Why Guelph has to grow.

Who sets the number

Ontario's cities exist under provincial law. Section 92(8) of the Constitution lets provinces pass laws governing municipalities. In 2021 the Supreme Court of Canada confirmed Ontario could cut the size of Toronto's council without asking the City first. (Supreme Court of Canada, Toronto v. Ontario, case in brief)

That includes how much a city has to grow. The Province's growth plan told Guelph how many people to plan for. The City's Official Plan now plans for 208,000 people by 2051. (Province of Ontario, Official Plan Amendment 80 decision)

Then on October 25, 2022, the day Bill 23 was introduced, the housing minister wrote to Guelph. The letter asked the City to pledge to help build 18,000 new homes by 2031.

City staff were blunt about it. Their report said 18,000 was 6,100 more homes than Guelph had planned for by 2031. It meant more than 2,000 homes a year. The average since 2008 was 981. Staff said Guelph had never seen that pace. The CAO told council, “We don't have the financial or human resources to achieve that target.” (City staff report on the housing pledge, pp. 1, 2 and 4; GuelphToday, March 1, 2023)

Council signed it 13 to 0 on February 28, 2023. Staff had said cities that didn't pledge could miss out on provincial money for infrastructure. Council added a condition, moved by Councillor Downer, that meeting the target “is subject to Provincial action.” It also voted 12 to 1 to ask the Province to freeze population targets for five years. (Council minutes, February 28, 2023, item 9.4)

What actually got built

Guelph came close in 2023. The gap has grown every year since. In 2025 Guelph started 531 homes, 29.5 per cent of the target and the fewest since 2011. Staff pointed to higher construction costs, labour and supply shortages and the trade fight with the U.S. From January to August this year, CMHC counted 82 housing starts in Guelph. (City growth report, July 2026; CMHC, Guelph)

The Province counts more than housing starts. It adds basement and garden suites, long-term care beds and, since 2024, student beds and retirement home suites. By that count Guelph qualified for the Province's Building Faster Fund in 2023 and 2024. By the Province's own numbers, Guelph had 2,897 of its 18,000 homes from 2022 through 2024. To qualify for 2025 it needed 1,440 starts. That's about 100 more than Guelph's best year in two decades. (Province of Ontario housing progress data, 2023 and 2024; City growth report)

How development charges work

Development charges are what builders pay the City toward the new roads, pipes, parks and community centres their projects need. Under section 35 of the Development Charges Act, that money can only be spent on growth-related capital. Section 5 makes the City take out any share of a project that benefits the homes already here. Property taxes, water rates and grants pay that share. The City's 2023 development charges study does this for every service. For fire services it took $2.8 million off as a benefit to the existing community. (Development Charges Act, 1997, sections 5(1) and 35; 2023 Development Charges Background Study)

So development charges never pay to maintain the roads and pipes we already have. The law doesn't allow it.

The money that never came in

The City builds a lot of growth infrastructure before the homes arrive, because the pipes have to be in the ground first. It pays for that with debt and with money borrowed from its other reserve funds. The charges pay it back as homes get built. When building slows, the paying back slows too. (City 2025 year-end reserves and debt report)

In 2024 and 2025 the City planned on about $54 million a year in development charges. It collected about $12 million. Here's what that has done, from the City's own reports.

• The reserve went into the red. The development charge reserve funds went from $38.7 million in the black at the end of 2024 to $12.3 million in the red at the end of 2025. (2025 year-end report)
• The debt is already there. The City owes $86.8 million on growth projects it plans to repay from future development charges, including $56.8 million for the South End Community Centre. (2025 year-end report, Table 7)
• Projects are waiting. Tara Baker, the CAO, told council in July that the City has deferred significant capital work. Baker said that if other levels of government don't step in, lower development charge revenue will likely hit taxes. (The Trillium, July 17, 2026)
• The money now comes later. A new provincial law, Bill 17, now lets most homebuilders pay the charges at move-in instead of at building permit. Staff estimate that delays $10 million to $20 million a year. (2025 year-end report)
• The tax roll grew less. New homes also add to the property tax roll. The 2026 budget counted on about $4.0 million from that. By October 2025 it was tracking at about $2.2 million. Staff said the shortfall will affect the tax levy in 2027 and later. (2026 budget, long-term financial strategies)

If the growth doesn't come, the people already here carry that bill.

