Canada’s homebuilding industry is urging governments to require full disclosure of taxes and development charges embedded in new home prices, arguing that hidden costs are significantly inflating housing affordability pressures and should be itemized for buyers upfront.Appearing before the Commons human resources committee, David Wilkes, CEO of the Building Industry and Land Development Association, said buyers are often unaware of how much of a home’s price is driven by government-imposed fees and levies.“The time has come to be transparent with new homebuyers on the level of government fees, taxes and charges on new homes,” Wilkes said, noting that such costs have historically added 25 to 30% to the final price of a new property.Blacklock's Reporter said he argued those charges should be clearly disclosed at the point of sale and again at closing, saying no such standardized requirement currently exists in Canada’s housing market.“We believe these costs should be declared and defined to the buyer when they are purchasing a new home, and declared both at the time of purchase and upon closing,” Wilkes said.Wilkes also warned that municipal fee increases have, in some cases, far outpaced inflation and significantly increased overall housing costs.“I can’t stress enough that the costs built in through government fees and taxes are one of the key drivers,” he said. “We’ve seen some municipalities increase those costs over the last several years by 1,000%, well beyond what inflation factors would be.”Data presented by the Canadian Home Builders’ Association in a 2024 municipal benchmarking study suggests so-called infrastructure-related charges vary widely across the country but can reach substantial levels in major cities. The study estimated average fees per home at $195,300 in Toronto, followed by Saskatoon at $112,200, Vancouver at $104,300, Calgary at $93,000, Ottawa at $78,000, Edmonton at $36,000, Halifax at $30,500, Regina at $29,500, Winnipeg at $15,200, St. John’s at $15,100, Charlottetown at $9,500, and Moncton at $8,700..Conservative MP Scott Aitchison (Parry Sound–Muskoka, Ont.) pressed industry representatives on what they see as the primary obstacle to housing development.“What remains the biggest barrier to getting homes started?” Aitchison asked.“Overall cost,” Wilkes replied.Wilkes said the industry sees growing momentum for reforms aimed at reducing government-driven costs in new home construction, including changes to sales taxes, development charges and approval timelines.“We’re just at the cusp of seeing governments recognize the 25 and 30% they add to the cost of a new home has to be reduced, whether that’s through harmonized sales tax adjustments, whether that’s through development charge adjustments or whether that’s through expediting approvals,” he said.Housing affordability pressures were also raised in relation to homelessness and rental demand. Tim Richter, CEO of the Canadian Alliance to End Homelessness, warned that rising home prices are creating knock-on effects throughout the housing system..“If the ownership market isn’t functioning well, more people are going to rely on the rental housing system which in fact creates effectively a housing traffic jam in the middle of the housing system,” Richter said. “We have to think about, yes, the supply, and what housing for who?”Aitchison asked whether reducing taxes and fees could ease pressure on broader housing demand, including non-market housing.“If 30% of market housing cost wasn’t government taxes, charges and fees, would that relieve some of the burden on the need for more social and supportive housing?” he said.“Potentially I think those taxes and fees and costs of delay apply every bit as much to community housing, social housing and supportive housing as it does to anybody else,” Richter replied.
