ONTARIO AND CANADA OPEN APPLICATIONS FOR NEW DEVELOPMENT CHARGE REDUCTION
PROGRAM
$8.8 billion federal-provincial funding program will support housing-enabling
infrastructure projects in municipalities that substantially reduce and maintain
development charges
June 01, 2026
Ministry of Municipal Affairs and HousingOttawa — The Ontario government is opening applications for a new program that
is intended to reduce building costs and speed up the construction of new homes.
As part of the up to $8.8 billion partnership announced in March, the
Development Charge Reduction Program(DCRP) will deliver federal and provincial funding over 10 years for
housing-enabling infrastructure projects, with funding prioritized for
municipalities that reduce development charges for all residential types by
30 per cent to 50 per cent or greater and maintain the reductions for at least
three years.
In March 2026, Ontario and Canada agreed to a cost-matched structure to provide
a combined $8.8 billion over 10 years for infrastructure investments in Ontario,
with Canada’s share of the funding flowing through the Build Communities Strong
Fund’s Provincial and Territorial stream, pending an agreement under this Fund.
The Build Communities Strong Fund was launched by the federal government earlier
this year to accelerate infrastructure projects across the country to reduce
costs.
“The Development Charge Reduction Program will make a life-changing difference
for families in municipalities across Ontario by lowering the cost of new homes
by tens of thousands of dollars,” said Rob Flack, Ontario’s Minister of
Municipal Affairs and Housing. “Along with the HST relief announced in Ontario’s
2026 budget, this program will make homes across the province more affordable. I
encourage municipal leaders across Ontario to work with us to reduce development
charges so we can get more shovels in the ground and keep the dream of
homeownership alive in Ontario.”
Applications will be assessed based on:
* percentage of committed DC rate reduction (minimum 30-50 per cent reduction)
* number of homes projected to build as a result of proposed DC relief
* the municipality’s financial contribution
Housing-enabling projects would be prioritized with consideration for the number
of homes enabled by the project. Municipalities are strongly encouraged to be as
ambitious as possible in their DC rate reductions to secure as much funding as
possible for their communities.
The Development Charge Reduction Program is made possible by the Canada-Ontario
Partnership to Build,
which was announced in March 2026. This partnership also supports Ontario’s
temporary expanded HST relief on new homes,
which will save homebuyers up to $130,000 off the cost of a new home.
“Together, we’re building Ontario and Canada strong,” said the Honourable Gregor
Robertson, Minister of Housing and Infrastructure and Minister responsible for
Pacific Economic Development Canada. “This joint partnership with Ontario will
speed up housing construction by lowering up front costs and investing in
housing-enabling infrastructure projects – building strong, resilient
communities that boost housing supply and drive economic opportunities.”
As of June 1, 2026, eligible municipalities can apply for funding through the
DCRP. The deadline to apply is June 19th, 2026. Timelines for the DCRP are
intended to coincide with the enhanced HST rebate in order to maximize relief
for home builders and home buyers.
“With global economic and trade uncertainty continuing to put pressure on
hardworking Ontarians, our government is delivering real relief by reducing the
cost of building homes through the Development Charge Reduction Program” said
Peter Bethlenfalvy, Ontario’s Minister of Finance. “With up to $8.8 billion in
provincial and federal funding, this investment will speed up housing
construction and improve affordability while also helping municipalities deliver
critical housing-enabling infrastructure in our growing communities.”
Funding through the Canada-Ontario Partnership to Build will also be made
available for rural, small and northern municipalities, with more details to be
announced at a later date.
QUICK FACTS
* Of 444 municipalities in Ontario, more than 200 currently levy development
charges.
* The DCRP is an application-based program, with municipal contributions set at
10% of project costs at a minimum.
* The federal government will deliver their cost-matched portion of the funding
for the DCRP under the Build Communities Strong Fund, for which Ontario will
enter into a bilateral funding agreement.
QUOTES
“Our government is taking action to make housing more affordable and easier to
build. By partnering with Ontario to reduce development charges and invest in
critical infrastructure, we are helping lower upfront costs and get more homes
built faster. With federal funding delivered through the Build Communities
Strong Fund to accelerate infrastructure and reduce costs, this work will
support growing communities and unlock more housing supply across the country.”
– The Honourable François-Philippe Champagne
Minister of Finance and National Revenue
“Investing in housing-enabling infrastructure is part of our government’s
$236 billion capital plan to protect Ontario, drive economic growth, create jobs
and strengthen communities. Through the Development Charge Reduction Program and
the Municipal Housing Infrastructure Program, our government is ensuring that
communities have access to the support they need to deliver more homes, build
critical infrastructure and lay the foundation for long-term prosperity.”
