Ontario Construction News staff writer
A key City of Ottawa committee has approved a plan to slightly decrease the one-time fees developers pay to fund the city’s growth, a move municipal officials say balances the need for new infrastructure with the demand for housing affordability.
The Planning and Housing Committee voted Wednesday (March 4) to amend the Development Charges (DC) By-law and update the 2026 Development Charges Background Study. The decision, which still requires final approval from full council, would see residential development charges for single and semi-detached homes decrease by approximately one per cent inside the Greenbelt and two per cent in suburban areas.
The shift follows an update to the city’s Transportation Master Plan and new requirements under provincial legislation, including Bill 60, the Fighting Delays, Building Faster Act, 2025. The new rates reflect a revised schedule of infrastructure projects and a “new method” of calculating how much of a transportation project supports new growth versus how much benefits existing residents.
Geographic impact on homebuyers
The financial impact of the proposed changes varies significantly based on location, though the overall city-wide trend is a slight reduction in the “fee stack” for new builds:
- Inside the Greenbelt (IGB): Total charges for a single-detached home would drop from $56,399 to $55,982, a one per cent decrease. While area-specific road charges in this zone are set to surge by 104 per cent—climbing to $1,148—this is offset by a major 11 per cent reduction in city-wide public transit fees.
- Outside the Greenbelt (OGB): Suburban developers would see a two per cent drop, with total fees for a single-detached house falling from $63,745 to $62,568. This area benefits from decreases in both area-specific and city-wide road charges.
- Rural areas: Charges remain largely stable. Both serviced and unserviced rural developments are projected to see a nominal increase of only $130, or zero per cent.
- Non-residential development: Industrial and non-industrial rates are slated to decrease by an average of three per cent city-wide.
Legislative shifts and infrastructure funding
A major driver of the rate adjustment is the creation of a distinct “Land Acquisition” service category, a requirement under Bill 60. This adds a new fee of $1,344 per single-detached unit to the calculation. However, this new cost is countered by an 11 per cent reduction in public transit charges, stemming from the removal of the Transit Priority Network from the transit budget and its reassignment to Roads and Related Services.
Development charges are used to pay for essential services like water systems, public transit, and libraries. The city acknowledged that while these charges ensure “growth pays for growth,” they also represent a cost pressure “ultimately borne by property buyers and renters”.
The total gross 10-year capital program cost for these services is estimated at $12.3 billion. Of that, $8.0 billion is identified through grants and subsidies, which the city relies on heavily to fund large-scale Public Transit infrastructure.
The proposed changes are expected to come before City Council for a final vote on Wednesday, March 11.
