Better Late than Never: Fee Relief On the Way for BC

Introduction

You don’t get respect for saying you are going to do something, only for doing it. For kids, adults, and certainly for the government, there is a natural tendency to score as many points as possible from saying you will do something meaningful, gauge reaction, then decide if that thing is worth doing.

That pattern was on full display in the June 18th joint housing announcement from the BC and Federal Governments, which introduced a new condo-purchasing program, and confirmed the long-awaited Development Cost Charges (DCC) reduction program.

While politicians, residents, and industry experts have loudly debated the merits of the condo-purchase program versus the forgone GST elimination approach, we are much more excited about the details of the DCC reduction program.

Why? Because more than ten times as much money has been allocated to it (~$3.2B for the DCC-linked infrastructure against about $300M for condo purchases), and it is of far more importance to the housing market in BC than the one-off condo purchases, even if it hasn’t been the program that caught the headlines.

In this edition of the Bird’s Eye View, we discuss what the DCC Reduction program might look like based on the Ontario model that’s already in the works and estimate when DCC reductions may start hitting BC.

Background

Regular readers will know that development charges are a subject we have returned to more than once. They have risen sharply over the past decade, they are embedded in the price of every new home, and, as we have discussed before, they tend to have an over-shifting effect, meaning that they add more to the final price of a home than the charge itself. 

In a market where costs are high, and price growth for the foreseeable future is likely to remain low, DCC reductions are one of very few available levers that have any potential to spur additional supply.

To that end, we have been following DCC reduction promises for some time. In April 2024, we wrote about a $5 billion federal fund that would require large municipalities to freeze their development charges for 3 years in order to access it (That program saw limited uptake and most of the money was re-allocated). In March 2025, we discussed the Liberals’ pre-election commitment to cut municipal development charges in half for multi-unit housing, and when the budget dropped in November 2025, we noted that Ottawa had tied $17.2 billion in infrastructure funding to development charge reform, and predicted that the pace of that reform would accelerate, particularly in British Columbia and Ontario.

Ontario was the first province to sign an agreement with the federal government to access its allocation of the Build Communities Strong Fund, in March 2026, with BC’s announcement landing on June 18th, 2026.

What will BC’s DCC reduction program look like?

Specific details are sparse at this point, but we expect that the Ontario system will set the baseline for what BC municipalities and developers can expect, so let’s look at some of the key features of that program:

1.   It does not cut development charges directly. Instead, it invites municipalities that already have a development charge bylaw in place to apply for infrastructure funding (water, wastewater, roads, transit), and asks them to commit, in exchange, to reducing their charges by between 30-50%, and to holding that reduction for at least 3 years.

2.   Ottawa and the Province cover up to 90% of project infrastructure costs, and the municipality contributes the remaining 10% or more.

3.   Applications are scored based on the size of the reduction the municipality commits to, the number of housing units the infrastructure would enable, and how much of the cost the municipality is prepared to carry itself.

The arrangement is fundamentally a trade, although the municipalities aren’t giving up much. The exchange is 3 years of partially forgone development charge revenue (and 10% of project costs) in return for an upfront payment to build the infrastructure those charges were meant to fund. The reality is that without spurring development, development charge revenue was likely to be exceptionally low over the next 3 years anyway, so this feels like a great trade for municipalities.

Is it possible that some municipalities may not apply for this funding? Yes, but the math is strong enough that we expect the vast majority will bite, and the prospect of being one of a handful of municipalities that doesn’t will doom it to being passed over as a development option compared to neighbouring alternatives.

It’s also interesting that Ontario’s version is competitive in nature, in that the municipalities that either pay more out of pocket or commit to larger reductions get scored higher, which could be relevant if the fund ends up being over-subscribed.

When Will the Reductions Actually Arrive?

Once again, Ontario’s timeline gives us something to work with. The Canada-Ontario partnership was announced on March 30, 2026, and applications opened to municipalities on June 1, roughly nine weeks later, and closed on June 19, giving municipalities eighteen days to apply. The Association of Municipalities of Ontario expects municipal agreements to be finalized as soon as this summer.

Our prediction: If British Columbia follows the same cadence as Ontario, then beginning from its June 18 announcement, applications would open around the third week of August, close in early September, and agreements would be finalized in the late fall. In that scenario, we expect that the earliest municipalities might enact reductions as early as late 2026, with the majority coming online in early 2027.

That said, Ontario compressed its schedule because it had a one-year tax holiday to synchronize with, and British Columbia, having turned down the GST-elimination route in favour of condo purchases, has no equivalent deadline forcing its hand. On that basis, we would not be surprised to see BC move more slowly than Ontario did, but BC still has plenty of incentive to move quickly.

With significant cost reductions visibly around the corner, builders are likely to hold off on projects until the lower charges are locked in, which is why BC has every incentive to move fast if it wants supply in the near term rather than a lull.

Conclusion

For some years we have written that development charges are among the least understood drivers of unaffordability in Canada, and that reducing them is one of the few levers with a real chance of restoring supply and spurring a market that is stuck in the mud.

Ottawa and the provinces have been promising that reduction in one form or another since April 2024, but the first meaningful step has now been taken to make the initiative a reality. Ontario has signed, put money on the table and closed its application window, and British Columbia has followed it into the same program.

This is one concrete step that the moment it lands will make marginal projects more viable, and viable projects attractive.