City receiving $697.2 million for housing-enabling infrastructure in exchange for reducing and eliminating development charges over three years
VAUGHAN, ON, Aug. 26, 2026 /CNW/ -- Today, the governments of Ontario and Canada announced that the City of Vaughan is receiving up to $697.2 million through the Development Charge Reduction Program (DCRP) in recognition of its commitment to reduce development charges by 50 per cent for residential developments from March 30, 2026, to March 31, 2029. Furthermore, for qualifying residential developments that meet specified construction milestones, Vaughan is eliminating development charges altogether from February 25, 2026, to October 31, 2027. The funding recognizes Vaughan's early leadership in reducing development charges. It will help build more homes and community infrastructure while advancing the province's plan to protect Ontario by investing in projects that lower costs for families, support economic growth and keep workers on the job in the face of the latest U.S. tariffs on Canada.
The changes to Vaughan's development charges are estimated to reduce the cost of building new homes by up to $98,056. When combined with the up to $130,000 in savings enabled through the expanded HST relief on eligible new homes, these initiatives could save Vaughan families up to $230,000 off the cost of a new home.
In March 2026, the Government of Canada and Ontario 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 (BCSF). The two governments also agreed to provide relief on the full HST on eligible new homes from April 1, 2026, to March 31, 2027, saving homebuyers up to $130,000 off the cost of a new home. This is in addition to cost reductions for builders through the DCRP.
The City of Vaughan estimates that the construction cost savings over the development charge reduction period, along with the investment in housing-enabling infrastructure, would unlock over 120,000 new housing units, supporting a housing market with more choice and greater affordability for homebuyers and renters.
The elimination and reduction of development charges are already in place. Subject to the signing of a Canada-Ontario BCSF agreement, further due diligence by both governments and the signing of an Ontario-municipal Transfer Payment Agreement, the DCRP will provide the City of Vaughan with up to $697.2 million to support infrastructure projects in communities across Vaughan that will unlock housing, including:
- Improving water, wastewater and stormwater infrastructure including a new watermain at Keele Street, upsizing and reconstruction of the Block 22 watermain as well as culvert improvement, realignment and conveyance capacity improvement of Black Creek.
- Supporting road and transportation needs of growing communities in the city by widening Huntington Road to four lanes; widening Kirby Road to four lanes; adding a mid-block crossing on Colossus Drive; extending Bass Pro Mills Drive from Highway 400 to Weston Road; expanding Teston Road between Pine Valley Drive and Kleinburg Summit Way with a new two-lane road alignment and related infrastructure; and improving Teston Road between Keele and Dufferin Streets with a new four-lane road and related infrastructure.
- Replacing the Canadian Pacific Kansas City (CPKC) Rail Bridge to accommodate the widening of Highway 7 to 8 lanes.
- Planning, designing and building emergency services facilities such as a new double-bay fire station at Rutherford Road and Dufferin Street.
As part of the Canada-Ontario Partnership to Build, the DCRP is delivering funding over 10 years for housing-enabling infrastructure projects. Funding is being prioritized for municipalities that reduce development charges for all residential types by 30 to 50 per cent or greater and maintain the reductions for at least three years.
Quotes
"Today's investment will make homes more affordable for Vaughan families and help keep workers on the job in the face of President Trump's tariffs. Mayor Del Duca and Vaughan council's early leadership in lowering development charges, along with today's provincial and federal funding, shows what Team Canada can do when we work together to protect workers and families."
The Honourable Doug Ford, Premier of Ontario
"By partnering with Ontario and municipalities like the City of Vaughan through the Development Charge Reduction Program, our government is helping families save up to $230,000 on the purchase of a new home when combined with the removal of the HST. We're also unlocking over 120,000 new housing units while investing in the infrastructure that our communities need. This is what building strong at home looks like."
The Honourable Maninder Sidhu, Minister of International Trade and Member of Parliament for Brampton East
"Building more homes requires strong partnerships and the infrastructure to support growing communities. Through the Development Charge Reduction Program, the Government of Canada is working with Ontario and Vaughan to lower the costs of building new homes, unlock tens of thousands of new housing opportunities, and ensure families have access to the homes and communities they need. This is what this Canada–Ontario Partnership is all about: getting more homes built faster while creating strong, connected communities for Canadians."
Jennifer McKelvie, Parliamentary Secretary to the Minister of Housing and Infrastructure and Member of Parliament for Ajax
"Across Ontario, there is a need for critical infrastructure and housing of all types to support our fast-growing communities. Our government is tremendously appreciative of partners like Vaughan, who took early action to reduce development charges and kickstart the local housing sector. Together, we will continue building on this momentum."
