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Economic Viewpoint

The Devil’s in the Development Charges

How “Growth Pays for Growth” Is Shaping Housing
Supply and Affordability

June 18, 2026
Kari Norman
Senior Economist
  • Development charges (DCs)—municipal fees levied on new construction to help fund growth-related infrastructure such as roads, transit and water systems—have increased much more rapidly than underlying costs. In part, this divergence reflects policy design rather than infrastructure requirements. Across Ontario municipalities, DCs have risen by roughly 500% over two decades—far outpacing underlying drivers such as construction costs, wages and inflation.
  • High and rising DCs are constraining housing supply and putting upward pressure on prices. Substantial upfront charges can render some proposed projects unviable, discourage higher-density development and are largely passed on to homebuyers.
  • The current model concentrates costs on new buyers and creates financing inefficiencies. DCs are embedded in home prices and therefore financed through mortgages, which typically have amortization periods of about 25 years. However, DC-funded infrastructure projects typically have much longer service lives and are eligible for lower-cost public financing.
  • Alternative financing models for growth-related infrastructure exist but involve trade-offs. Options such as municipal or other government borrowing, utility-style financing and greater reliance on transfers can shift costs over time and across users but may increase debt, user fees or property taxes.

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The Devil’s in the Development Charges (PDF, 407 KB)
NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.