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Could Cutting Taxes and Development Charges Make Canadian Homes More Affordable?

September 21, 2026

Poilievre says taxes, fees and red tape are driving up home prices. Josh Tagg examines what cutting those costs could mean for buyers.
Housing costs in Canada

Conservative Leader Pierre Poilievre recently joined mortgage broker Ron Butler on the Angry Mortgage Podcast for a wide-ranging conversation about housing affordability and homeownership in Canada.

Their central argument was straightforward: taxes, development charges, permitting delays and other government-imposed costs make homes more expensive to build. Reduce those costs, they argued, and builders could produce more homes at prices Canadians can afford.

It is an appealing idea. Unfortunately, Canadian housing has never met a simple solution it couldn’t complicate.

Quick answer: Cutting taxes and development charges would lower what it costs to build a home, but it would not automatically lower what a buyer pays. Builders price to market conditions, so if development charges drop by $30,000, the selling price does not reliably drop by $30,000 — in a tight market some of the saving stays with the developer or landowner. The proposals discussed (removing GST/HST on new homes under $1.3 million, faster permits, more land, lower municipal development charges, a capital-gains holiday on proceeds reinvested in housing) are political proposals, not current mortgage rules or programs. And even at a lower price, buyers still have to clear income, debt, credit, down payment and the qualifying rate.

What housing proposals are being discussed?

Four people around a boardroom table covered with a subdivision site plan and floor plans, a laptop and notebooks, with framed housing renderings on the wall.
Every line on those drawings has a cost attached — land, servicing, approvals and development charges are priced in long before a buyer sees a listing.

During the interview, Poilievre proposed removing GST and HST from newly built homes priced below $1.3 million – something already being done by the federal government. He also called for faster permits, more land for construction and lower municipal development charges.

He suggested tying federal infrastructure funding to reductions in municipal development charges. He also proposed a capital-gains tax holiday when proceeds are reinvested in housing construction.

These are political proposals, not current mortgage rules or programs. Whether they are eventually introduced, passed or implemented—and what the final details might look like—remains uncertain.

Still, they raise a useful question: how much of a new home’s price comes from something other than the house itself?

Who actually pays a new home’s construction costs?

Before a builder can sell a home, it must purchase land, obtain approvals, install services, pay development charges, buy materials, hire workers, finance the project and account for taxes.

Municipal development charges help pay for infrastructure needed by growing communities, including roads, water systems and other public services. These costs serve a purpose, but they also become part of the project’s budget. That expense is generally reflected in the price buyers pay.

Long approval timelines can add costs too. A builder may carry the land and financing for years before construction begins. Delays can also reduce the number of homes reaching the market.

Reducing those expenses could make some projects more financially viable and encourage additional construction. More supply would be welcome, particularly in communities where population growth continues to outpace new housing.

Would buyers receive all the savings?

Overhead view of a new cul-de-sac subdivision: houses with fresh dark roofs, one still in bare plywood, poured foundations and bare dirt lots beside an established treed neighbourhood.
Supply arrives one lot at a time. Whether a cost cut reaches the buyer depends on how many of these are competing for the same purchaser.

If taxes or development charges fall by $30,000, it does not automatically mean the selling price drops by $30,000. Builders generally price homes according to market conditions, competition, demand and what buyers can afford.

In a slower market with plenty of available homes, builders may pass along more of the savings to attract buyers. In a market with limited supply and intense demand, some of the benefit may remain with the developer or landowner.

That does not make cost reductions pointless. Lower costs can encourage more construction and increase competition over time. We should simply be cautious about promising that every dollar removed from a project will immediately appear in a buyer’s pocket.

Would lower prices fix mortgage qualification?

Even if construction costs come down, many buyers would still face another obstacle: qualifying for the mortgage.

Lenders look at income, existing debts, credit, the down payment and the qualifying interest rate. A household may be able to manage a mortgage payment but still fall outside the required debt-service ratios.

A modest price reduction could make the difference for some buyers. For others, particularly in expensive markets, the gap between their purchasing power and local home prices may remain substantial.

Housing affordability therefore needs more than one lever. Canada needs enough homes, reasonable construction costs, appropriate infrastructure and a mortgage system that protects borrowers without unnecessarily shutting qualified buyers out.

Does Canada need rental housing or ownership housing?

