Alberta's Housing Surge Contrasts with Ontario's Construction Slump
In a striking comparison of provincial housing markets, Alberta constructed almost as many residential units as Ontario in 2025, despite having a population that is less than one-third the size. According to the latest figures, there were 259,028 housing starts across Canada last year, with Ontario accounting for 65,376 units and Alberta close behind at 54,858.
Diverging Trends in Home Building
The data highlights a significant shift in construction activity between the two provinces over the past five years. Alberta has experienced a remarkable 71% increase in housing starts during this period, while Ontario has witnessed a decline of more than one-third. This divergence is not merely a statistical anomaly but reflects deeper structural issues affecting affordability and development.
Home prices in Alberta remain substantially lower, with the provincial average sitting just above $500,000, compared to over $800,000 in Ontario. A detailed city-by-city analysis from Royal LePage reveals even starker contrasts: Toronto's average home price reached $1,084,300 in the last quarter of 2025, while Edmonton stood at $466,800 and Calgary at $681,700.
The Development Charge Disparity
A critical factor driving this construction gap is the substantial difference in government-imposed fees and development charges. In Ontario, municipalities levy what many describe as astronomical development charges that simply do not exist in Alberta. For instance, the development charge for a single-family home in Toronto has skyrocketed from $24,298 just over a decade ago to $143,409 today.
A recent Senate report indicates that when all various fees, taxes, and development charges are factored in, home builders in Ontario can be paying government and government agencies as much as $200,000 before construction even begins. This financial burden has created what industry observers call an unsustainable environment for housing development.
Political Responses and Municipal Resistance
Ontario Premier Doug Ford has repeatedly called for municipalities to lower development charges, stating recently that "there has to be a time that the municipalities start contributing, lowering DCs." However, his attempts to reform the system have met with significant resistance. Ford's plan to abolish development charges for affordable housing was met with a revolt among municipal leaders.
While some municipalities have taken steps to address the issue—Vaughan slashed their charges by nearly 50% in November 2024—others have moved in the opposite direction, with Toronto increasing their fees just months later. This inconsistency creates additional uncertainty for developers and contributes to the overall slowdown in housing construction.
Alberta's More Manageable Approach
Meanwhile in Alberta, which is experiencing a slight slowdown in new home sales, the development-charge landscape presents a stark contrast. Cities like Calgary and Edmonton charge fees on a per-hectare basis rather than the per-door approach used in Ontario. Depending on lot size, development charges in Alberta typically range from $25,000 to $50,000—far below the excessive fees charged in the Toronto area.
Alberta also benefits from several economic advantages that Ontario lacks. The province boasts higher incomes and a faster-growing economy, with a GDP per capita of $71,000 leading the country compared to Ontario's fourth-place position at $55,000 per capita. The combination of higher earnings and lower home prices naturally fosters more robust housing sales and construction activity.
The Broader Implications for Housing Affordability
The current situation raises serious concerns about housing affordability and market sustainability. Many Ontario municipalities have increasingly turned to development charges to fund their budgets, finding this approach politically more palatable than raising property taxes. However, this strategy comes at the cost of making home buying less affordable and slowing construction precisely when increased housing supply is most needed.
As the housing crisis continues to affect communities across Canada, the contrasting approaches of Alberta and Ontario provide valuable insights into how government policies and fee structures can significantly impact construction activity, affordability, and ultimately, the ability of Canadians to find suitable housing.
