Ottawa Construction News staff writer
Ottawa Mayor Mark Sutcliffe addressed the Greater Ottawa Home Builder’s Association (GOHBA) last Thursday (Jan. 17), outlining the city’s commitment to increasing the number of homes built in Ottawa.
The mayor acknowledged the concerns of the association’s members regarding the rising cost of Development Charges (DCs) and their impact on housing affordability, but indicated that he doesn’t see any way they could be reduced significantly.
In his speech to the gathering of about 220 members and guests, Mayor Sutcliffe highlighted the complexity of the housing market and the various factors affecting affordability, including DCs. He emphasized the need for collaboration among all stakeholders, including the city, builders, and other levels of government, to find solutions.
The mayor acknowledged the challenges posed by DCs but cautioned against freezing or lowering them. He explained that DCs are a crucial source of funding for the city’s infrastructure projects, such as roads, sewers, and transit. Reducing DCs would require finding alternative revenue sources, potentially through property tax increases, which the mayor is committed to avoiding.
“We face a lot of challenges, and one of our biggest is our financial situation,” he told the audience. “I wish we had the resources and the legislative authorities that the other levels of government have that would make things a lot easier, a lot easier.
“So here’s a little bit of math for you. In 2024 a typical household in Ottawa paid about $4,300 in property taxes. But a typical family living in that household, a typical family with two income earners, paid about $22,000 in income taxes and another $11,000 in sales taxes. So that’s more than $33,000 for the other two levels of government and less than $4,500 for the municipal government and income taxes and sales taxes go up every year as the economy grows, but our property taxes don’t go up unless we raise them manually.
“So there’s a lot of attention every year on our annual tax increases, obviously, but not so much attention on the annual revenue increases for other levels of government that just collect more and more money as the economy grows.
“And by the way, the federal and provincial governments get to run deficits, as you probably heard and we don’t the other levels of government can make moves like cutting the HST temporarily, or sending every resident a $200 check because they have much higher revenues and they have the ability to run deficits, we don’t have that flexibility.
“So here’s the unfortunate reality, if we were to cut Development Charges drastically, could we just have to increase property taxes, and I don’t want to have big property tax increases at a time when residents and business owners like you are already facing significant inflationary pressures,” Sutcliffe said.
Instead, Mayor Sutcliffe proposed working with other levels of government to secure more infrastructure funding, reducing the reliance on DCs. He urged GOHBA members to advocate for this approach with their local MPs and MPPs.
In his speech, the mayor also acknowledged the broader economic context impacting the housing market, including potential headwinds such as a possible federal election and uncertainty surrounding the future of the federal public service, as well as the potential adverse economic impact of high tariffs imposed by the new Trump administration in the US.
He emphasized the importance of a strong economy to support the housing market and the need for the city to work closely with the technology sector and other key employers to sustain economic growth.
Sutcliffe outlined several initiatives to support the housing sector. He announced the formation of a task force to explore innovative solutions to streamline the development approval process. The task force will examine ideas such as deferring DCs, incentivizing transit-oriented development, and leveraging technology to expedite approvals.
The mayor also highlighted the city’s efforts to revitalize the downtown core, which has been significantly impacted by the pandemic and the shift to remote work. He stressed the importance of collaboration among all stakeholders to develop a plan to revitalize the downtown area, including attracting new residents, converting office buildings to residential units, and creating new attractions to bring people back to the city center.
Sutcliffe concluded his speech by reiterating the city’s commitment to working with builders and other stakeholders to address the challenges of housing affordability. He expressed confidence that by aligning interests and focusing on shared goals, progress can be made toward building more homes and ensuring a vibrant and affordable Ottawa for all residents.