What Bill 23 costs taxpayers

Bill 23 also exempted some homes from development charges and discounted others. As City staff put it, exemptions “do not lower the underlying cost of the capital works.” They “simply create a gap in the funding available to pay for them.” The City fills that gap from property taxes and water rates. (2025 year-end report, p. 11)

After Bill 23 passed, the City's development charges study projected it would cost Guelph $227 million over 10 years. The real numbers so far are much smaller. Far less got built, and in 2024 the Province's Bill 185 reversed part of Bill 23. The Bill 23 items the City can trace came to about $8 million from 2023 to 2025. The biggest exemption every year is for extra units in houses, like basement and garden suites. Part of that comes from Bill 23, but the City doesn't track how much. (GuelphToday, July 11, 2023; year-end reports)

In May 2026 staff concluded that covering these exemptions from property taxes is a policy choice, not a legal requirement. That followed a reply from the Province's deputy housing minister to London's mayor. Staff still recommended paying them, because the roads and pipes cost the same either way. Council's committee agreed 12 to 0. The City's 2026 budget says the property tax money set aside for these exemptions this year is more than it's spending on service improvements and its renewable energy goal combined. (2025 year-end report, pp. 11 and 12; council record, Committee of the Whole, May 5, 2026; 2026 budget, long-term financial strategies)

Where the Province's money went

(2024 year-end capital report; City release, September 25, 2026; City release, December 15, 2025)

That's about $8.4 million, close to the $8 million in Bill 23 items the City can trace. None of it went to cover the exemptions.

The Province also promised to make cities whole for Bill 23, as long as they hit their targets. It started audits of six cities in 2023 and later cancelled them without publishing the results. (CBC; Global News, May 9, 2024)

Could Guelph walk away?

Council could vote to drop the pledge. Under council's procedure bylaw that takes two-thirds of the whole council, which is 9 of 13. It wouldn't change much. (Procedure By-law (2025)-21067, section 5.8)

• The charge rules stay. The Development Charges Act doesn't mention housing pledges or housing targets. The exemptions are written into the Act, and only Queen's Park can change them. (Development Charges Act, current to October 12, 2026)
• The target stays. The 18,000 is the Province's number. Its water infrastructure fund scores a city's application against the city's provincially assigned 2031 target, pledge or no pledge. (Housing-Enabling Water Systems Fund guidelines)
• The mayor's powers stay. The mayor's strong mayor powers don't depend on the pledge. The regulation lists Guelph with no condition about a pledge or a target. (O. Reg. 530/22, Schedule 1)
• The reward is over. The Building Faster Fund was set up for 2023 to 2025, and Guelph didn't qualify for 2025. (2024 year-end capital report)

There's also a federal deal. Ottawa's Housing Accelerator Fund gave Guelph $21.4 million. The City had received $16.1 million by early 2026. The last payment, about $5.3 million, depends on finishing the City's action plan and issuing permits for 3,657 homes by the end of 2026. Staff told council in May that hitting that is unlikely. (2025 year-end capital report)

What's happening to rents

Building slowed while U of G hit record enrolment. It had 25,325 undergraduates in the fall of 2024 and expects domestic enrolment to keep growing. Guelph's rental vacancy rate rose from 1.5 per cent in 2022 to 3.1 per cent in 2025. The area's population grew just 0.3 per cent last year. Rents in existing buildings still went up about 4 to 5 per cent. The City's 2023 development charges study warned that slower construction makes housing costs worse. (GuelphToday, January 24, 2025; City pledge report, p. 4; CMHC, Guelph; GuelphToday, July 11, 2023)

What council does control

The Province sets the target and the rules on development charges. Council still decides a lot.

• Where growth goes. Density on Gordon, Stone, Victoria, College and the other main roads, not inside established neighbourhoods. (Priority 02)
• The rules that make lot splits automatic. The motion I'd bring is a wider minimum lot in established neighbourhoods and one parking space for every unit. A motion to require one space per unit lost 3 to 10 in December 2024. As I said at the Ward 5 candidates meeting, “we have to stop pointing the finger at the province when Guelph asks for less than what the province does.” (Ward 5 candidates meeting, October 8, 2026; council record, December 10, 2024)
• What gets built first. Transit, sidewalks, water and storm capacity have to be ready before the buildings fill. (Priority 03)
• Water. Don't approve growth today that the water can't serve in five years. (my Guelph Politico answers)
• Who pays. Whether property taxes keep covering the exemptions is council's call. So is pushing Queen's Park to pay its share, starting with the heads-and-beds levy it has held at $75 a student since 1987. (Priority 08)

The short version

Guelph grows because Queen's Park says it has to. The Province set the target and wrote the rules on development charges, and Guelph signed on, 13 to 0. Then building stalled. The charges came in at about a quarter of plan, and the City had already borrowed to build for growth. Walking away from the pledge wouldn't change the rules. What council controls is where growth goes and whether the roads and pipes are ready for it.

The Province sets the number. Council decides where it goes and whether we’re ready for it.