Ontario Liberal Bonnie Crombie is trying to shed her queenly NIMBY past

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This month, the Ontario Liberals released a new homes plan that calls for significant tax breaks to encourage development and homeownership. The plan is a productive addition to the national housing debate, although many details remain unclear, and shows party leader Bonnie Crombie breaking from Trudeau’s legacy and driving the Liberal fire back toward the political center. But with Crombie opposing many of her newly announced housing policies just two years ago, it remains unclear whether she will actually stick to those commitments.

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Undoubtedly the Ontario Liberals most significant proposal is the elimination of development charges for most new homes. Introduced in 1989, the original purpose of development charges was to force developers to cover municipal infrastructure costs (ie water mains, sewage) associated with building new housing (also: “growth pays for growth”). Over time, however, municipalities have misused this tool to pay for unrelated services that should have been financed through fairer forms of taxation.

In practice, this has meant that new home buyers, who tend to be younger Canadians or immigrants, have been squeezed dry, so that established homeowners can benefit from slightly lower property taxes.

Between 1999 and 2024, inflation-adjusted development fees on two-bedroom apartments in Toronto rose from $2,265 to more than $80,000 — or more than 2,600 percent. Equivalent development charges on new single-family homes in Toronto almost doubled between 2018 and 2023, from approximately $73,000 to $137,846. While Prime Minister Doug Ford last year promised to phase out these taxes, he said withdrawn in the spring after facing setbacks from municipal leaders.

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The taxation of new homes has gotten so out of hand that it is now taking its toll for almost 36 per cent of the cost of a new home in Ontario. This has made ownership less affordable, as high costs are largely absorbed by buyers, and exacerbated the province’s already crippling housing shortage, as increased financial risks have made it harder for developers to launch new projects.

Eliminating development charges would not in itself solve the housing crisis, but it could immediately reduce the price of most new homes by around 10 per cent, providing much-needed relief to those priced out of the market. While this would leave municipalities with budget deficits, the Ontario Liberals argue that local governments could be compensated with new provincial funding that would be paid for by eliminating wasted spending elsewhere.

In a phone interview earlier this month, Bonnie noted that the total cost of her housing strategy would be, according to her team’s estimate, $3.6 billion. She cited Doug Ford’s recently announced rebate checks, which are expected to cost $3 billion, and his proposed $50 billion tunnel under the 401 freeway (which she described as “a fantasy tunnel to nowhere”) as evidence that there is room in the budget.

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In addition to lowering development taxes, the Liberals are proposing to eliminate the provincial land transfer tax for public housing developers, which would encourage more construction of affordable housing, as well as for first-time home buyers and seniors looking to downsize.

Crombie’s team has also proposed a “phased-in” rent control system, where new buildings would have uncontrolled rents for the first years of occupancy (the exact length of this grace period remains undetermined), and the party wants to hire more staff for the landlord-tenant board, and implement some procedural reforms, to clear the current backlog of cases there.

Market-minded housing experts across Canada have been calling for these kinds of reforms for years, and with good reason. Not only are they common sense, they balance empathy with economic realism. So far, both Liberals and Conservatives have praised the new housing plan, but skeptics should rightly ask: can we trust Crombie to actually see these promises through?

Crombie was mayor of Mississauga before becoming party leader, and during her decade-long tenure in that role she strongly opposed many of the housing policies she now champions (her hostility to new development even led some to call her “Queen NIMBY” ). When Ford proposed eliminating development taxes in 2022, for example, she was among his main critics and argued that “none of this is fair to our property taxpayers or our residents,” since cutting those fees amounted to “funding developer profits.”

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Crombie’s public criticism seemed instrumental by forcing the Ford government to water down its housing reforms before Ontario’s last election. At the time, housing advocates viewed her as obstructionist, but she has now taken on some of those critics as advisers.

While politicians are to be commended for adjusting their beliefs when presented with new evidence, it will take time to trust that Crombie’s wild face on housing is genuine and not just opportunistic – two years is a very short time for any politician to to change their political views, so completely.

If she is in government, would she have the courage to stand up to municipal opponents who might, as she did very recently, lobby against much-needed reforms? Right now it’s hard to say.

As a third party, it may also be easier for the Liberals to promise reforms they may never get the chance to implement.

Ontario’s housing market is being suffocated by red tape and the withering under vampire taxation. The province is building fewer homes now than it did in 1974, despite a doubling of the population. In comparison, housing construction per per capita twice as high in Alberta and 1.6 times higher in British Columbia. While the Ford government has implemented some pro-housing reforms – e.g pressing Toronto to allow more density around transit stations, and removal of minimum parking requirements for transit-adjacent development — it is clear that these reforms do not go far enough.

“The reality is that other provinces have figured it out. They’re building and they’re eating our lunch and our young, talented young people are going to BC, Alberta and even Quebec,” Crombie told me. “The price of a home in Toronto will buy you two homes in some cities in Alberta. So that’s why people are leaving our province.”

Many details of the Ontario Liberals’ housing strategy remain private, but even so, the Ford government should take notice. The province’s housing policy will become more competitive.

National Post

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