A newly built separate basement-suite entrance: a grey door at the bottom of concrete steps, temporary wood handrails, Tyvek-wrapped framing above and a mitre saw on the dirt yard.
Not all new rental supply is a tower. A separate-entrance suite adds a rental unit and, on the right file, rental income a lender will count toward qualifying.

The interview also criticized the federal government’s emphasis on rental construction. I understand why this resonates with people who want to own a home and feel that goal is drifting farther away.

However, rental and ownership housing should not be treated as opponents. Canada needs both. More rental supply can reduce competition for existing units and give households a stable place to live while they prepare to buy. At the same time, a healthy housing system should offer realistic paths into ownership for people who want one.

The important question is whether Canada is creating enough of each type of housing in the communities where people need it.

What can buyers actually do in today’s market?

The debate over taxes, government programs and development charges will continue. Any policy that produces more homes at a lower cost deserves serious examination, but buyers cannot build a plan around a proposal that may or may not become law.

What you can do is learn what you qualify for today, examine the programs currently available and compare new construction with resale homes. Sometimes the numbers are closer than expected. Sometimes they reveal that another year of saving or debt reduction would create a much stronger position.

I’m Josh Tagg, an Alberta mortgage broker with Mortgages for Less. If you are thinking about buying your first home, I can help you understand your current options and develop a realistic plan—without requiring you to predict what politicians will do next. Contact me to get started.

How an Alberta mortgage broker helps while housing policy is still a debate

You can’t buy a house with a proposal. Here’s what we work with instead:

  • We tell you what you qualify for today — income, debts, credit, down payment and the qualifying rate, not a hoped-for price cut.
  • We check the programs that actually exist right now, including the current federal GST rebate on qualifying new builds.
  • We run new construction against resale side by side, because the numbers are often closer than people expect.
  • We show you what another year of saving or debt reduction would change, so waiting is a decision rather than a default.
  • We look at whether a suite or rental income could help the file qualify.
  • We work with buyers across Calgary, Edmonton and all of Alberta.

Find out what you qualify for today

Politicians will keep debating. Let’s build your plan on the rules and rates that exist right now.

Apply Online → Book a Discovery Call → Serving Calgary, Edmonton & all of Alberta · Mortgages for Less with INDI Mortgage

Taxes, development charges and home prices: common questions

Would cutting taxes and development charges make Canadian homes more affordable?
It would lower what it costs to build a home, which could make some projects more financially viable and encourage additional construction. But it would not automatically lower the price a buyer pays. Builders generally price homes according to market conditions, competition, demand and what buyers can afford.
If development charges drop by $30,000, does the price drop by $30,000?
No. In a slower market with plenty of available homes, builders may pass along more of the savings to attract buyers. In a market with limited supply and intense demand, some of the benefit may remain with the developer or landowner.
What housing changes were proposed in the interview?
Removing GST and HST from newly built homes priced below $1.3 million, faster permits, more land for construction, lower municipal development charges, tying federal infrastructure funding to reductions in those charges, and a capital-gains tax holiday when proceeds are reinvested in housing construction.
Are these proposals current mortgage rules I can use?
No. These are political proposals, not current mortgage rules or programs. Whether they are eventually introduced, passed or implemented, and what the final details might look like, remains uncertain. One piece is already in place, though: the federal government has introduced a GST rebate on qualifying new builds.
What goes into the price of a new home besides the house?
Before a builder can sell a home, it must purchase land, obtain approvals, install services, pay development charges, buy materials, hire workers, finance the project and account for taxes. Municipal development charges help pay for roads, water systems and other public services, and that expense is generally reflected in the price buyers pay. Long approval timelines add carrying costs as well.
Would a lower purchase price fix mortgage qualification?
Not on its own. Lenders look at income, existing debts, credit, the down payment and the qualifying interest rate. A household may be able to manage a mortgage payment but still fall outside the required debt-service ratios. A modest price reduction could make the difference for some buyers, but in expensive markets the gap can remain substantial.
Does building more rentals come at the expense of ownership?
Rental and ownership housing should not be treated as opponents. More rental supply can reduce competition for existing units and give households a stable place to live while they prepare to buy. The important question is whether Canada is creating enough of each type of housing in the communities where people need it.

This article is general information for Canadian and Alberta homebuyers, not financial, mortgage, tax or legal advice. It discusses political proposals that are not law and may never become law; current rules, programs, rates and lender policies change. Any mortgage is subject to lender approval. Please speak with a licensed mortgage professional about your specific situation. Mortgages for Less with INDI Mortgage.

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