Senate report finds large gaps in municipal approval times and development fees
A Senate committee says approval timelines and developer charges vary widely across Canada, urging federal incentives and tax relief to speed housing supply.
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By Torontoer Staff
A Senate committee study has identified stark differences in how long Canadian cities take to approve housing projects and how much builders are charged, and it recommends tying federal funding to municipal reforms. The committee found approval timelines ranging from 10 months in Calgary to more than two years in Toronto, and developers told senators a project can take up to 11 years from first proposal to completion in Toronto.
The standing Senate committee on banking, commerce and the economy says the variation is driven by differing regulatory processes, inconsistent involvement from municipal agencies, and growing development charges that are being used for broader city budgets with limited transparency.
Major findings from the committee
The report highlights three core issues: lengthy and uneven approval timelines, large discrepancies in development charges, and weak transparency about what those charges fund. The committee compared cities and found Calgary could take roughly 10 months from application to permits, while Toronto often takes more than two years. Builders reported cases where the overall process in Toronto stretched to 11 years.
- Approval timelines: examples show Calgary at about 10 months, Toronto more than two years, and some Toronto projects taking 11 years to complete.
- Development charges: roughly $200,000 added to a single-family home in Toronto, compared with about $10,000 in Moncton.
- Regulatory complexity: some municipalities involve up to 50 agencies in a review, others involve fewer than half that number.
- Transparency gaps: fees increasingly cover general city expenses rather than only infrastructure for new neighbourhoods.
What the report recommends
The Senate outlines 12 recommendations aimed at aligning municipal practices with the most efficient jurisdictions, increasing transparency around fees, and using financial incentives from the federal government to push reforms. It also calls for tax measures to lower costs for buyers.
- Make federal funding contingent on municipalities demonstrating faster approval timelines and lower development charges.
- Require clearer reporting on what development charges fund and limit their use to infrastructure tied to new housing.
- Use incentives to encourage municipalities to adopt streamlined regulatory processes used in faster jurisdictions.
- Eliminate GST/HST on new housing units valued under $1-million, and reduce tax on homes up to $1.5-million.
- Remove GST/HST on multiunit rental buildings to support rental supply.
There is no reason why Calgary can go from first application to building permits in months and Toronto needs years, and there is no impressionable difference in the outcome.
Toni Varone, deputy chair of the Senate committee
Responses and context
The federal 2025 budget set aside $1.2-billion annually to reduce municipal development charges, but senators say the plan lacks clear conditions and definitions of which municipal expenses are appropriate to charge to developers. The Department of Finance declined to comment directly on the report, saying the government is focused on lowering costs through tax cuts and measures to boost supply.
Economists and housing experts cited in the report view the recommendations as a necessary complement to federal spending. Benjamin Tal, managing director and deputy chief economist at CIBC Capital Markets, argued that modest reductions in development charges will not be enough.
We have to realize that a reduction of development charges of 30 or 40 per cent will not be sufficient. We have to basically eliminate them for it to make a difference.
Benjamin Tal, CIBC Capital Markets
Mike Moffatt, founding director of the Missing Middle Initiative at the University of Ottawa, told the committee that using development charges to fund parks and wastewater infrastructure transfers costs to new homeowners in the form of higher mortgages. He called for tax relief as the fastest federal lever to reduce prices.
The GST/HST reduction is something the government can essentially do with a stroke of a pen.
Mike Moffatt, University of Ottawa
Ontario Premier Doug Ford said the province should cut its portion of the HST on all new home purchases, noting earlier targeted relief for first-time buyers did not increase housing starts.
What this means for buyers and builders
If Ottawa and provinces move to eliminate or reduce GST/HST on new homes, buyers could see immediate price reductions on newly built units. More significant, the report argues, would be municipal reforms that shorten approval timelines and make development charges predictable and transparent, which would reduce carrying costs for builders and the added fees passed to buyers.
For developers, faster approvals would lower financing costs and make projects more viable, especially for multiunit rental buildings. For municipalities, the committee urges clearer budgeting so residents and builders understand who pays for growth and why.
The report frames municipal reform as a national priority that requires coordinated action from federal, provincial and municipal governments, backed by financial incentives and clearer rules on development charges.
Implementation would take time, and some measures, such as tax changes, could have more immediate effects. The Senate committee urges that federal funds intended to lower development charges be tied to verifiable reductions and streamlined approval processes.
The committee says standardizing practices across municipalities and restoring clarity to development charges could remove tens of thousands of dollars from the price of new homes in the most expensive cities, while speeding the delivery of new supply.
housingdevelopment chargesSenate reporthousing policyToronto
