FEDERAL-PROVINCIAL PARTNERSHIP ANNOUNCES DCC RELIEF AND INFRASTRUCTURE FUNDING

On June 18 in Vancouver, Prime Minister Mark Carney and Premier David Eby announced a new federal-provincial partnership that includes more than $5 billion in funding for housing-enabling infrastructure and measures intended to reduce the cost of delivering new housing in British Columbia.

Members will have already received an update from CHBA BC following the announcement. Through the federal government’s new Build Communities Strong Fund, the federal-provincial partnership includes:

• Nearly $1.6 billion over 10 years, matched by British Columbia for a total investment of up to $3.2 billion, to reduce development charges on eligible multi-unit housing projects by up to 50% in priority communities.
• Funding to support housing-enabling infrastructure, including water systems, wastewater systems, and local roads needed to accommodate growth.
• A one-time federal transfer of $284 million to British Columbia intended to reduce barriers to new housing construction.
• A new partnership between Build Canada Homes and BC Housing to convert more than 2,200 vacant condominium units into affordable housing.
• Long-term investments in public transit and community infrastructure throughout the province.

While we await additional details, I wanted to provide some context on what was announced and what it could mean for housing delivery in our region.

For HAVAN members, the most significant component of the announcement is the proposed reduction of Development Cost Charges. DCCs are a substantial upfront cost on housing projects across Metro Vancouver and as these costs continue to rise, more projects become difficult to advance, resulting in fewer homes getting to market.

Over the past several years, government fees and charges have increased substantially, pushing the cost of community growth onto new housing. While infrastructure requires funding, the cumulative impact of those costs has negatively affected the viability of many new housing projects. At the same time, municipalities have become increasingly reliant on development-related revenues because they have few other options to fund the infrastructure needed to support growth.

When Ontario and the federal government announced their $8.8 billion housing and infrastructure partnership in March, our industry voiced the need for the Province to initiate negotiations immediately to ensure a similar deal could be reached in British Columbia. In the months that followed, HAVAN joined UDI, CHBA BC, and other industry partners in calling on both levels of government to pursue a comparable agreement for British Columbia and address the growing impact of development charges on housing supply, project viability, and affordability.

While attending CHBA National’s Home Building Week in Quebec City in early May, HAVAN members and I heard firsthand from our Ontario counterparts about the positive impact the announcement had on homebuyer interest. However, it is important note that the uncertainty around implementation created challenges and frustration for builders.

Their experience serves as an important reminder that while policy announcements are valuable, timely implementation is equally critical. We have seen a similar situation unfold federally, where uncertainty surrounding the GST rebate for first-time home buyers resulted in purchasing delays as buyers and builders waited for the legislation to finally receive Royal Assent.

With the BC-Canada announcement, many important details remain unknown, including which municipalities will qualify as priority communities, how reductions will be administered, and when the program will take effect. The success of this initiative will ultimately depend on how it is implemented and whether it results in meaningful improvements to housing delivery across British Columbia.

While the announcement is encouraging and reflects concerns the industry has raised, DCCs represent only one component of the overall cost of housing delivery and, on their own, will not be the solution that turns this housing industry around.

Apart from this announcement, credit is due to municipalities that have taken proactive steps to reduce DCCs in their communities, recognizing the important role housing delivery plays in supporting growing communities. Rather than waiting for senior levels of government to act or fund reductions, some municipalities have taken steps to reduce their own fees in an effort to support housing supply.

While this funding provides welcome relief, it is a temporary measure. It also presents an opportunity for governments, municipalities, and industry to have a broader conversation about how growth-related infrastructure is funded. In a June 22 National Post editorial by Dave Wilkes, President and CEO of BILD, my counterpart in Toronto, he says the long-term question remains whether the cost of community growth should continue to fall primarily on new housing.

During this period of DCC relief, governments also have an opportunity to explore more sustainable approaches to funding the infrastructure needed to support growing communities. The question now is whether they will seize that opportunity.

HAVAN continues to work with CHBA BC and CHBA to advocate for all levels of government to work together tress the challenges of the housing industry including zoning restrictions, density limits, and NIMBYism.

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