EDITOR'S NOTE: We welcome new column contributor Richard Lyall to RENX Homes. As president of the Residential Construction Council of Ontario (RESCON), he has represented the building industry in the province since 1991.

The housing crisis is one of our greatest economic and social challenges. Recent government measures have provided some much-needed help, but modest progress is not enough.

The reality is that housing construction continues to fall far short of what is needed to restore affordability and meet future demand. 

If Ontario is serious about solving its housing shortage, the next phase of reform must focus on making it easier, faster and less expensive to build the homes Ontarians need.

Instead of temporary initiatives, we need lasting structural reforms.

To their credit, both the federal and Ontario governments have put housing affordability on the front burner. Recent measures to provide HST relief on new homes and the Canada-Ontario Development Charge Reduction Program (DCRP) are very significant steps in the right direction. 

Falling behind on targets

Ontario has also begun work on modernizing its building code.

But we are nowhere near reaching the housing targets. Ontario’s goal is to build 1.5 million new homes by 2031, or roughly 175,000 annually. 

We are falling dramatically short. Ontario recorded about 63,400 housing starts in 2024, and the province needs to accelerate construction enormously if it is to close the gap. 

Housing is fundamental to our economic prosperity and well-being, a core need alongside food and security. Yet it is still treated by many as an economic “want.”

It isn’t.

We must stop taxing housing and creating barriers to supply as if it were a luxury. The cost of production is too high – mainly due to the cumulative tax burden and inordinate amount of time it takes to get shovels in the ground.

So, what needs to happen?

Fees and taxes on new homes must come down

First, governments must reduce the taxes, fees and levies imposed on new housing.

Government charges now account for roughly 36 per cent of the cost of a new Ontario home. In the GTA, municipal charges can add well over $100,000 to the cost of a new home.

Development charges are another major contributor. In Toronto, the charge on a single-detached home increased by roughly 1,015 per cent between 2009 and 2024, while consumer prices rose by about 41 per cent.

Those costs do not disappear. They are ultimately reflected in the price paid by homebuyers.

While recent HST relief measures were welcomed, they are temporary and do not provide the certainty required to finance and build housing. The one-year HST rebate for eligible new homes should be made permanent. Builders, lenders and buyers need certainty measured in years, not months.

Permanent tax relief would reduce the cost of new housing, improve project economics and restore confidence to a market that has suffered a severe decline in new-home sales.

Second, development-charge reductions must become permanent.

The DCRP, which provides funding to municipalities so they can reduce residential development charges, is an important innovation. But it’s a three-year program and not a structural solution.

Development charges have become one of the largest obstacles to affordability in Ontario. Municipalities understandably need money for roads, sewers, transit and other infrastructure. But loading the full cost of growth onto each new home is an inefficient way to finance infrastructure.

The current reductions should be made permanent, with lost municipal revenues replaced through stable federal-provincial infrastructure transfers. Tax-free municipal bonds or other financing tools could also help fund housing-enabling infrastructure without burying the cost in the price of every new home.

If we want more homes, we cannot make each new home the financing vehicle for the infrastructure needed to support an entire community.

Speeding up approvals

Third, we must modernize the building code and transform the approvals system.

Ontario has begun this work, and that deserves recognition. But reform needs to go much further.

We should allow practical, proven building solutions, including single-staircase designs for midrise apartment buildings. Arbitrary restrictions on floor-plate sizes and angular planes should also be reconsidered where they do not serve a clear safety or planning purpose.

At the same time, Ontario needs a fully digital, standardized approvals system across all 444 municipalities. Too many builders still navigate fragmented, paper-heavy processes that can take years. 

GTA approval timelines can stretch well beyond 18 months, creating enormous carrying costs before a shovel ever hits the ground.

The solution is straightforward: digitize planning and building permits, establish standardized data requirements, introduce AI-enabled processing where appropriate and create as-of-right, pre-approved designs that municipalities can approve quickly.

An approval target of less than 12 months needs to be established, backed by deemed-approval provisions and automatic fee rebates when governments fail to meet statutory timelines.

Every month of unnecessary delay adds cost. Those costs eventually land on buyers and renters.

Temporary programs must be made permanent. We cannot build affordable housing through an approval system designed for another era. 

We have been heading down the wrong path for many years. It is time to change the trajectory.