Updated CMHC modelling reveals which markets stand to gain most and what still needs to change
Reducing municipal development charges could increase the number of financially viable housing projects by as much as 14% in some Canadian cities, according to updated analysis by Canada Mortgage and Housing Corporation (CMHC).
The findings, prepared by CMHC chief economist Mathieu Laberge, draw on an expanded dataset now covering 40 municipalities, up from 30, and introduce a new forecasting tool called the Housing Development Viability Analyzer.
Where cuts make the biggest difference
CMHC's modelling shows the impact of fee reductions varies sharply by geography. Burnaby, British Columbia, stands to benefit most, with full elimination of development charges projected to increase financially viable projects by approximately 14%.
Toronto and Vancouver would see gains of roughly 10% under the same scenario.
Ottawa, where charges are already comparatively modest, would register a 3% improvement with complete elimination.
The gains from smaller reductions are limited. Trimming charges by 10% to 20% increases project viability by just 0.2% to 2% in the four cities modelled, suggesting that half-measures are unlikely to shift Canada's supply trajectory.
Reductions of 50% to 60% produce more meaningful results, roughly 5% more viable projects in both Toronto and Vancouver.
In Toronto, full elimination is estimated to generate between 10,000 and 16,250 additional housing units annually, representing between one-third and one-half of the city's estimated supply gap needed to restore 2019 affordability levels.
Read more: Development charge cuts won't fix Ontario housing on their own, industry experts say
A useful lever, but not a silver bullet
Metro Vancouver is an outlier in the updated dataset. Development charges in the region climbed roughly 10% between December 2025 and the most recent survey period, driven primarily by higher regional levies.
Metro Vancouver has since applied for provincial approval to roll back those charges to 2025 levels. Elsewhere, Alberta, Ontario, and Quebec reported minimal movement.
CMHC deputy chief economist Kevin Hughes previously told Canadian Mortgage Professional of the challenge in balancing incentives for private sector construction without undermining demand, a tension the latest analysis reinforces.
Read more: Will GTA municipalities follow Vaughan's lead on slashing development charges?
CMHC's first-quarter 2026 housing supply outlook also flagged regulatory drag as a persistent constraint on new construction across Canada's most expensive markets.
"Reducing development charges can improve housing project viability, especially in communities where they are highest," Laberge said.
"But meaningful gains in supply require substantial reductions, and they are only one part of the solution. Improving affordability will require a broader approach, including improved land-use regulation and increased scale and innovation to boost productivity in the construction industry."
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