Carney, Ford announce major housing deal to cut costs and boost supply in Ontario
Canada Ontario housing partnership aims to cut costs and boost housing supply
TORONTO — The federal and Ontario governments have unveiled a sweeping new housing and infrastructure partnership aimed at lowering the cost of new homes and accelerating construction across the province.
Prime Minister Mark Carney and Ontario Premier Doug Ford announced the agreement Monday, which includes measures to cut taxes and fees on new homes by as much as $200,000 while supporting transit expansion and housing supply.
The deal comes amid continued affordability pressures in Ontario’s housing market, with both levels of government framing the agreement as a coordinated response to rising costs and limited supply.
Cutting development charges and taxes on new homes
A central component of the agreement focuses on reducing upfront costs for builders and homebuyers.
The federal and provincial governments will jointly invest $8.8 billion over 10 years to support housing-enabling infrastructure and reduce municipal development charges by up to 50 percent. These reductions will apply for three years and target municipalities representing approximately 80 percent of Ontario’s population.
Development charges—fees used to fund infrastructure such as roads, water systems, and community facilities—have been identified as a key barrier to new housing construction.
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In addition, the agreement eliminates the provincial portion of the Harmonized Sales Tax (HST) on new homes valued up to $1 million. The rebate will scale for homes priced up to $1.85 million.
According to provincial estimates, the tax measure could provide nearly $2.2 billion in relief, support roughly 8,000 additional housing starts next year, and create up to 21,000 jobs.
Transit expansion tied to housing growth
The partnership also aligns housing development with major transit investments across the Greater Toronto and Hamilton Area (GTHA).
Key projects include:
- Waterfront East LRT: A three-way partnership between Canada, Ontario, and the City of Toronto serving more than 150,000 residents and enabling up to 75,000 new housing units
- GO 2.0 expansion: Increased regional rail service across the Greater Golden Horseshoe
- ALTO High-Speed Rail: Continued planning for a Toronto–Québec City corridor
- Five major GTA transit projects: Ontario Line, Eglinton Crosstown West Extension, Scarborough Subway Extension, Yonge North Subway Extension, and Hamilton LRT
Officials say these projects are designed to connect housing supply with employment hubs and reduce commute times.
Coordinated approach across all levels of government
The agreement requires participation from municipalities, which are expected to work with the province to identify priority infrastructure projects and support development charge reductions.
The federal government’s Build Communities Strong Fund will be used to offset municipal revenue losses tied to lower development charges.
At the same time, the partnership reinforces Canada’s “Buy Canadian” policy, prioritizing domestic suppliers and materials for infrastructure and housing projects.
Leaders position deal as a major housing intervention
Prime Minister Carney said the agreement is part of a broader effort to address housing affordability and economic resilience.
“Our new partnership with Ontario is about building more affordable homes, more transit, and more careers in the skilled trades. We’re tackling the housing crisis from every angle – so we can build up housing supply and bring down costs for Canadians.”
Premier Doug Ford described the deal as “transformational,” pointing to its potential to accelerate construction and create jobs across the province.
Housing Minister Gregor Robertson added that the partnership is intended to remove barriers to homebuilding and increase overall supply.
Federal housing strategy continues to expand
The announcement builds on recent federal initiatives, including the creation of Build Canada Homes, a new agency focused on scaling affordable housing supply using public land and modern construction methods.
The federal government has also introduced legislation aimed at delivering immediate funding to provinces and territories to boost housing supply.
Officials say additional partnerships with other provinces could follow.
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