Canada and Ontario Announce Major Housing Partnership to Lower Costs and Boost Supply

The federal government of Canada and the Province of Ontario have announced a new partnership aimed at tackling one of the biggest challenges facing Canadians today: housing affordability.

Prime Minister Mark Carney and Ontario Premier Doug Ford say the plan will help build more homes faster, lower taxes and fees on new housing, and improve infrastructure and transit across the province.

The goal is simple: make housing more affordable and easier to build while supporting jobs and economic growth.

Big Cost Reductions for New Homes

One of the most significant parts of this agreement is a major reduction in housing-related costs.

Lower development charges

Both governments will invest $8.8 billion over 10 years to help reduce municipal development charges by up to 50%.

These charges are fees builders pay to cities to cover infrastructure like roads, water systems, and parks. They are often a major reason new homes become more expensive.

Lowering these costs is expected to:

• Speed up new housing construction
• Make it cheaper for builders to build homes
• Support municipalities so they can still fund infrastructure

This funding will focus on communities that cover about 80% of Ontario’s population, and the plan will run for three years.

Major Tax Relief for Homebuyers

The governments are also introducing a significant tax break for people buying new homes.

Key points include:

• Full 13% HST removed for new homes up to $1 million
• Maximum savings of up to $130,000
• Partial rebates for homes priced up to $1.85 million
• Applies to eligible purchase agreements signed between April 1, 2026, and March 31, 2027

This measure alone is expected to:

• Provide $2.2 billion in tax relief
• Add 8,000 new housing starts
• Create up to 21,000 jobs
• Contribute $2.7 billion to Ontario’s economy

New Transit Projects to Support Growing Communities

Alongside housing, the partnership also includes major investments in transit to connect people to jobs, reduce commute times, and support future growth.

Projects include:

• Waterfront East LRT (Toronto)
  A new transit line serving Toronto’s eastern waterfront, expected to support over 150,000 people and enable up to 75,000 new homes.
• GO 2.0 Expansion
  Improvements to regional transit across the Greater Golden Horseshoe.
• ALTO High-Speed Rail
  Planning support for a potential high-speed rail line between Toronto and Québec City.
• Major GTA transit projects, including:
  • Ontario Line
  • Eglinton Crosstown West Extension
  • Scarborough Subway Extension
  • Yonge North Subway Extension
  • Hamilton LRT

These projects are intended to better connect growing communities and support long-term housing development.

Supporting Canadian Jobs and Industry

As part of the plan, governments will prioritize Canadian suppliers and materials through a new Buy Canadian Policy.

This means:

• More support for Canadian manufacturers and workers
• More stable supply chains
• Stronger domestic industries
• Faster delivery of major infrastructure projects

Why This Matters

Housing prices and construction costs have been rising for years. This new partnership aims to address the problem from multiple angles at once:

• Lowering taxes and fees
• Increasing housing supply
• Improving transit infrastructure
• Supporting jobs in construction and skilled trades

As federal Housing and Infrastructure Minister Gregor Robertson noted, the goal is to remove barriers to homebuilding and make housing more attainable for Canadians.

The Bottom Line

This partnership between Canada and Ontario represents one of the largest coordinated efforts in recent years to address housing affordability.

By reducing costs, speeding up construction, and investing in transit, the governments hope to increase supply and make housing more affordable for families across Ontario.

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