Ontario and Canada Establish Partnership to Build Homes, Transit and Communities
April 20, 2026
Agreement includes $8.8 billion to support housing by lowering development charges and support for major transit projects, including Waterfront East Transit and GO 2.0
The Ontario and federal governments signed the Canada-Ontario Partnership to Build in support of shared goals, including building more homes faster to make housing more affordable, getting shovels in the ground on key transit projects and supporting economic development that will protect jobs and help communities grow, despite the impact of tariffs and economic uncertainty.
The agreement includes $8.8 billion in federal and provincial funding over 10 years to support housing-enabling infrastructure investments for Ontario municipalities that reduce and maintain low development charges (DCs), as well as a Harmonized Sales Tax (HST) rebate to incentivize new home construction, and co-operation and financial support for a number of major transit projects.
A key pillar of the agreement is a shared commitment to boosting housing supply. Ontario and the federal government will cost-match a total of $8.8 billion over 10 years, focused on housing-enabling infrastructure projects. The majority of funding will be used to support the reduction by up to 50 per cent of municipal DCs, which can add hundreds of thousands of dollars to the cost of new homes in Ontario municipalities.
This new infrastructure funding will offset much of the financial impact of DC reductions on municipalities. However, municipalities will also be expected to support DC reductions, so that all three levels of government are supporting increased housing supply and affordability.
The province will work with municipalities and partners to put forward a list of infrastructure projects for approval with a focus on speed and efficiency. These strategic investments will encourage new home construction and reduce barriers and costs to housing development to help more people realize the dream of homeownership.
The Canada-Ontario Partnership to Build commits to the following:
- Harmonized Sales Tax (HST) Rebate on New Homes: Ontario and Canada will work together to remove the full 13 per cent HST for eligible buyers of new homes in Ontario valued up to $1 million and extend the maximum rebate amount of $130,000 to new homes valued between $1 million and $1.5 million. The federal government will provide Ontario a payment in the amount of $875 million, subject to passage of federal legislation, that may be applied against the federal five per cent portion of the HST that is being removed from new homes in Ontario. This partnership would provide an estimated $2.2 billion in total tax relief for housing in Ontario and provide homebuyers up to $130,000 in tax relief.
- Waterfront East Transit: three-way cost share between the Ontario government, the federal government and the City of Toronto to construct the Waterfront East Transit line serving Toronto’s eastern waterfront, including the East Bayfront and Port Lands.
- GO 2.0: commit to working collaboratively to increase passenger service along freight-owned corridors across the Greater Golden Horseshoe region, to support improved service along existing GO lines and the potential creation of new GO lines in the Greater Golden Horseshoe.
- Alto High-Speed Rail (HSR): commit to working collaboratively to support the planning and advancement of the Alto HSR initiative that will connect millions of people living along the Toronto–Quebec City corridor.
- Priority transit projects in the Greater Toronto and Hamilton Area (GTHA): execute federal contribution agreements on announced transit projects, including the Ontario Line, Eglinton Crosstown West Extension, Scarborough Subway Extension, Yonge North Subway Extension and Hamilton LRT.
