Plan Canada Summer 2026: Investing in Canada’s Future

Editors’ Note by Ray Tomalty PhD and Rylan Graham PhD, RPP, MCIP

The Cost of a Growing Nation

The question of who should pay for the infrastructure needed to support community growth has long been a controversial issue in Canada. Developers have advocated that the costs of growth be transferred to general taxpayers, while municipalities have preferred to see developers foot the bill. In many communities, the balance has shifted gradually, with more of the burden placed on developers, who, in turn, have shifted most of the burden onto home buyers in the form of higher prices. This satisfied taxpayers and made life easier for local councils, who could approve growth without having to worry about where the money would come from to finance infrastructure. This arrangement worked as long as housing prices remained broadly affordable for the average buyer.

In recent years, however, this balance has been upset by the housing affordability crisis that has swept the country. Developers have complained that many projects have failed to pencil out as infrastructure charges (and other government taxes and fees) have increased housing prices beyond what many people can realistically afford. As a result, senior governments are starting to question the ‘growth pays for growth’ mantra and incentivizing or mandating municipalities to lighten the burden of infrastructure costs on developers.

The ensuing debate has highlighted the broader ‘fiscal gap’ problem in Canadian federalism. If municipal property taxpayers and developers have reached their limit, then who will bear the costs of growth? Canadian municipalities generally lack the authority to levy diverse taxes (such as sales, income, commuter, amusement, leisure, and ‘sin’ taxes, as are common in the US) and face strict provincial limits on issuing debt. The current push to eliminate or reduce infrastructure charges leaves a vacuum in municipal budgets that has not yet been filled by a permanent, sustainable alternative.

In this issue of Plan Canada, articles explore the many dimensions of growth and the increasingly complex questions surrounding how Canadian communities finance, govern, and plan for infrastructure and services. Specifically, Basi examines the impacts of major resource and infrastructure projects on rural and resource-based communities, highlighting how national investment priorities often place significant demands on local infrastructure systems and municipalities’ capacity to respond.

Turning to municipal finance, Graham explores how local governments can leverage publicly-owned land to support intensification while also strengthening long-term fiscal sustainability in an era of constrained revenue tools.

Gretzinger considers the role of intermunicipal collaboration in addressing infrastructure deficits and growth-related tensions, offering practical strategies for building relationships based on cooperation and collaboration between neighbouring municipalities.

Focusing on transportation infrastructure, Cassello and Moos examine the governance and financing challenges associated with delivering major transit investments in Canadian metropolitan regions. They highlight how institutional coordination and stable funding structures can shape long-term regional well-being.

In the Montréal context, Fournier analyzes the use of land value capture to finance major transit projects, outlining the financial, legal, and administrative complexities associated with this increasingly important funding mechanism.

Marking 30 years since the Framework Agreement on First Nation Land Management, Smith, Honeyman, Black, Winch, and Predie explore how First Nations are reclaiming land governance authority to advance more culturally grounded planning systems and self-sustaining approaches to financing infrastructure and community development.

Shifting attention to rural growth pressures, D’Souza, Gibson, and Caldwell examine how specialized industry clusters are reshaping planning dynamics in rural communities. Using Bruce County’s nuclear sector as a case study, they demonstrate how planners play a critical intermediary role in balancing workforce needs, housing pressures, infrastructure demands, and long-term regional resilience.

Finally, Holland revisits the longstanding principle that ‘growth should pay for growth,’ questioning the assumptions that underpin contemporary development charge frameworks and considering their implications for housing affordability and the broader housing crisis.

How to Read This Issue of Plan Canada