Ontario nixes cities' ask to allow more of them to get housing infrastructure money

Ontario's housing minister has shot down a request from big city mayors for a change in funding criteria that would help more of them qualify for money to build infrastructure necessary for new homes.

The province hosted what it billed as its first annual housing forum Monday, bringing together a wide range of people and organizations to get ideas on how to spur new housing.

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Attendees included municipalities, developers, city planners, condominium, non-profit and rental organizations, post-secondary institutions, architects, long-term care homes, realtors, tech companies with planning tools, and even a psychotherapist, who a government spokesperson said was invited by a landlords' group.

Municipal Affairs and Housing Minister Paul Calandra kicked off the forum saying he wanted to hear suggestions on steps that will get more housing built more quickly.

"We want to build 1.5 million homes and I know it's a very aggressive ask of all of you, and I know we are asking a lot in communities across the province of Ontario," he said.

"I know there will be disagreements on how we get there, but overwhelmingly today I hope that we will look at what we have to do in order to get that done."

The Progressive Conservative government has pledged to build 1.5 million homes within 10 years, by 2031, but at no point in the next few years does the province expect to even hit 100,000 new homes per year according to current projections.

The province has assigned housing targets to 50 municipalities and has tied money for housing-enabling infrastructure -- such as roads and water lines, which are critical to building new homes -- to meeting those targets.

Cities and towns that meet at least 80 per cent of their number annually will get a slice of the three-year, $1.2-billion Building Faster Fund, but with one month left in the year, just nine of the 50 municipalities have met or exceeded their target for housing starts and another five are listed as being "on track."

The Ontario Big City Mayors group asked Calandra last month to base their eligibility for the fund on how many building permits municipalities issue, rather than on the number of housing starts.

Municipalities can issue permits, but developers may not start construction because of high interest rates, supply-chain issues or labour shortages, the big city mayors say.

When asked Monday if he was still considering that request, Calandra said, "No."

"We're going to make sure that all of the Building Faster Fund money is used," he said. "Look, there's more time left in the year. That's what the housing forum today is about."

Burlington Mayor Marianne Meed Ward, the chair of the big city mayors' group, said Calandra's decision is "short sighted" and means many municipalities will lose out on 2023 funding.

"Without the funding we can't build the infrastructure that's needed to build the housing," she said. "If we can't build the housing, we can't get the funding. If we can't get the funding, we can't build the infrastructure ... It's a loop."

Calandra has promised a "use it or lose it" policy that would force developers to act on permits, and Meed Ward said that has the potential to turn the numbers around, but there is only one month left in this year.

"We don't typically see a lot of foundations being poured in December," she said. "This is a lost year, unfortunately, because of these policies and that will really negatively impact our shared goal of getting housing built."

Calandra also said he is set to introduce another housing bill early in the new year.

The province recently announced it is scrapping its portion of the harmonized sales tax on eligible purpose-built rental housing construction after the federal government did the same. Calandra said it is already having an impact.

"We are seeing almost immediately the sector come forward and get shovels in the ground," he told the housing forum.

"But obviously there are still a number of headwinds that we're facing across the province, (such as) high interest rates."

A number of housing forum attendees work with modular housing, and Calandra also announced Monday that the government is developing a modular housing framework. It's an area in which Premier Doug Ford has expressed a keen interest.

This report by The Canadian Press was first published Nov. 27, 2023.