Ontario’s housing crisis has reached a point where euphemisms no longer help. This is not a normal market correction, a soft landing or a temporary cyclical slowdown. It’s a system error.
Home construction starts have all but disappeared, just when we need new homes most. Ontario’s upcoming budget must tackle the problem head-on and include measures to reinvigorate the industry.
The cost-to-income ratio of housing in Ontario now exceeds 9:1, putting ownership well out of reach for many middle-class families.
In the Greater Toronto Hamilton Area, single-family home sales are down 71 per cent and condominium sales are down as much as 90 per cent. In Ontario’s major urban centres, the number of new homes has fallen sharply year over year, with Toronto alone seeing a decline of almost 60 per cent.
Tens of thousands of construction jobs have already disappeared, and economists warn the housing collapse could shave between 1.5 and 2.5 percent of Ontario’s GDP over the next two years.
In a recent pre-budget submission, RESCON laid out ten ways to solve the problem. For RESCON, the 2026 Budget is not just a budget exercise.
We have called on Queen’s Park to take decisive action with a package of reforms aimed at restoring affordability and reviving housing.
At the heart of the argument is a simple premise: housing is a basic economic need, not a luxury item, and should not be taxed or regulated as if it were alcohol or tobacco.
The 2026 Budget is an opportunity for the province to reverse years of policy drift that has led to tiered taxes, fees and delays for new housing until many projects no longer make financial sense to build.
One of our most prominent requests is an expansion of Ontario’s share of the HST rebate to all first-time homebuyers for homes priced up to $1.3 million, not just first-time buyers.
By expanding the rebate more broadly — and pushing Ottawa to follow the federal share — the province could lower the upfront cost of new housing and help restart stalled projects.
Arguably more urgent is RESCON’s call for a return of municipal development charges (DCs) to 2015 levels for a period of three years and a fundamental rethink of the way infrastructure is financed.
DCs have grown explosively in many municipalities. They are essentially hidden consumer taxes embedded in the price of new homes.
They unfairly place the costs of growth-related infrastructure on new buyers, while existing homeowners are largely insulated.
Shifting more of these costs to the broader tax base, with predictable provincial support for municipalities, would distribute the burden more equitably and reduce sticker shock for buyers.
Land transfer taxes are another target. RESCON wants both provincial and municipal transfer taxes for new, vacant homes to be suspended for three years.
These taxes are regressive and add thousands of dollars to the cost of ownership without contributing to the housing supply.
In a market already under pressure from high interest rates and weakened consumer confidence, there is little reason to maintain these interest rates on new construction.
In addition to taxes and levies, action must also be taken to speed up and simplify the notoriously slow and fragmented planning and approval system.
Canada ranks second to last among OECD countries in development approval timelines, a statistic that should alarm any government serious about boosting supply.
We call for province-wide digitalisation of planning approvals, standardized designs and wider use of ‘as-of-right’ zoning to reduce delays that can stretch projects out by years.
Builders know how to build houses. What they have no control over is a glacial approval regime that increases costs without adding value.
We also need to look at the future of construction. We need stronger provincial support for remote and innovative construction methods, as well as incentives to accelerate PropTech and ConTech adoption.
RESCON members visited Germany last fall and saw how that country has embraced industrialized, factory-built construction and digital planning to dramatically shorten timelines and improve productivity.
Catching up is essential if we seriously want to increase the supply.
We have also called on the government to lift the ban on foreign buyers for new homes, especially high-rise projects.
In today’s market, these bans do more harm than good by suppressing demand for pre-construction units that are critical to financing major projects.
The failures of our housing policy did not happen overnight, nor can they be solved with a single budget. However, bold budget and policy action now can mitigate the potential consequences.
Ontario should step in where some municipalities are not getting the message, as has been done in Alberta, and use its authority over taxes, housing policy and infrastructure to change course.
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