Rob Flack, Minister of Municipal Affairs and Housing
"Making life more affordable for Vaughan residents is a top priority. Vaughan has been at the forefront of addressing housing affordability by taking decisive action to reduce development charges and lower the costs that too often get passed on to homebuyers. I want to thank Premier Ford, Minister Rob Flack and the Government of Canada for recognizing the leadership Vaughan has shown and for supporting our city through the Canada--Ontario Development Charge Reduction Program. This funding represents an important step toward a more collaborative approach to building the infrastructure needed to support responsible growth. At the City of Vaughan, we will continue taking bold action to get more homes built, create more good-paying construction jobs and make home ownership more attainable for young families, while ensuring Vaughan remains a place where residents and families can live, grow and thrive for generations to come."
Steven Del Duca, Mayor of Vaughan
"The next generation deserves the dream of homeownership just like generations before them. Ontario is taking action by cutting development charges by up to 50 per cent or more through the DCRP and removing the HST on new homes, immediately lowering costs by as much as $230,000 in cities like Vaughan. Ontario is proud to deliver an unprecedented level of funding to the City of Vaughan as we work together to reduce development charges, part of our plan to make housing affordable and communities more livable for every family. We are proud to announce our government's funding will deliver the widening of Huntington Road, Kirby Road and Teston Road between Pine Valley Drive and Kleinburg Summit Way to four lanes."
Stephen Lecce, Member of Provincial Parliament for King--Vaughan
"Today's announcement represents a significant step forward in making housing more affordable, improving community infrastructure, and creating new good-paying job opportunities for the people of Vaughan. As Ontario faces attacks on our economy from President Trump's unjust tariffs, our government, in partnership with federal and municipal leaders, is meeting the challenge directly and putting in the work to protect Ontario."
Michael Tibollo, Member of Provincial Parliament for Vaughan--Woodbridge
"Our government is taking action to make homeownership more attainable while ensuring communities have the infrastructure they need to grow. By reducing development charges and investing in critical infrastructure, we are helping unlock new housing opportunities right here in Thornhill, lowering costs for homebuyers, and supporting the construction of complete communities where families can live, work and thrive."
Laura Smith, Member of Provincial Parliament for Thornhill
"The Building Industry and Land Development Association (BILD) welcomes the announcement today by the Federal and Provincial governments and the City of Vaughan on the funding of $697.2 million and the reduction of development charges by 50 per cent for three years under the Development Charges Reduction Program (DCRP). This change will improve new housing project economic viability, resulting in increased housing supply and mix to meet the needs of growing communities, and will help support the hundreds of thousands of jobs in the residential and non-residential construction sectors in Ontario."
Dave Wilkes, President and CEO, Building Industry and Land Development Association (BILD)
Quick Facts
- Development charges could be eliminated from February 25, 2026 to October 31, 2027 for residential developments in Vaughan that meet certain criteria, including completing physical foundation milestones prescribed by the Canada Mortgage and Housing Corporation. Specifically, "at-grade" foundations for low-rise developments, or the lowest level foundation for mid- to high-rise developments.
- Funding through the DCRP will support vital housing-enabling infrastructure projects, such as water/wastewater systems, roads, bridges, transit, fire stations and police detachments, along with community features to establish and enrich neighbourhoods like libraries or recreation centres.
- Federal funding for the projects is subject to the signing of the Canada-Ontario BCSF bilateral agreement, as well as federal review and approval of project funding.
- Receipt of the funding, and confirmation of approved projects, will be subject to the City of Vaughan entering into a Transfer Payment Agreement with Ontario and complying with program requirements.
- Municipalities must contribute a minimum of 10 per cent of project costs as part of the DCRP.
- Of 444 municipalities in Ontario, more than 200 currently levy development charges
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Web: Housing, Infrastructure and Communities Canada
SOURCE Department of Housing, Infrastructure and Communities
Contacts: For more information (media only), please contact: Arianna Durgerian, Press Secretary, Office of the Minister of Housing and Infrastructure, [email protected]; Media Relations, Housing, Infrastructure and Communities Canada, 613-960-9251, Toll free: 1-877-250-7154, Email: [email protected]; Hannah Jensen, Premier's Office, [email protected]; Michael Minzak, Minister Flack's Office, [email protected]; Communications Branch, [email protected]
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