Prime Minister Carney secures new partnership with Ontario to cut taxes on housing and boost supply
March 30, 2026
Toronto, Ontario
The global economy is rapidly changing, and many Canadians are feeling the effects at home – including growing pressure on housing and infrastructure. In response, Canada’s government is focused on what we can control: building a more resilient economy by increasing housing supply, investing in modern and reliable infrastructure, and creating high-paying careers for Canadians.
Today, the Prime Minister, Mark Carney, alongside the Premier of Ontario, Doug Ford, announced a new partnership between Canada and Ontario to build more affordable homes, infrastructure, and transit. This partnership will reduce taxes and fees for a home in Ontario by up to $200,000.
To boost housing supply for Canadians and lower costs, the federal and Ontario governments will:Lower development charges: The federal government and Ontario will cost-match a total of $8.8 billion over 10 years, focused on housing-enabling infrastructure projects. This funding will support the reduction of municipal development charges by up to 50%. These reductions will be in place for three years and target municipalities covering 80% of the province’s population. This new infrastructure funding will offset much of the financial impact of development charge reductions on municipalities. However, municipalities will also be expected to support development charge reductions, so that all three levels of government are supporting increased housing supply and affordability. The province will work with municipalities to put forward a list of infrastructure projects for approval with a focus on speed and efficiency. Development charges are a major upfront cost that can delay or prevent new housing projects. Lowering these upfront costs will help accelerate construction and build more homes. This marks the federal government’s first partnership through the Build Communities Strong Fund.
Tax relief for homebuyers: Building on the elimination of the GST for first-time homebuyers last year, through this partnership, the full 13% of the HST will be removed for new homes in Ontario valued up to $1 million, saving buyers up to $130,000 on the purchase of their home. This maximum rebate of $130,000 would be maintained for new homes valued up to $1.5 million, and would decrease proportionally from $130,000 at $1.5 million to a maximum of $24,000 for homes valued at $1.85 million and above. This would apply to eligible agreements signed between April 1, 2026, and March 31, 2027. The Ontario government estimates this measure will deliver nearly $2.2 billion in tax relief, support an additional 8,000 housing starts next year, create up to 21,000 jobs, and contribute $2.7 billion to Ontario’s GDP.
To jointly advance transit infrastructure projects to support growing communities, cut commute times, and connect people to careers and housing, Canada and Ontario are collaborating on projects that include:Waterfront East transit line: Three-way partnership between the federal government, the Ontario government, and the City of Toronto to build the transit line serving Toronto’s eastern waterfront, including the East Bayfront and Port Lands. The line will serve more than 150,000 people, support over 50,000 daily trips, and is expected to enable 75,000 housing units.
GO 2.0: Commit to working collaboratively to increase passenger service across the Greater Golden Horseshoe region.
ALTO High-Speed Rail (HSR): Support the planning and advancement of the Alto HSR initiative that will connect millions of people living along the Toronto-Québec City corridor.
Advancing work on five major transit projects in the Greater Toronto and Hamilton Area: The Ontario Line, Eglinton Crosstown West Extension, Scarborough Subway Extension, Yonge North Subway Extension, and Hamilton Light Rail Transit.
As we deliver on these projects, the governments of Canada and Ontario will prioritise domestic suppliers, content, and materials through Canada’s new Buy Canadian Policy. This approach will strengthen domestic demand, protect Canadian workers and industries, stabilise supply chains, and build a more resilient economy.
By working in partnership with Ontario, the federal government is helping build more affordable homes and transit, while creating thousands of careers in the skilled trades. We are taking control and building the future we want for ourselves so we can build Ontario strong to build Canada strong.
Quotes
“Our new partnership with Ontario is about building more affordable homes, more transit, and more careers in the skilled trades. 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.”
— The Rt. Hon. Mark Carney, Prime Minister of Canada
“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. 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.”
— The Hon. Doug Ford, Premier of Ontario
“Our government’s key investments in infrastructure and housing will help remove barriers to homebuilding and home ownership. This partnership with Ontario will mean more housing supply and more affordable homes – and make a real difference for Ontarians.”
— The Hon. Gregor Robertson, Minister of Housing and Infrastructure and Minister responsible for Pacific Economic Development Canada
Quick factsDevelopment charges – the fees charged to developers to fund the infrastructure required to support new homes, such as water mains, roads, parks, and facilities– are a major hurdle in the housing market. In recent decades, they have been growing at an unsustainable rate, increasing the cost of every new home, compressing margins, and stalling new builds. Further details on the agreement to lower development charges will be provided by the Government of Ontario.
The federal government will explore additional opportunities to partner with Ontario and other jurisdictions to convert good, vacant, or not fully constructed units into affordable housing options.
Under the provincial and territorial stream of the Build Communities Strong Fund, provinces will be required to cost-match federal investments and take action to reduce the cost of construction, including through reductions to development charges where they pose a barrier to housing construction. More details on the Fund will be released very soon.
On March 26, 2026, the government introduced Bill C-26, An Act to authorize certain payments to be made out of the Consolidated Revenue Fund for the purpose of improving housing supply. This proposed legislation seeks to immediately provide $1.7 billion to provinces and territories to implement measures to increase Canada’s housing supply.
Build Canada Homes is Canada’s new federal agency with the mandate to scale the supply of affordable housing. By leveraging public land, flexible financial tools, and modern methods of construction, the agency is catalysing a more productive and innovative homebuilding industry.
The Buy Canadian Policy was first announced as part of a broader suite of strategic measures to support Canadian workers and businesses in sectors most impacted by U.S. tariffs and trade disruptions.
