Ontario and Canada Making Homes More Affordable in Toronto

Stephen Lecce, MPP
3 days ago
7 min read

TORONTO — Today, the Honourable Doug Ford, Premier of Ontario and the Honourable Gregor Robertson, federal Minister of Housing and Infrastructure and Minister Responsible for Pacific Economic Development Canada, along with Her Worship Olivia Chow, Mayor of Toronto, announced that Toronto is receiving $1.5 billion through the Development Charge Reduction Program (DCRP) in recognition of its commitment to reducing development charges by 40 to 60 per cent, depending on the unit type, for more than three years. The funding will help build more homes and community infrastructure in the City of Toronto while advancing the province’s plan to protect Ontario by investing in projects that support economic growth and keep workers on the job.

“Our government is doing everything we can to lower costs for families, keep workers on the job and get shovels in the ground faster on new homes,” said Premier Ford, “Combined with our historic 13 per cent cut to the HST on new homes, today’s agreement will lower the cost of building new homes by more than $200,000 in Toronto, getting more shovels in the ground and creating thousands of good-paying construction jobs in the process.”

“Together, we’re building Ontario and Canada strong,” said Minister Robertson. “By partnering with Ontario, the federal government is helping speed up housing construction by lowering upfront costs and investing in housing-enabling infrastructure projects — building strong, resilient communities that boost housing supply and drive economic opportunities.”

Toronto estimates reducing the city’s development charges and investing in housing-enabling infrastructure will unlock more than 44,000 new housing units and deliver roughly $1.95 billion in relief for homebuilders. Development charge reductions in Toronto will result in approximately $83,000 in savings on the construction of a new single/semi-detached home. These development charge reductions will take effect following approval by Toronto City Council and must remain in effect for a minimum of three years.

“People should be able to afford a home in our city. Today’s announcement will make that easier while creating tens of thousands of good jobs in Toronto,” said Mayor Chow. “Through our strong partnership with the provincial and federal government, we’re reducing the cost of building new homes and ensuring the city can keep investing in the infrastructure we need to support communities.”

Development charge rates would be reduced as follows:

By 60 per cent for the following housing types:

Single and semi-detached homes
Apartments and multi-unit homes with two or more bedrooms, including condos and rental units
Dwelling rooms.

By 40 per cent for the following housing types:

Studio and one-bedroom apartments and multi-unit homes, including condos and rental units.

Subject to further due diligence, the DCRP will provide the City of Toronto with up to $1.5 billion to support infrastructure projects in communities across Toronto that will unlock housing in Canada’s largest city, including by:

Purchasing new buses to meet current and future ridership demand
Modernizing Line 2 signalling to enable more frequent service
Expanding watermains that would benefit residents in the Lower Don Lands and south Leslieville, while enabling more community growth
Delivering area-wide infrastructure improvements that address traffic congestion on St. Clair Avenue West between Keele Street and Old Weston Road
Supporting the Liberty Village New Street project
Reconstructing the Scarlett Road railway bridge overpass to improve safety and increase capacity
Widening Steeles Avenue East from Tapscott Road to Ninth Line, revitalizing John Street to create a pedestrian-oriented corridor between Front Street and Stephanie Street and extending Broadview Avenue south at Eastern Avenue
Delivering a new road connection that will extend Tradewind Avenue north to Sheppard Avenue East via Bonnington Place, supporting planned growth and improving local connectivity.

In March 2026, Ontario and Canada agreed to a cost-matched structure to provide a combined $8.8 billion over 10 years for infrastructure investments in Ontario, with Canada’s share of the funding flowing through the Build Communities Strong Fund. The Build Communities Strong Fund was launched by the federal government this year to accelerate infrastructure projects across the country and reduce costs. The two governments also agreed to remove the full HST on new homes from April 1, 2026, to March 31, 2027, saving homebuyers up to $130,000 off the cost of a new home in addition to the savings realized through the DCRP.

As part of the Canada-Ontario Partnership to Build, the DCRP is delivering funding over 10 years for housing-enabling infrastructure projects. Funding is being prioritized for municipalities that reduce development charges for all residential types by 30 per cent to 50 per cent or greater and maintain the reductions for at least three years.

Quick Facts

Funding through the DCRP will support vital housing-enabling infrastructure projects, such as water/wastewater systems, roads, bridges, transit, fire stations and police detachments, along with community features to establish and enrich neighbourhoods like libraries or recreation centres.
Receipt of the funding, and confirmation of approved projects, will be subject to the City of Toronto entering into a Transfer Payment Agreement with Ontario and complying with program requirements.
Municipalities must contribute a minimum of 10 per cent of project costs as part of the DCRP.
Of 444 municipalities in Ontario, more than 200 currently levy development charges.

