New research by the Federation of Canadian Municipalities (FCM) suggests that the cost to build infrastructure to support housing-construction targets could be as much as $600 billion.

While the federal and provincial governments are putting plans in place for the construction of 5.8 million housing units across the country by 2030, FCM says that plan tells only part of the construction story.

“Municipal infrastructure is a prerequisite to building more housing,” said Scott Pearce, Mayor of Gore, Quebec and President of FCM. “We cannot build new housing without putting in place the municipal water, wastewater, transportation and community infrastructure that provides the critical foundation for Canadians’ quality of life.”

New research commissioned by FCM estimates that, on average across the country, the cost of the municipal infrastructure required to support new housing is in the range of $107,000 per home.

Considering the 5.8 million homes that the federal and provincial governments are directing municipalities to approve by 2030, the scale of the gap could reach an equivalent of $600 billion in municipal infrastructure investment.

That figure, says FCM does not include costs to operate and maintain these assets, to adept them for climate change or build to low-carbon standards, nor does it also include costs to provide community services such as policing, hospitals and schools.

“Municipalities have limited options to pay for growth,” said Mike Savage, Mayor of Halifax and Chair of FCM’s Big City Mayors’ Caucus. “Property taxes and contributions from housing developers, generally known as Development Charges, are most often the primary sources, and the most stable. Yet the rapid pace of growth, combined with high construction prices due to inflation, means the status quo is no longer keeping up, and the gap is getting wider every day.”

The Canadian Construction Association recently called out the federal government’s most recent Fall Economic Statement for its lack of action on this issue.

“More homes cannot be built without the essential housing-enabling infrastructure to support it – a position the industry has repeatedly emphasized to all orders of government. Details on these necessary investments are missing,” the association wrote.

At the moment, raising taxes is the only tool municipalities have at their disposal to support the construction of these millions of additional housing units. That idea runs contrary to the measures put in place by the federal and provincial government to remove the GST and HST from the construction of multi-unit residential properties.

FCM says it wants the federal government to sit down with provincial, territorial and municipal leaders to discuss a new Municipal Growth Framework that better aligns municipal revenue with economic growth and population growth.

Such a framework, it says, would improve affordability and enable municipalities to take concrete action on housing affordability and other pressing challenges facing the country, including homelessness and climate change.