Prime Minister Mark Carney and Premier Doug Ford say Ontario municipalities will be able to cut development charges in half for the next three years under a new $8.8 billion provincial-federal agreement aimed at lowering homebuilding costs and speeding up housing construction.
Speaking in Etobicoke alongside Ford and Toronto Mayor Olivia Chow, Carney said the plan would reduce a major cost burden tied to new housing while still supporting the infrastructure needed for growing communities.
“Today’s historic agreement with Ontario means that development charges across the province will be reduced by half for three years, and the essential infrastructure will still get built,” Carney said in a speech in Etobicoke, alongside Ford and Toronto Mayor Olivia Chow.
Funding plan targets housing infrastructure
Under the agreement, the federal government will contribute $4.4 billion over 10 years through the Build Communities Strong Fund. Ontario will match that amount, bringing the combined investment to $8.8 billion.
The governments say the funding will help pay for housing-enabling infrastructure while easing pressure from municipal development charges, which are often passed on by builders to buyers.
Municipalities use development charges to cover growth-related infrastructure costs, including sewage systems, roads and transit. Those fees have long been criticized by the housing industry as a factor driving up the cost of new homes.
Ford ties funding to municipal action
Ford said the measure will remove thousands of dollars from housing costs and help more people enter the market. He also made clear that municipal participation will influence where the money goes.
“Funding will be prioritized for municipalities that agreed to cut DC’s (development charges) by up to 50 per cent, as well as municipalities that have already lowered DC’s in recent months,” Ford said. “So to all my great 444 mayors and people in the municipalities, if you don’t cut DC’s, you aren’t getting any money.”
Toronto Mayor Olivia Chow welcomed the announcement, linking it to faster housing construction in the city.
“This historic announcement will mean thousands of new homes that can be built right here in Toronto,” Mayor Olivia Chow said. “For people who just want a home they can afford, this will make a real difference. It lowers the cost of building. That means more homes built faster.”
The announcement comes as both governments try to revive a slowing housing market. It also follows a recent decision to remove the HST from new homes, a move the governments said would save buyers up to $130,000.
