I keep hearing that Bill 23 was the government’s big fix for Ontario’s housing crisis. Cut developer fees, slash red tape, let builders build. Steve Clark stood in the legislature in November 2022 with a promise: 1.5 million homes by 2031. Development charges were supposedly part of the problem and Queen’s Park was going to sort it out.
I’ve been tracking what happened since, the numbers don’t tell the story anyone at Queen’s Park wants to hear.
Context: Development charges are fees municipalities collect from builders when new homes, offices, or commercial buildings go up. The money pays for growth-related infrastructure: water mains, sewers, roads, parks, libraries, fire stations. Ontario’s Development Charges Act sets the rules for what municipalities can charge and how. When the province cuts DCs, municipalities lose their main tool for keeping up with growth.
What Bill 23 actually cut
The More Homes Built Faster Act hit municipal revenue in ways that even the government’s own parliamentary assistant couldn’t fully explain during committee. Development charges for affordable and attainable housing? Gone entirely. Rental housing got a 25% discount. Non-profit and institutional developments got similar breaks, and the government phased in DCs for other housing types at 80% for the first three years.
That part at least had a logic to it. You could argue those discounts target the kinds of housing Ontario needs most.
But the bigger hit came from soft services. Bill 23 removed libraries, community centres, parks acquisition, and recreation facilities from the list of things municipalities could fund through development charges. Those aren’t extras. They’re the stuff which makes a subdivision an actual neighbourhood instead of houses parked next to a highway off-ramp.
Parkland dedication requirements went from 5% to 3%. DC increases got capped at rate of inflation, which sounds reasonable enough until you realize infrastructure costs were climbing at 8-12% annually through 2022 and 2023. At that pace you’re locking municipalities into collecting less every year in real terms.
Not a temporary squeeze. A structural one.
Who got stuck with the tab
AMO, which is the Association of Municipalities of Ontario and represents basically every municipality in province, put the total at $5 billion in lost revenue over ten years. I’d take that exact number with some salt, AMO has every reason to make it as large as possible. But even if you knock 20% off the estimate the problem doesn’t shrink enough to matter.
Estimated DC Revenue Losses (10-Year Projection)
Toronto put its annual hit at $230 million. Over a decade that’s roughly $2.3 billion, and that figure came from the city’s own budget committee, not from critics on the outside. Peel Region, which handles water and wastewater for Mississauga, Brampton, and Caledon, projected $2 billion. York Region ran its own numbers, came back with something in the range of $800 million.
The thing is infrastructure doesn’t get cheaper because Queen’s Park says so. Water mains still need to go in the ground. Roads still need paving. The only question was who pays, and if you follow what happened next the answer is existing homeowners.
Property taxes picked up the slack
Municipalities across Ontario started raising property taxes to cover the gap Bill 23 created. This is the part which should bother everyone regardless of political alignment. The whole pitch was making housing more affordable by cutting fees developers pay. But those fees didn’t vanish, they moved from new home prices to existing residents’ tax bills.
I looked at property tax increases from 2023 through 2025 and the pattern is hard to miss. Municipalities which were growing fastest (the ones that would have collected the most in DCs) had to choose between raising taxes or deferring capital projects.
Most did both.
Some froze road expansion. Some delayed water infrastructure upgrades they’d been planning for years. A few put community centres on indefinite hold. In Vaughan, council passed a special infrastructure levy tied directly to Bill 23 revenue losses. The quiet part said out loud, basically.
Less homes were being built than anyone promised, same infrastructure costs going out. Somebody was always going to pay for this.
Here’s where the theory falls apart
Bill 23 was supposed to get builders building. Cut their fees and they build more homes, that was the logic Steve Clark brought to the floor. Simple enough on a whiteboard.
Housing starts in Ontario fell in 2023. Fell again in 2024. By early 2025 the province was further from its 1.5 million homes target than the day Bill 23 passed.
Why? Because development charges weren’t the thing stopping builders from building. Interest rates were. Land costs were. Labour shortages were. Municipal approval timelines were (though Bill 23 didn’t do much to speed those up either, despite the name). What actually happened is the government cut one input cost, developers pocketed the savings, and the homes didn’t materialize.
A solution to a problem which wasn’t actually the problem. And the real costs landed on people who never saw them coming.
The partial walkback
I’ll give the government a little credit here. By 2024 enough municipalities were pushing back hard enough that the province started reversing some of Bill 23’s cuts. Bill 185, the Cutting Red Tape to Build More Homes Act (a name which deserves its own article, honestly) restored part of what had been stripped out.
Soft services came back. Partially. Municipalities got more room to use community benefit charges. And the Building Faster Fund, $1.2 billion over three years, was supposed to help close gap.
$1.2 billion against a $5 billion shortfall.
That’s 24 cents on the dollar, if you’re being generous with the math. And the DC phase-in schedule for new housing? Still in place. Caps on DC rate increases? Still in place. Reduced parkland dedication? Same deal.
Four years out
It’s May 2026 and Ontario’s housing starts remain below what province needs to hit its stated targets. Municipal infrastructure backlogs are growing in every fast-growth corridor from Durham to Waterloo. Property taxes went up across the board and nobody campaigned on that.
The government points at Building Faster Fund and calls it progress. And it is, some. But the structural gap between what growth costs and what municipalities can collect hasn’t closed.
My read on this: it wasn’t done in bad faith. I think it was policy that sounded good at a press conference and nobody worked through what happens three, four years later when the infrastructure bills come due. Developers got a break they didn’t pass along, homebuyers didn’t see lower prices, and existing residents got a tax increase which showed up on their property assessments without any warning or debate.
The fees didn’t disappear. They moved. And the people paying now are the ones who had no say in it.
Sources and verification: Municipal shortfall estimates drawn from AMO’s published analysis (2022-2023) and individual municipal budget documents. Toronto’s $230M annual figure cited in City of Toronto budget committee materials (2023). Peel Region’s $2B projection from its 2023 DC background study. York Region’s figure is an approximation from published council reports and should be checked against current budgets. Housing start declines confirmed via CMHC quarterly housing starts data for Ontario (2022-2025). Bill 23 and Bill 185 provisions confirmed via Ontario Legislative Assembly records at ola.org. Building Faster Fund ($1.2B/3yr) confirmed via Ontario Ministry of Municipal Affairs announcements. Some municipal-specific figures may have been updated since the sources cited here.
Track how your MPP voted on Bill 23, Bill 185, and other housing legislation at Ontario Pulse.