Canada and Ontario 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.

OTTAWA, ON, June 1, 2026 /CNW/ - 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.

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.

As of June 1, 2026, eligible municipalities can apply for funding through the DCRP. The deadline to apply is June 19^th, 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.

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.

Quotes

"Together, we're building Ontario and Canada strong. 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."

The Honourable Gregor Robertson, Minister of Housing and Infrastructure and Minister responsible for Pacific Economic Development Canada

"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

"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. 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."

The Honourable Rob Flack, Minister of Municipal Affairs and Housing

"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 to help more families achieve the dream of homeownership. This up to $8.8 billion provincial and federal investment will speed up housing construction, improve affordability, while also helping municipalities deliver critical housing-enabling infrastructure needs in our growing communities."

The Honourable Peter Bethlenfalvy, Minister of Finance

"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

"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 $8.8 billion 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

"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, President, 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 the $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

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 funding for the DCRP under the Build Communities Strong Fund, for which Ontario will enter into a bilateral funding agreement. 

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SOURCE Department of Housing, Infrastructure and Communities

Contacts: For more information (media only), please contact: Mohammad Hussain, Director of Communications, Office of the Minister of Housing and Infrastructure and Minister responsible for Pacific Economic Development Canada, [email protected]; Media Relations, Housing, Infrastructure and Communities Canada, 613-960-9251, Toll free: 1-877-250-7154, Email: [email protected]; Michael Minzak, Office of the Minister of Municipal Affairs and Housing, [email protected]; Communications Branch, [email protected]