan, development charges on a single detached unit were just shy of $200,000 at their peak, prompting the mayor to declare that the fees had become "an unfair tax burden on homebuyers."
Toronto follows closely. Development charges on a single detached or semi-detached unit in Toronto stand at $137,846 as of 2025, according to the Toronto Region Board of Trade. For comparison, the charges cost homebuyers $132,839 in Markham, $124,876 in Brampton, $118,308 in Mississauga, and $97,041 in Toronto according to data cited in a 2024 Ontario Construction News reporting by the Canadian Press - figures that have since been updated upward for most of these municipalities.
Move further from the GTA and the numbers fall sharply. Charges in London are closer to Ottawa's level at $44,076, and the City of Kitchener's local development charge for a single detached home sits at approximately $25,514 (though this figure excludes the Region of Waterloo's separate charge, which adds substantially to the total).
By comparison, development charges on a comparable new home in Calgary are just $22,000 which is less than one-ninth what a builder pays in Vaughan, and a figure that puts Ontario's outlier status in sharp relief. (In case you we wondering … I have had a number of clients over the past number of years make moves from Ontario to Alberta which is why I thought it interesting to add Calgary for context)
How Did It Get This Bad?
The second chart compares approximate 2011 development charge rates against 2024/2025 rates for six major Ontario cities, with the percentage increase labelled on each bar.
In Toronto, development charge rates per single-detached unit rose from approximately $14,000 in 2011 to over $97,000 by 2023 (a 592 percent nominal increase) and the trend continued from there. Over a 20-year period between 2004 and 2024, an analysis of 27 municipalities in Ontario found that all of them increased their development charges for single-detached units more than the rate of general inflation (54%) and the construction price index (144%), with some municipalities seeing increases of as much as 800% as we will see below. This from the Prime Minister’s Office (March of 2026).
The PMO went on to highlight London's story. They note that in 2004, the development charges for a single-detached home in London were $5,152. Adjusted for inflation, those charges would cost $7,933 in 2024. Instead they increased by over 800% in that same period.
So what happened?
As most residents of Ontario know, cities face major infrastructure needs. Everything from roads to bridges to sewers are all aging. In an extreme example, the Region of Waterloo has had to freeze development in part due to aging water infrastructure. According to a background report prepared for Greater Sudbury, an estimated at $250–$290 billion in capital investment will be needed in Ontario over the next decade, including more than $100 billion tied to growth.
One part of the issue has been municipalities avoiding tax increases and postponing preventative maintenance. Think saving money today by not doing oil changes only to be left with a far large bill when your engine goes. Another part of the issue is that municipalities are often legislatively barred from issuing debt or levying new taxes. As a consequence, they have leaned more heavily on DCs.
The Reserve Fund Problem
As if revenue and spending issues were not enough, one of the most controversial aspects of Ontario's development charge system is what happens to the money once it's collected. It doesn't always flow through to the infrastructure it was meant to fund.
Between 2007 and 2023, the amount of unspent infrastructure money in Toronto's development charge reserves grew from $172 million to $3.1 billion. That is a 1,708% increase (Missing Middle Initiative). Toronto has $2.26 billion in DC reserves, with $1.89 billion earmarked for spending between 2021 and 2025. Ottawa has $724 million in reserves, with $655 million committed. Both cities could go six years without collecting any development fees and still meet their spending targets this reported by Global News.
The provincial government stepped in with legislation in 2025. The Protect Ontario by Building Faster and Smarter Act would ensure municipalities allocate at least 60 per cent of their development charge reserves, following the examples of Vaughan and Mississauga. According to data shared by the provincial government, Ontario's 444 municipalities have roughly $10 billion in the bank between them, funds collected from developers building new housing again as reported by the Prime Minister's Office.
Development Charges as a Share of Home Price
The third chart shows development charges as a percentage of average new home prices across eight Ontario cities.
For a single-detached home, development charges vary from around $125,000 in Pickering to about $180,600 in Toronto, representing between 9.4 per cent and 8.5 per cent of the average single-detached home price in those markets. In Brampton and Hamilton, where average new home prices are comparatively lower relative to the DC burden, the proportion climbs higher.
