Hamilton City Council is on the verge of effectively freezing development charges (DCs) for the coming year. Council’s Audit, Finance and Administration Committee voted 7-2 last Thursday to add a four per cent temporary DC exemption to the already existing 20 per cent temporary exemption.
The effect of this is to permit the City to continue inflation-indexing its DC charges while not passing on the cost of the 2026 inflation increase to developers during the ongoing downturn in the housing market.
The budget-line cost of the exemption is approximately $5.52-million, an amount the City’s General Manager of Finance and Corporate Services Mike Zegarac told councillors would need to be accounted for. If charged to the tax levy, it will result in a 0.21 per cent property tax increase and a 0.79 per cent water and wastewater rate increase, he stated.
The AF&A motion represented a middle-ground position between suspension of DC inflation indexing that the development industry sought, and the City staff recommendation to apply the inflationary increase beginning on July 1, 2026.
GM Zegarac explained that mechanically maintaining the index rate while discounting the final charge ensures the municipality will capture the compounded value once the temporary relief expires.
“One of the benefits … is that we do not forego that future benefit—compounding benefit—of the indexing. We provide temporary relief in the current market, but in future years, we would benefit from that compounding.”
Councillors are hoping the decision to forego increased DC revenues will qualify the City of Hamilton for a share of the Canada-Ontario Partnership to Build funding program, an initiative promising municipalities a share of an $8.8 billion funding pool if they reduce their DCs.
Ward 9 Councillor Brad Clark stated that councillors and senior staff will work to find a non-tax levy budgeting method to offset the planned DC waiver.
“If that’s not the housing bubble bursting and the housing market crashing, I’m not sure what it is,” Clark said. “The layoffs are not just the folks who are building the housing, building the condos; the layoffs are for everyone that is supplying all of the supplies to build those houses.”
Dissenting councillors criticized the move as a taxpayer-funded subsidy for the development industry. Ward 13 Councillor Alex Wilson noted the estimated $5.52 million represents approximately 10 per cent of the total net levy increase passed in the 2026 budget.
“If we were to ask Hamiltonians, ‘Hey, the economy is crashing. Your local city government is going to bail out an industry,’ developers would not be anyone’s first choice,” Wilson said.
“If layoffs are happening in a sector that’s made profit upon profit upon profit, and that profit’s not being spread across everyone in the workforce, people on the front lines building homes are not making the same bank that the people owning these development companies are,” Wilson said. “But the City is being asked to put in our equity, our risk, when things are going difficult.”
Ward 2 Councillor Cameron Kroetsch also voted against the measure, pointing to a lack of financial accountability from developers benefiting from city subsidies and arguing that previous municipal discounts did not result in new construction.
“I don’t understand why a government is just taking for-profit businesses’ word for anything in that way,” Kroetsch said. “If we’re subsidizing people, we should demand financial accountability.”
West End Home Builders Association Chair Dani Gabriel, Director of Operations for Marz Homes, delegated to committee and told councillors that DC fee exemptions are required because “the math does not work” in the current economic environment.
“The cost of building a home today exceeds what buyers are able to pay. Our members have delayed projects and reduced staff. Builders across this region are laying people off, and that doesn’t just affect us; it leaves trades and supply partners without work.
Ward 8 Councillor Rob Cooper said the City can afford to provide the waivers, noting it has over $600-million sitting in DC reserves.
“We talk about almost this disconnect between developers and getting people in homes,” Cooper said. “There’s only one place these fees go, and that goes to homeowners. There’s not a magic pot of gold under a rainbow that developers go and they pay for this. They’re not subsidizing housing.”
Hamilton’s last reported DC reserve balance was $548.67-million at the end of 2023. The City has not provided any balance updates since that time.
The AF&A plan needs to be ratified by the full City Council during its May 13 ratification meeting. If all 16 members of Council are present, only two more votes are required to ratify.
How Councillors Voted
In Favour: Maureen Wilson (Ward 1), Esther Pauls (Ward 7), Rob Cooper (Ward 8), Brad Clark (Ward 9), Jeff Beattie (Ward 10), Mark Tadeson (Ward 11), Mike Spadafora (Ward 14).
Opposed: Cameron Kroetsch (Ward 2), Alex Wilson (Ward 13)
Absent: Tammy Hwang (Ward 4)
Production Details
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Published: May 11, 2026
Last updated: May 11, 2026
Author: Joey Coleman
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