TORONTO — Federal, provincial and municipal leaders announced a new multi-billion-dollar partnership Monday aimed at lowering housing costs, accelerating construction and expanding transit infrastructure in the Greater Toronto Area.
Prime Minister Mark Carney, Ontario Premier Doug Ford and Toronto Mayor Olivia Chow jointly unveiled the agreement at a housing development site in Etobicoke, describing it as a coordinated effort to address housing supply and affordability challenges.
The deal includes $8.8 billion in funding shared between Ottawa and Queen’s Park to support housing-enabling infrastructure and reduce development charges, which governments say have contributed to rising construction costs.
Carney said development charges across Ontario will be reduced by half for three years under the agreement, with governments offsetting lost municipal revenue through long-term infrastructure funding.
“Development charges have become a major hurdle in the housing market,” Carney said, adding the reductions are intended to lower upfront costs for builders and homebuyers.
The federal government also confirmed a tax measure that removes both the GST and Ontario’s portion of the HST on new homes valued up to $1 million, with partial rebates for homes up to $1.85 million. Officials said the combined tax relief could save buyers up to $130,000.
Ford said the agreement is part of a broader effort to stimulate economic growth and protect Ontario’s economy amid external pressures, including U.S. trade policies.
“By lowering taxes and fees that make new homes more expensive, we can get more shovels in the ground across Ontario,” Ford said.
The province will prioritize funding for municipalities that agree to reduce development charges, while encouraging others to follow suit.
Chow said Toronto has already reduced hundreds of millions of dollars in development charges and accelerated permitting timelines to encourage new construction.
“With today’s partnership, we can go further,” Chow said, adding the measures could lead to thousands of new housing starts in the near term.
In addition to housing measures, the three governments committed funding for major transit projects, including the Waterfront East light rail line, which will connect Union Station to the city’s eastern waterfront. The project is expected to serve up to 150,000 residents and workers and support new housing development.
Officials also highlighted ongoing work on regional transit expansions, including GO Transit upgrades and subway extensions across the Greater Toronto and Hamilton Area.
The announcement took place at “The Stella,” a purpose-built rental project that will include 725 units, with more than 200 designated as affordable housing. The development was cited as an example of collaboration between governments and private developers.
Carney described the broader initiative as part of a “team Canada” approach to housing, emphasizing cooperation across jurisdictions and with the private sector.
All three leaders said additional agreements under the federal “build communities strong” fund are expected in the coming months.