OTTAWA — The federal and Ontario governments said on Monday they will match each other with billions of dollars in local infrastructure spending to help cities cut costly development fees and get more homes built.
Prime Minister Mark Carney and Premier Doug Ford joined Mayor Olivia Chow in Toronto to unveil a plan for the province and federal government to each spend $4.4 billion on housing-related infrastructure in the province over the next 10 years.
The funding deal is the first to be announced through the federal government’s Build Communities Strong Fund and is meant to help municipalities cut development charges, or DCs, by as much as 50 per cent for the next three years.
“If you don’t cut DCs, you aren’t getting any money,” Ford said in a message to mayors across the province Monday.
“But if you do, we will be there to support you.”
Municipal development charges are fees imposed by a city on a developer that usually helps build infrastructure like transit or wastewater systems needed for new homes. Experts warn these fees have ballooned and inflated the cost of homebuilding in recent years, making it harder to build much-needed supply.
Funding will be granted based on a list of projects suggested by a municipalities and will be prioritized for high-growth cities where housing shortfalls are most acute. These municipalities will have to commit to cutting development charges by 30 to 50 per cent for three years in order to be eligible for money through this stream.
Because the funding will be doled out over 10 years, Carney said these agreements will spread the burden of paying for infrastructure out over time rather than imposing it upfront.
Ontario also unveiled a plan with the federal government last week to waive the harmonized sales tax on eligible new builds for the next year.
Taken together, the federal and Ontario governments estimate that these new agreements will save up to $200,000 in taxes and fees on the cost of a new home.
Carney said he expects competitive forces in the market will push developers to pass on cost-savings from the development charge relief to homebuyers.
The latest funding announcement comes a few days after Ottawa announced it was earmarking $1.7 billion for all provinces and territories to boost housing supply however they see fit.
This report by The Canadian Press was first published March 30, 2026.
Craig Lord, The Canadian Press