– Todd McCarthy
Ontario’s Acting Minister of Infrastructure
“Reducing development charges is an important step toward getting more homes
built faster across Carleton and Ontario. By lowering costs and supporting new
housing construction, we are helping create the conditions needed to increase
supply, improve affordability, and ensure more families can find a home in the
communities they want to live in.”
– George Darouze
MPP for Carleton
“AMO welcomes infrastructure investments that support building more homes and
creating more jobs. This significant funding recognizes the important role all
levels of government play in achieving the growth that makes our communities,
province and nation prosperous. Every community faces unique infrastructure and
housing needs and municipalities look forward to partnering with the province on
individualized funding agreements.”
– Robin Jones, Association of Municipalities of Ontario President
Mayor of Westport
“OBCM Mayors have long advocated that the federal and provincial governments
have a significant role in funding housing and growth-related infrastructure our
residents need. While we await more details on how this program will work for
municipalities, we appreciate that it is voluntary and each community will
decide what works best for them to help address the housing affordability crisis
in our communities. This program is a step in the right direction of recognizing
that all levels of government must work together to lift costs off the property
tax base.”
– Marianne Meed Ward
Chair of Ontario Big City Mayors, Mayor of Burlington
“Collectively, we must work together to build critical housing-enabling
infrastructure while maintaining affordability across our communities.
Development charges help pay for the pipes and roads that make our houses homes.
Boosting housing supply and affordability requires strong partnerships with
municipal, federal, and provincial leaders. We look forward to continuing to
work together to support affordability and to ensure funding programs like this
are flexible and responsive to local needs. MARCO members are committed to doing
their part.”
– Karen Redman
Chair of the Mayors and Regional Chairs of Ontario (MARCO) and Chair of the
Region of Waterloo
“The Western Ontario Wardens’ Caucus welcomes the commitment by both the federal
and provincial governments to provide infrastructure funding that helps
municipalities accommodate growth while maintaining the services residents rely
on. We appreciate that participation in this program is voluntary, allowing
municipalities to determine whether it aligns with their local needs and
priorities. This investment recognizes that addressing Ontario’s housing
shortage requires more than building homes—it requires the roads, water and
wastewater systems, transit, and other critical infrastructure that support
complete communities. Ensuring local governments have the financial tools needed
to support growth and maintain services is critical to building strong
communities and continuing to power Ontario’s economic engine.”
– Warden Marcus Ryan
Chair, Western Ontario Wardens’ Caucus
“The Eastern Ontario Wardens’ Caucus welcomes the Federal and Ontario
governments’ working together to support municipalities through the Development
Charge Reduction Program. This investment, coupled with the flexibility provided
to municipalities, will help communities deliver the housing and infrastructure
needed to support growth. We look forward to working with our federal and
provincial partners to ensure eastern Ontario has the resources needed to build
more homes and support sustainable growth.”
– Chair Bonnie Clark
Eastern Ontario Wardens’ Caucus
“FONOM welcomes the joint Federal and Provincial investment in housing
infrastructure and affordability. Northern municipalities face unique
infrastructure and growth challenges, and we appreciate both levels of
government recognizing the importance of supporting communities of all sizes as
they work to address housing needs and support economic growth.”
– Dave Ploudre
President, Federation of Northern Ontario Municipalities
“We applaud this investment which gives many rural municipalities access to
funding. This collaborative initiative offers a voluntary tool that can help
unlock planned growth, create jobs, and keep small communities vibrant while
respecting rural fiscal realities.”
– Christa Lowry
Rural Ontario Municipal Association Chair, Mayor of Mississippi Mills
“Ottawa is striving to be the most-housing friendly city in Canada. This new
program from the Governments of Ontario and Canada will dramatically cut fees
and make it easier to build thousands of new homes in our city. Our development
charges are already significantly lower than those in many other cities. By
reducing them even further, we’ll add to a long list of measures we’ve enacted,
including slashing red tape, cutting and deferring fees, and passing an
ambitious new zoning by-law. All of these measures, including cutting
development charges, are helping us build more homes and build them faster.”
