Ontario and the federal government have opened applications for a new Development Charge Reduction Program aimed at accelerating housing construction and lowering the cost of new homes. The initiative is part of a broader Canada–Ontario partnership valued at up to $8.8 billion over ten years, designed to support housing-enabling infrastructure and improve affordability across the province.
The program focuses on municipalities that commit to significantly reducing development charges, which are fees imposed on new residential construction to help fund infrastructure such as roads, water systems, and community services.
The Development Charge Reduction Program provides cost-matched federal and provincial funding to support infrastructure projects that enable new housing development. Municipalities that reduce development charges by at least 30 to 50 per cent for residential projects and maintain those reductions for a minimum of three years will be prioritized for funding.
Funding decisions will be based on several factors, including the scale of development charge reductions committed by municipalities, the number of new homes expected to be built as a result, and the financial contribution offered by the municipality itself.
The program is designed to encourage local governments to take stronger action on housing affordability while ensuring that essential infrastructure keeps pace with growth.
More than 200 municipalities in Ontario currently impose development charges, making them eligible to apply under the program. Applications are open to municipalities that can demonstrate meaningful reductions in development charges alongside plans for housing-enabling infrastructure projects.
Municipalities are required to contribute at least 10 per cent of project costs, with additional funding provided through the provincial-federal partnership. The initiative also places emphasis on maximizing the number of homes enabled through each funded project.
Provincial and federal officials have positioned the program as a key step toward improving housing affordability and increasing supply. The initiative is intended to work alongside other affordability measures, including temporary tax relief on new housing construction.
Government leaders have emphasized that lowering upfront construction costs is essential to accelerating homebuilding and addressing ongoing housing shortages across Ontario.
Applications for the Development Charge Reduction Program opened on June 1, 2026, and will remain open until June 19, 2026. Municipalities selected through the program will receive funding to support infrastructure projects tied directly to new housing development.
The rollout of the program is expected to align with broader housing affordability measures in order to maximize cost savings for both builders and homebuyers across Ontario.