And development charges are only one layer. Including sales taxes on the purchase of a new home (13% HST in Ontario) the government's portion can amount to 31% of the purchase price of a new home in Ontario, according to a report by the Canadian Centre for Economic Analysis on behalf of the Civil Construction Alliance of Ontario.
Who Has Already Acted And And Who Hasn't
The reform tracker above gives a snapshot of which municipalities have taken independent action ahead of the federal-provincial announcement, and which are waiting on the new $8.8 billion fund.
Vaughan moved first and most aggressively. Having taken effect on November 19, 2024, Vaughan's DC Rate Reduction and Deferral Policy introduced substantial reductions of between 88% and 92% depending on housing type, resulting in savings of up to $44,273 for single-detached or semi-detached homes, and includes a suspension of interest on DCs for residential projects.
Mississauga followed in January 2025. The City approved a motion reducing residential development charges by 50% and by 100% for three-bedroom units in purpose-built rental apartments for projects that pull building permits before November 13, 2026, with the City also deferring the collection of residential development charges for all residential developments to collect them at occupancy instead.
Hamilton took a more modest step. Hamilton City Council adopted a motion to decrease development charges on all residential and non-residential development by 20% starting from September 1, 2025, to August 31, 2027 (this a two-year pilot program intended to boost housing supply). This equates to DCs for a single detached home in Hamilton being reduced from $98,511 to $78,809. Industry voices noted this was still insufficient. While DCs in Hamilton are somewhat lower compared to other Ontario municipalities, Hamilton's DCs have increased by 227% over the last decade which is significantly above inflation's 30% rise over the same period.
Mississauga became the third GTA municipality to reduce development charges in the last year, following Vaughan in November and Burlington in May.
A Tale of Two Ontarios
What emerges from this data is really a tale of two Ontarios: On the one hand the GTA and its inner orbit, where development charges can consume 10–15% of a new home's price and approach $200,000 per unit. then on the other hand mid-Ontario cities like Kitchener, Guelph, Ottawa, and London, where the charges are still substantial but considerably more manageable.
As of November 2024, Guelph's development charge rates were at the lower end of municipalities in southern Ontario. Guelph's current bylaw sets $64,813 per single or semi-detached home (still more than double what a builder pays in Calgary - to bring our friends out west back in the picture- but a fraction of the Vaughan or Markham rate. Kitchener's local charge sits at approximately $25,514 per single-detached home, with the Region of Waterloo's charge on top although though the combined figure remains well below GTA levels.
The implication for buyers is direct. A young family choosing between a new home in Markham and one in London isn't just comparing school boards and commute times. They in very real terms are they're comparing a built-in government cost difference of nearly $90,000, before the first brick is laid.
What the New Deal Means for This Landscape
The March 30 federal-provincial announcement is designed to compress this geography. By targeting municipalities covering 80% of Ontario's population with up to 50% DC reductions over three years, the deal aims to bring GTA-level charges down toward the range currently seen in mid-Ontario cities.
But the effectiveness of the program will depend on municipal uptake. Cities that moved early like Vaughan, Mississauga, Burlington, have already demonstrated that reducing charges is feasible without immediately catastrophizing infrastructure delivery. The holdouts, including several major GTA municipalities, will now face a stark choice: apply for the offsetting infrastructure funds and cut charges, or watch neighbouring cities pull ahead on new construction and housing affordability.
Successfully navigating a commercial real estate transaction requires precision, market knowledge, and an expertly crafted offer that leaves nothing to chance. If you are looking to sell or expand your portfolio let’s connect.
Contact Terry Riddoch today to discuss your commercial real estate strategy. 📱 Cell: 519-591-1725 ✉️ Email: [email protected] 🌐 Website: www.TerryRiddoch.ca
Some of the links used in this post:
https://www.ontario.ca/page/municipal-development-and-community-benefits-charges-and-parklands
https://www.greatersudbury.ca/live/building-and-renovating/development-charges/
https://www.cmhc-schl.gc.ca/observer/2025/we-built-this-city-development-charges
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