Quotes

"We know that it costs too much and takes too long to build new homes in Ontario. Our government will continue to work with our municipal and federal partners to break down these barriers and get more homes built."

- Rob Flack

Minister of Municipal Affairs and Housing

"We continue to work with our federal and municipal partners to lower housing costs so more homes can get built while creating good-paying jobs for workers. By investing in housing-enabling infrastructure through the Development Charge Reduction Program, we’re helping drive economic growth, strengthen local communities and ensure Toronto remains a competitive place to live, work and build."

- Peter Bethlenfalvy

Minister of Finance

"As part of our government’s $236 billion capital plan to protect Ontario, we are building roads and water systems that make new housing possible. Through the Development Charge Reduction Program and the Municipal Housing Infrastructure Program, we are helping communities access the support they need to speed up homebuilding, expand critical infrastructure, support economic growth and keep costs down."

- Todd J. McCarthy

Acting Minister of Infrastructure

"Our government is investing in the infrastructure Ontario needs to support unprecedented growth and get people where they need to go faster. Through the Development Charge Reduction Program, we are working with Toronto to deliver critical transit, road and water infrastructure that will unlock new housing, reduce congestion and help build stronger, more connected communities for generations to come."

- Prabmeet Sarkaria

Minister of Transportation

"Today’s announcement acknowledges the significant role the federal and provincial governments have to play in funding major municipal infrastructure projects. We look forward to further announcements in the coming weeks as our members who applied for the program finalize agreements with the province to get more homes built faster."

- Marianne Meed Ward

Mayor of Burlington, Chair of Ontario’s Big City Mayors

"Today’s announcement is a significant step toward restoring housing affordability and getting more homes built in Toronto. Through the Canada-Ontario Partnership to Build, the federal and provincial governments are demonstrating the kind of collaboration needed to address Ontario’s housing supply crisis. Development charges have increased dramatically over the last decade and now represent a substantial portion of the cost of a new home. By reducing development charges by 40 to 60 per cent and providing $1.5 billion in support to the City of Toronto, governments are helping remove one of the biggest barriers to housing delivery. We commend all three orders of government for working together on a practical solution that will support housing supply, improve project viability and help get more housing projects moving across Toronto."

- Scott Andison

Chief Executive Officer, Ontario Home Builders’ Association

"The Building Industry and Land Development Association and its members applaud the announcement by the City of Toronto, the Government of Ontario and the Government of Canada on the reduction of development charges in the City of Toronto by 40 to 60 percent for the next three years. The leadership shown by this first, historic announcement under the Development Charge Reduction Program, enabled by the Canada-Ontario Partnership to Build will significantly increase housing project viability in the city, increasing residential construction activity, supply, economic activity and will protect jobs."

- Dave Wilkes

President and CEO, Building Industry and Land Development Association

"Development charges are among the largest government-imposed costs built into the price of new housing in Ontario and can account for up to 20 per cent of a home’s purchase price. Homebuyers and renters ultimately bear those costs, and they have contributed to worsening affordability and slower housing construction across the Greater Golden Horseshoe. TRREB has consistently advocated for lower upfront development costs as one of the most effective ways to improve affordability and support new housing supply, and we thank Prime Minister Mark Carney, Premier Doug Ford, Minister Gregor Robertson, Minister Peter Bethlenfalvy, Minister Rob Flack, and the City of Toronto for their collaboration on this important initiative."

- Daniel Steinfeld

President, Toronto Regional Real Estate Board (TRREB)

"This is a major step forward for Toronto. Significantly lower development charges will help unlock investment in new purpose-built rental housing, make more projects viable and send a powerful message that Ontario’s capital is ready to build. The federal, provincial and municipal governments are demonstrating real leadership by addressing one of the most significant costs facing new housing. More viable rental projects mean more supply and, over time, greater affordability for Toronto renters."

- Tony Irwin

President and CEO, Federation of Rental-housing Providers of Ontario

"The Ontario Real Estate Association is thrilled to see all levels of government collaborating to support the City of Toronto with $1.5 billion in funding through the Development Charge Reduction Program. We’ve been calling on leaders to take charge and steer us in the right direction on housing and this announcement to fund and enable necessary infrastructure will do exactly that. This is the type of bold action that will get more homes built, support growing communities and help Ontarians keep more money in their pockets. We commend Minister of Municipal Affairs and Housing Rob Flack, Premier Doug Ford and the Government of Canada for continuing to listen and stand up for the next generation of homeowners."

- Kim Fairley

2026 President, Ontario Real Estate Association

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