The City of Toronto will receive $1.5 billion through the Development Charge Reduction Program (DCRP) in recognition of its commitment to lowering development charges by 40 to 60 per cent, depending on unit type, for a period of more than three years. The funding is intended to accelerate homebuilding, support community infrastructure, and advance the province’s plan to protect Ontario by investing in projects that drive economic growth and keep workers employed.
“Our government is doing everything we can to lower costs for families, keep workers on the job and get shovels in the ground faster on new homes,” said Premier Doug Ford. “Combined with our historic 13 per cent cut to the HST on new homes, today’s agreement will lower the cost of building new homes by more than $200,000 in Toronto, getting more shovels in the ground and creating thousands of good-paying construction jobs in the process.”
Toronto estimates that reducing development charges and investing in housing‑enabling infrastructure will unlock more than 44,000 new housing units and deliver roughly $1.95 billion in relief for homebuilders. The city expects development charge reductions to generate approximately $83,000 in savings on the construction of a new single or semi‑detached home. These reductions will take effect following Toronto City Council approval and must remain in place for at least three years.
“People should be able to afford a home in our city. Today’s announcement will make that easier while creating tens of thousands of good jobs in Toronto,” said Mayor Chow. “Through our strong partnership with the provincial and federal government, we’re reducing the cost of building new homes and ensuring the city can keep investing in the infrastructure we need to support communities.”
Development charge rates would be reduced as follows:
- 60 per cent reduction — single and semi‑detached homes; apartments and multi‑unit homes with two or more bedrooms; and dwelling rooms.
- 40 per cent reduction — studio and one‑bedroom apartments and multi‑unit homes, including condos and rental units.
Subject to further due diligence, the DCRP will provide Toronto with up to $1.5 billion to support infrastructure projects that unlock housing across the city, including:
- New buses to meet current and future ridership demand
- Modernized Line 2 signalling to enable more frequent service
- Expanded watermains serving the Lower Don Lands and south Leslieville
- Traffic improvements on St. Clair West between Keele Street and Old Weston Road
- Support for the Liberty Village New Street project
- Reconstruction of the Scarlett Road railway overpass
- Widening Steeles Avenue East from Tapscott Road to Ninth Line
- Revitalizing John Street to create a pedestrian‑oriented corridor between Front Street and Stephanie Street
- Extending Broadview Avenue south at Eastern Avenue
- A new road connection extending Tradewind Avenue north to Sheppard Avenue East via Bonnington Place
In March 2026, Ontario and Canada agreed to a cost‑matched structure providing $8.8 billion over 10 years for infrastructure investments, with the federal share delivered through the Build Communities Strong Fund. The fund, launched this year, aims to accelerate infrastructure projects and reduce costs nationwide. Both governments also agreed to remove the full HST on new homes from April 1, 2026, to March 31, 2027, saving homebuyers up to $130,000 in addition to DCRP‑related savings.
As part of the Canada‑Ontario Partnership to Build, the DCRP will deliver funding over 10 years for housing‑enabling infrastructure. Priority will go to municipalities that reduce development charges for all residential types by 30 to 50 per cent or more and maintain those reductions for at least three years.
“The Building Industry and Land Development Association and its members applaud the announcement by the City of Toronto, the Government of Ontario and the Government of Canada on the reduction of development charges in the City of Toronto by 40 to 60 percent for the next three years,” said Dave Wilkes, President and CEO, Building Industry and Land Development Association. “The leadership shown by this first, historic announcement under the Development Charge Reduction Program, enabled by the Canada-Ontario Partnership to Build will significantly increase housing project viability in the city, increasing residential construction activity, supply, economic activity and will protect jobs.”
“This is a major step forward for Toronto. Significantly lower development charges will help unlock investment in new purpose-built rental housing, make more projects viable and send a powerful message that Ontario’s capital is ready to build,” added Tony Irwin, President and CEO, Federation of Rental-housing Providers of Ontario. “The federal, provincial and municipal governments are demonstrating real leadership by addressing one of the most significant costs facing new housing. More viable rental projects mean more supply and, over time, greater affordability for Toronto renters.”
For more information, visit Ontario and Canada Making Homes More Affordable in Toronto | Ontario Newsroom
