On June 1st, 2026, the Right Honourable Mark Carney, Prime Minister of Canada and Member of Parliament for Nepean, announced in his riding the launch of the $8.8 billion Canada-Ontario Municipal Development Charge Reduction Program, a landmark partnership designed to slash the cost of building new homes and accelerate housing construction across Ontario.
The announcement took place at the headquarters of Caivan, a Canadian homebuilding company based in Nepean. The Prime Minister was joined by Gregor Robertson, Minister of Housing and Infrastructure; Rob Flack, Ontario Minister of Municipal Affairs and Housing; Peter Bethlenfalvy, Ontario Minister of Finance; and Mark Sutcliffe, Mayor of Ottawa.
The new program encourages municipalities to reduce development charges, helping lower the upfront costs of building new homes while supporting the infrastructure needed to accommodate growing communities.
As part of the initiative, the Government of Canada is eliminating the 13 per cent HST on newly built homes in Ontario valued at up to $1 million, making homeownership more affordable for Canadians. The measure was first announced in March 2026, with the Municipal Development Charge Reduction Program officially opening for applications on June 1st.
Under the agreement, municipalities that reduce development charges by at least 30 per cent will be eligible to access the $8.8 billion infrastructure fund over the next 10 years. The program will also support reductions in development charges of up to 50 per cent for three years, helping remove barriers to new housing construction in one of Canada's fastest-growing provinces.
Prime Minister with Gregor Robertson, Minister of Housing and Infrastructure; Rob Flack, Ontario Minister of Municipal Affairs and Housing; Peter Bethlenfalvy, Ontario Minister of Finance; and Mark Sutcliffe, Mayor of Ottawa, while touring the headquarters of Caivan in Nepean on June 1st, 2026.
“Our new partnership with Ontario is about building more affordable homes, more transit, and more careers in the skilled trades" said Prime Minister Carney. "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.”
In March 2026, Ontario and Canada agreed to a cost-matched structure 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.
More than 200 of Ontario's 444 municipalities currently levy development charges. Through this application-based program, participating municipalities will contribute a minimum of 10 per cent toward eligible project costs, with federal and provincial governments providing matching infrastructure investments.
Prime Minister with Gregor Robertson, Minister of Housing and Infrastructure; Rob Flack, Ontario Minister of Municipal Affairs and Housing; Peter Bethlenfalvy, Ontario Minister of Finance; and Mark Sutcliffe, Mayor of Ottawa, while touring the headquarters of Caivan in Nepean on June 1st, 2026.
The federal government will deliver their cost-matched portion of the funding for the program. Funding under the Canada–Ontario Municipal Development Charge Reduction Program will be delivered through a bilateral agreement between Canada and Ontario under the Build Communities Strong Fund. The governments also announced that additional funding through the Canada–Ontario Partnership to Build will be made available for rural, small, and northern municipalities, with further details to be announced.
Applications for the Municipal Development Charge Reduction Program are now open, with more information available here, marking another step in the federal government's commitment to increase housing supply, lower construction costs, and make homeownership more affordable for Canadians.