– Mark Sutcliffe
Mayor of Ottawa
“OHBA strongly supports the Canada-Ontario commitment to reduce development
charges and lower the cost of building new homes. We thank both levels of
government for recognizing that reducing these charges is essential to improving
new home affordability and restoring project viability. The sooner
municipalities can begin reducing development charges across all home types and
make new projects viable, the sooner builders get more homes built. Ontario’s
builders look forward to working with all municipalities to achieve our common
goal of building more homes for Ontario families at a price they can afford.”
– Scott Andison
Chief Executive Officer, Ontario Home Builders’ Association (OHBA)
“This historic initiative provides municipalities with the opportunity to
rapidly increase housing supply by aligning development charge relief,
infrastructure investment, and government partnership. Lowering development
charges will help address the economic viability challenges that has stalled
housing development across the GTA in recent years. Through this initiative,
municipalities and industry working in partnership, can accelerate shovel-ready
communities while ensuring that the building and development industry continues
to provide well-paying jobs and is an engine of economic growth.”
– Dave Wilkes
President and CEO, BILD
“Development charges have long posed an affordability challenge to consumers as
they grew exponentially far beyond incomes and the capacity of homebuyers to
pay. Today, the government of Premier Doug Ford and Minister of Municipal
Affairs and Housing Rob Flack, along with federal Minister Gregor Robertson and
the government of Prime Minister Mark Carney, have taken a giant step to address
this issue and we commend them for their leadership and determination to meet
this challenge. Minister Flack’s Bill 98 addressed process issues with respect
to DC’s and now in partnership with the federal government, Ontario is leading
the way to support new homebuilding by dealing with DCs in a fair and effective
manner.”
– Richard Lyall
Residential Construction Council of Ontario
“On behalf of our nearly 100,000 REALTOR® Members, the Ontario Real Estate
Association (OREA) is thrilled to see all levels of government working together
on solutions to keep the dream of homeownership alive. Today’s official launch
of the Canada-Ontario Partnership to Build program and up to $8.8 billion in
funding for municipalities to reduce development charges will help build more
affordable homes, create the infrastructure we need, and support skilled jobs
across the province. This is exactly the leadership we need during these
uncertain times, and we commend the Governments of Ontario and Canada for their
efforts to bring housing affordability back within reach.”
– Kim Fairley
2026 Ontario Real Estate Association President
“Today’s announcement provides important clarity on the next steps and timelines
for municipalities and industry as they work to bring more housing online. At a
time when many rental housing projects are ready to move forward, predictability
and a supportive development environment are critical to getting shovels in the
ground. Continued coordination and partnership between all levels of government
are essential to creating the conditions needed for more housing to be built
across Ontario.”
– Tony Irwin
President and Chief Executive Officer, Federation of Rental-housing Providers of
Ontario
“For the first time in a long time, the industry is starting to see the kind of
coordinated action from governments that can genuinely help restart housing
supply. The combination of HST relief and meaningful infrastructure and
development charge support has the potential to improve project viability,
support affordability, and help get shovels back in the ground. Municipalities
also have a critical role to play, and we strongly encourage local governments
to work alongside the Province and federal governments to create conditions that
support housing construction, attainability and jobs.”
– Dani Gabriele
Chair of the West End Home Builders Association
“Mattamy Homes applauds the commitment by the Ontario and federal governments to
lower development charges through the Canada–Ontario Partnership to Build (COPB)
program. We encourage municipalities across the province to actively participate
in its implementation to help ensure success, which will enable more homes to be
brought to market and support lower costs for future homeowners.”
– Brad Carr
CEO, Mattamy Homes Canada
“A strong housing sector is critical to a strong Ontario. Post-pandemic
pressures on homebuilding have been significant, with rising costs, fees, and
taxes creating an environment where the costs of building often exceed what the
market can afford. Thanks to the decisive leadership of Premier Ford, Minister
Flack, and Minister Robertson, this dynamic is changing and 100,000 jobs in
Ontario are being protected. While there is still work to be done, through
meaningful sales tax relief and targeted development charge reforms, we are
successfully improving housing affordability and increasing supply across
Ontario.”
– Frank Cairo
CEO, Caivan
“The province’s continued investments in housing-enabling infrastructure are
essential to supporting growing demand, addressing infrastructure gaps, and
helping communities of all sizes manage growth. Support for both large-scale
housing infrastructure projects and targeted funding for small and rural
municipalities will help move these projects forward while creating and
sustaining skilled trades jobs across Ontario. We commend Premier Ford and
Minister Flack for their leadership and continued commitment to building the
infrastructure needed to increase housing supply and support long-term economic
growth.”
– Patrick McManus
Executive Director, Ontario Sewer and Watermain Construction Association
