In these extreme times of political division and policy gridlock, consensus is rare.
But refreshingly, when it comes to housing affordability, a recent Senate report and RESCON’s pre-budget submission appear to be strikingly aligned — and governments would be wise to take note.
The Standing Senate Committee on Banking, Commerce and the Economy report delivered a blunt assessment of Canada’s housing crisis, noting affordability will not improve unless governments dramatically increase supply.
Witnesses before the committee were clear that demand-side tinkering — such as expanding borrowing capacity — risks driving prices higher rather than solving the problem. Instead, they noted policy must focus on removing the cost and structural barriers that are preventing new homes from being built.
That diagnosis mirrors what Ontario’s homebuilders have been saying for years.
Despite Canada allocating a higher share of investment to housing than any other G7 country, homes remain out of reach for millions of Canadians. The reason is a policy environment that layers taxes, fees and regulatory costs onto new housing until projects simply no longer make financial sense.
The Senate report identifies those obstacles with unusual clarity and in doing so validates many of the core recommendations in RESCON’s 2026 Ontario pre-budget submission.
Consider sales taxes.
The Senate committee recommends the federal government provide a 100-per-cent GST/HST rebate on new homes priced below $1 million, with a phased-out rebate up to $1.5 million and annual indexation to inflation.
The logic is straightforward: the GST/HST is the single largest government charge on new housing and removing it would immediately lower prices while making stalled projects viable.
RESCON has advanced a complementary solution tailored to Ontario’s realities. While Ottawa’s proposed rebate would apply only to first-time buyers, RESCON is urging the province to expand its eight per cent portion of the HST rebate to all new home purchasers up to $1.3 million for a temporary period. Doing so, while continuing to push the federal government to match Ontario’s approach, could ultimately deliver a full 13 per cent sales tax rebate for all new buyers.
Both proposals recognize the same truth: if governments are serious about affordability, they must stop taxing new housing as if it were a luxury good.
The alignment becomes even clearer on development charges, one of the fastest-growing costs in new construction. The Senate report acknowledges what builders and buyers already know – that development charges have drifted far beyond their original intent and now force purchasers of new homes to pay for infrastructure that benefits entire communities.
CMHC officials told senators Ontario municipalities alone are sitting on more than $12 billion in unspent development charge reserves.
RESCON’s recommendation goes further, calling for decisive financial action in Ontario’s 2026 budget to return development charge rates to 2015 levels for a three-year period. The association is also advocating for a direct-to-buyer development charge model that would expose these costs transparently and prevent them from being taxed.
Both the Senate and RESCON point to the same conclusion: excessive development charges are suppressing supply, delaying projects and inflating prices and governments at all levels must share responsibility for funding growth-related infrastructure.
Productivity is another area of rare agreement.
The Senate report highlights Canada’s construction sector as one of the least digitalized in the economy and urges the adoption of modular and factory-built housing to reduce costs and speed delivery.
Other countries, senators noted, have successfully used government policy to stimulate demand for off-site construction for decades.
RESCON is calling for exactly that kind of co-ordinated approach. Our submission to the province urges Ontario and the federal government – including the new Build Canada Homes entity – to accelerate financial supports for off-site and innovative homebuilders through purchasing guarantees, shared-risk expansion models and favourable financing.
The goal is not experimentation for its own sake, but a fundamental shift in how homes are built in a province facing chronic labour shortages and escalating costs.
Even on politically sensitive issues such as the foreign buyers ban, the Senate report signals a willingness to reconsider policy outcomes rather than intentions. While the ban was introduced to curb speculation, RESCON argues it is actively harming the viability of new highrise projects in Ontario’s largest cities, where pre-sales are essential to securing financing.
Removing the ban for new construction, immediately rather than waiting until 2027, would help unlock projects that add supply without displacing Canadian buyers.
The Senate report and RESCON’s pre-budget submission form a coherent roadmap for action.
They focus on the fundamentals: lowering government-imposed costs, reforming municipal finance, boosting productivity and letting the private sector build.
The housing crisis did not emerge overnight and it will not be solved with half-measures or political slogans. But when federal senators, provincial homebuilders and housing agencies all arrive at the same conclusions, the path forward becomes hard to ignore.
Richard Lyall is president of the Residential Construction Council of Ontario (RESCON). He has represented the building industry in Ontario since 1991. Contact him at [email protected].
