The governments of Ontario and Canada are investing $1 billion to help municipalities that do not levy development charges build more homes.
The funding is being provided through a new Non-Development Charge Municipalities Stream, made possible by the Canada-Ontario Partnership to Build. The funds will help eligible municipalities build and renew critical infrastructure, such as roads, bridges and water systems that enable new housing and protect the existing housing supply, while supporting lower home costs for families across the province.
“As we continue to navigate economic uncertainty and unwarranted U.S. tariffs, our government is protecting Ontario by investing in critical infrastructure so we can lower housing costs for Ontario families,” said Todd McCarthy, acting minister of infrastructure. “With $1 billion in federal-provincial funding, the new Non-Development Charge Municipalities Stream will help municipalities deliver more homes, modernize aging infrastructure and build stronger communities.”
In March 2026, Canada and Ontario signed an historic agreement that included $8.8 billion in funding to build housing-enabling infrastructure while lowering municipal development charges that can add tens of thousands of dollars to the cost of new homes. As part of that agreement, Canada and Ontario committed to reserve funding for municipalities that do not levy development charges, in recognition of their infrastructure needs and their decision not to use that revenue tool. Through the new Canada-Ontario Partnership to Build program, Ontario is investing $500 million through the provincial Municipal Housing Infrastructure Program and Canada is investing $500 million through the federal Build Communities Strong Fund to help non-DC levying municipalities build critical infrastructure projects.
“When we initially announced the Development Charge Reduction Program, we made a commitment to non-DC levying municipalities that they too would be able to benefit from the Partnership to Build,” said Rob Flack, minister of municipal affairs and housing. “The Non-DC Stream will make this a reality, complementing existing programs and legislative reforms, further advancing our efforts to bring the dream of homeownership within reach for more Ontario families.”
The Canada-Ontario Partnership to Build also supports the Development Charge Reduction Program, which delivers funding to support housing-enabling and community infrastructure projects in municipalities that reduce and maintain reductions in development charges for at least three years, as well as enabling Ontario’s expanded HST relief on new homes. Together, these measures are saving up to $200,000 on the cost of new homes.
“Together, we’re building Ontario and Canada strong,” said the Honourable Gregor Robertson, minister of housing and infrastructure and minister responsible for Pacific Economic Development Canada. “By partnering with Ontario, the federal government is helping 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.”
Applications for the Non-DC Stream will open for eligible municipalities on October 29, 2026, with additional intakes to be announced at a later date.
In August 2025, Ontario increased the Municipal Housing Infrastructure Program to $4 billion to speed up construction of homes and core infrastructure such as roads and water systems. Since its launch in 2024, the program has supported approximately 800,000 new homes and protected approximately 375,000 existing homes.
“It is crucial that we support our communities and their growth and well-being through investments such as this new funding stream,” said Jennifer McKelvie, parliamentary secretary to the minister of housing and infrastructure and member of Parliament for Ajax. “The Non-DC Stream will allow municipalities to build the infrastructure needed to support the housing demand and lower costs for both municipalities and residents.”
“Across rural Ontario, building homes starts with reliable infrastructure, from sturdy bridges to roads built for tough Canadian winters,” said Lisa Thompson, minister of rural affairs. “For communities that do not collect development charges, this $1 billion stream delivers the targeted funding needed to clear backlogs, upgrade water systems and expand critical roads. By directly funding the infrastructure that enables housing, we are protecting existing homes, driving economic growth and improving quality of life across rural Ontario.”
“Municipalities are on the front lines of building the infrastructure communities need to grow and prosper,” said Robin Jones, Association of Municipalities of Ontario president and mayor of Westport. “This funding recognizes the unique pressures facing rural, small and northern communities and will help municipalities make critical investments that support growth, housing and resilient communities. AMO welcomes this investment and looks forward to continuing to work with provincial and federal partners.”
