Impact Fees
Learn about impact fees in Canadian real estate — what they fund, when they apply, and their role in development budgeting.
July 29, 2025
What is Impact Fee?
Impact fees are charges levied by municipalities on new developments to offset the cost of additional public infrastructure and services required by growth.
Why Gentrification Matters in Real Estate
In Canadian real estate development, impact fees help fund schools, parks, roads, and utilities needed for expanding communities.
Key features:
- Collected at the time of permitting or subdivision
- Used for growth-related infrastructure
- Applied to residential, commercial, or industrial projects
Understanding impact fees helps developers budget and plan for project feasibility.
Example of Gentrification in Action
The developer accounted for impact fees related to new park construction when preparing the project budget.
Key Takeaways
- Funds growth-related infrastructure
- Charged on new developments
- Supports schools, parks, utilities, and roads
- Adds to project development costs
- Ensures community services keep pace with growth
Related Terms
- Development Charges
- Building Permit
- Urban Planning
- Official Plan
- Zoning
An overview of Hedge Road Landing. (Alliance Homes)
6525 Mississauga Road and its surrounding context. (RBC Capital Markets & CBRE)
Property details for 6525 Mississauga Road. (RBC Capital Markets & CBRE)
National average resale-price growth and housing-starts growth, smoothed over three months. The comparison illustrates the cycle; it does not establish how much a price change causes construction to change.
Trailing 12-month starts in centres of 50,000 or more remove the usual monthly seasonality. Ownership combines the homeowner and condominium categories; rental is shown separately.
Six-month averages of provincial starts, expressed at annual rates. The smoothing reduces the influence of individual apartment projects.
The same August benchmark compared with two different starting points. Three-month changes are not annualized.
Average sale prices show the difference in purchase costs across markets. They do not measure affordability relative to local incomes or construction costs.
Newfoundland and Labrador remains above its pre-pandemic sales pattern, but August activity was below last year. Historical lines retain their original release vintages.
Galleria III at Galleria on the Park (Hariri Pontarini Architects) 
Bisha Hotel & Residences (Lifetime Developments)
