Canada and Ontario Making Homes More Affordable in Toronto

The City of Toronto will receive $1.5 billion in federal and provincial funding through the Development Charge Reduction Program (DCRP) to accelerate housing construction and offset development costs. According to a June 23, 2026, announcement by Minister of Housing and Infrastructure Gregor Robertson, Premier Doug Ford, and Mayor Olivia Chow, the investment aims to support 44,000 new homes by lowering municipal development fees by 40 to 60 percent.

How will the DCRP funding lower housing costs?

The program provides direct financial relief to homebuilders, which the city expects will translate into lower purchase prices for buyers. According to City of Toronto estimates, the reduction in development charges could cut costs by approximately $83,000 for a single or semi-detached home. This initiative is part of a broader $8.8 billion, 10-year Canada-Ontario cost-matched agreement designed to stimulate residential development across the province.

Pro Tip: Homebuyers should monitor municipal planning reports for specific project approvals, as the $83,000 savings estimate is a localized projection based on current city development charge structures.

What infrastructure projects are prioritized for funding?

Funding is contingent upon the signing of a Canada-Ontario Build Communities Strong Fund (BCSF) agreement and subsequent due diligence. The goal is to unlock housing supply by addressing critical infrastructure gaps. According to official project documents, the funding covers several key areas:

Transit Improvements: Procurement of new buses and modernization of Line 2 signaling to increase service frequency.
Water and Utility Expansion: Widening watermains to accommodate increased residential density.
Roadway Connectivity: Reconstructing the Scarlet Road railway bridge, widening Steeles Avenue East, and extending Tradewind Avenue.
Neighborhood Revitalization: Support for the Liberty Village New Street project and the creation of a pedestrian-oriented corridor on John Street.

Why are development charges being reduced?

High development charges have historically been cited by industry stakeholders as a significant barrier to housing affordability. By providing municipalities with infrastructure funding, the province and federal government aim to offset the revenue lost when cities lower these fees. To qualify for the DCRP, municipalities must reduce residential development charges by at least 30 to 50 percent and commit to maintaining those lower rates for a minimum of three years.

Did you know? The current $8.8 billion, 10-year funding framework is specifically structured to ensure that infrastructure keeps pace with the rapid residential growth projected for Ontario’s largest urban centers.

Frequently Asked Questions

Does the $1.5 billion apply to all housing types?

Yes. The DCRP funding is prioritized for municipalities that reduce development charges across all residential housing types by at least 30 to 50 percent.

Episode 10: Making Homes Affordable Part 2

When will these infrastructure projects begin?

Projects are subject to the finalization of a Canada-Ontario BCSF agreement and individual project due diligence. Construction timelines will be determined on a project-by-project basis following these regulatory approvals.

How does this differ from previous housing initiatives?

Unlike grants that focus solely on construction, the DCRP links funding directly to the reduction of municipal fees, effectively subsidizing the “hidden” costs of development that are typically passed on to the buyer.

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