Slashing Development Fees Is Not a Cure-All for Housing Affordability: CMHC A new analysis from the federal housing agency suggests that while cutting municipal development charges could encourage construction in expensive Canadian markets, these reductions alone are insufficient to close the housing affordability gap. Development charges are fees levied by cities on developers for infrastructure to support new housing. The federal government is investing billions to incentivize municipalities to halve these fees, aiming to increase housing supply and improve affordability, particularly in the greater Toronto and Vancouver areas.

• Cutting municipal development charges could stimulate building in Canada’s priciest housing markets.
• These fee reductions alone are not enough to resolve the housing affordability gap.
• Development charges are fees cities collect from developers for infrastructure costs.
• The federal government is funding initiatives to encourage municipalities to cut development fees by 50% to boost housing supply and affordability.
• These measures are seen as potentially helpful for areas like the greater Toronto and Vancouver regions.