Prime Minister Mark Carney and Ontario Premier Doug Ford have announced a new federal-provincial housing partnership with development charge reductions and HST cuts at its core — a move the governments say will help lower the cost of a new Ontario home by up to $200,000.
At the centre of the agreement is a joint $8.8 billion commitment over 10 years, with the federal government and Ontario cost-matching funding for housing-enabling infrastructure. That investment is designed to support reductions to municipal development charges of up to 50%, with the reductions set to remain in place for three years. The targeted municipalities collectively cover approximately 80% of Ontario's population. Municipalities will also be expected to contribute to the reductions, with the province working alongside them to identify and advance infrastructure projects.
Development charges — the fees levied on developers to fund infrastructure such as water mains, roads, parks, and community facilities — have grown at what the federal government characterizes as an unsustainable rate in recent decades, increasing the cost of new homes, compressing developer margins, and stalling new builds.
The federal government describes the arrangement as the first partnership under its newly established Build Communities Strong Fund.
"Today's agreement will be transformational for Ontario and Canada, delivering new homes, transit and infrastructure, and supporting hundreds of thousands of good-paying jobs for Ontario workers," said Premier Ford. "Our government will continue to deliver on our plan to protect Ontario in partnership with the federal government and municipalities by lowering the cost of building, getting shovels in the ground faster, cutting red tape, and investing in workers."
The partnership also formalizes the HST relief announced last week, under which the full 13% HST is removed on new Ontario homes valued up to $1 million, representing a maximum saving of $130,000. That rebate is maintained on homes priced up to $1.5 million, after which it decreases proportionally — from $130,000 at the $1.5 million mark down to a maximum of $24,000 for homes at $1.85 million and above. The measure applies to eligible purchase agreements signed between April 1, 2026 and March 31, 2027. The Ontario government estimates it will deliver nearly $2.2 billion in tax relief, support approximately 8,000 additional housing starts next year, create up to 21,000 jobs, and contribute $2.7 billion to the province's GDP.
"Our new partnership with Ontario is about building more affordable homes, more transit, and more careers in the skilled trades," said Prime Minister Carney. "We're tackling the housing crisis from every angle — so we can build up housing supply and bring down costs for Canadians. We're building Ontario strong and Canada strong."
The deal also includes a set of transit commitments the governments say will support housing growth and reduce commute times across the province. A three-way partnership between the federal government, Ontario, and the City of Toronto will fund the Waterfront East transit line, serving Toronto's eastern waterfront including the East Bayfront and Port Lands. The line is expected to serve more than 150,000 people, support over 50,000 daily trips, and enable approximately 75,000 housing units. The governments also committed to advancing GO 2.0 passenger service across the Greater Golden Horseshoe, supporting the planning of the ALTO High-Speed Rail initiative along the Toronto–Québec City corridor, and continuing work on five major transit projects in the Greater Toronto and Hamilton Area: the Ontario Line, Eglinton Crosstown West Extension, Scarborough Subway Extension, Yonge North Subway Extension, and Hamilton Light Rail Transit.
Across the delivery of these projects, the governments will prioritize domestic suppliers, content, and materials under Canada's Buy Canadian Policy.
"Our government's key investments in infrastructure and housing will help remove barriers to homebuilding and home ownership," said the Hon. Gregor Robertson, Minister of Housing and Infrastructure. "This partnership with Ontario will mean more housing supply and more affordable homes — and make a real difference for Ontarians."
The announcement follows the introduction of Bill C-26 on March 26, 2026 — proposed legislation that would provide $1.7 billion to provinces and territories to implement measures aimed at increasing Canada's housing supply.
