Ontario and the federal government have signed a sweeping new agreement aimed at accelerating home construction, expanding transit and lowering costs for buyers, with both levels of government committing $8.8 billion over 10 years to support housing-enabling infrastructure.
Premier Doug Ford and Prime Minister Mark Carney announced the Canada-Ontario Partnership to Build on Monday, describing it as a joint effort to address housing affordability and economic uncertainty.
“Today’s agreement will be transformational for Ontario and Canada, delivering new homes, transit and infrastructure and supporting hundreds of thousands of good-paying jobs for Ontario workers,” Ford said. “Our government will continue to deliver on our plan to protect Ontario in partnership with the federal government and municipalities by lowering the cost of building, getting shovels in the ground faster, cutting red tape and investing in workers.”
Carney said the deal targets multiple pressures facing Canadians, particularly housing supply and affordability.
“Our new partnership with Ontario is about building more affordable homes, more transit and more careers in the skilled trades,” he said. “We’re tackling the housing crisis from every angle — so we can build up housing supply and bring down costs for Canadians. We’re building Ontario strong and Canada strong.”
A central element of the agreement is funding to reduce municipal development charges — fees widely seen as a barrier to new construction — by up to 50 per cent. Governments say the funding will offset financial impacts on municipalities while encouraging faster project approvals and increased housing supply.
The agreement also includes significant tax relief measures for homebuyers. The province and Ottawa plan to remove the full 13 per cent harmonized sales tax on new homes valued up to $1 million, while extending rebates for homes valued up to $1.5 million. Officials estimate the combined measures could deliver about $2.2 billion in tax relief and reduce costs for buyers by as much as $130,000.
In a separate statement, the federal government said the broader package could lower overall taxes and fees on a new home in Ontario by up to $200,000, while supporting thousands of new housing starts and jobs.
The partnership also outlines joint support for major transit projects across the Greater Toronto and Hamilton Area, including the Waterfront East transit line, expanded GO service and planning for a high-speed rail corridor between Toronto and Quebec City.
Toronto Mayor Olivia Chow welcomed the agreement, pointing to its impact on housing and infrastructure in the city.
“I’m pleased to join with the federal and provincial governments in this partnership to build more housing, transit and support good jobs,” Chow said. “The City of Toronto has taken bold steps to cut development charges on new homes, speeding up our development timeline and investing in affordable housing. Further, we have invested in the design of the Waterfront East Transit line. Today’s historic announcement takes our work further and will deliver thousands more affordable homes and better transit, benefiting our city for generations.”
Both governments say the agreement is part of a broader strategy to strengthen the economy amid global uncertainty, including U.S. tariffs, while prioritizing domestic labour and materials for infrastructure projects.
