Prime Minister Carney and Premier Ford Announce Agreement to Reduce Development Charges

Today, Prime Minister Mark Carney and Premier Doug Ford announced a plan to reduce development charges across Ontario, construct the Waterfront East Transit line, advance GO 2.0 and the Alto HSR initiative as well as other transit projects.

In tandem, this afternoon, the Ontario government has introduced the Building Homes and Improving Transportation Infrastructure Act  that focuses on speeding up the construction of new homes and building and improving transit infrastructure.

Highlights

• A federal and provincial agreement to cut municipal development charges on new homes by up to 50% to help stimulate construction across the province.
• Federal funding to offset these reductions will be delivered through the Build Communities Strong Fund, Canada will invest $4.4B, matched by Ontario for a total of $8.8B over 10 years to build housing infrastructure and reduce development charges.
• Builds on a separate federal–provincial agreement announced last week to remove the 13% HST on up to $1 million of the cost of newly built homes.
• Currently, development charges imposed by municipalities can add tens of thousands of dollars to construction costs, posing a barrier to the federal government’s goal of lowering housing prices.
• Advances GO 2.0 to support improved service along existing GO lines and potentially create new GO lines in the Greater Golden Horseshoe.
• Move forward with the Alto HSR initiative to connect people living along the Toronto–Quebec City corridor.
• A three-way cost share between the Ontario government, the federal government and the City of Toronto for the Waterfront East Transit line.
• Ontario’s Building Homes and Improving Transportation Infrastructure Act.
• Establishes a standardized table of contents and limiting land use designations for official plans.
• Creates an expert third-party advisory body consisting of engineering, construction, and code specialists to undertake a section-by-section review of the Ontario Building Code.
• Removes municipal authority to require enhanced development standards.
• Removes development charges from non-profit retirement homes.
• The new public corporation for water and wastewater in Peel Region will remain in public sector ownership.

Analysis

This announcement signals a positive alignment between federal and provincial efforts to tackle housing costs and move forward with key transit projects.

While the reduction in development charges is a meaningful step for builders and prospective homeowners, the real impact will depend on timely, consistent, and transparent implementation across municipalities.

Today’s announcement requires Ontario municipalities to reduce development charges to qualify for funding under the new agreement. Toronto has agreed to do so, but it remains unclear how other municipalities will respond.

With high housing costs continuing to be a nationwide concern, home builders will be on watch to see if Prime Minister Carney makes similar agreements with other Provinces, and when such announcements might be made.

Today’s announcement also highlighted the Ford government’s commitment to transit development. Ottawa and Ontario signaled readiness to finalize funding for major GTHA projects and collaborate on GO 2.0 and the Alto High-Speed Rail. These both boost congestion relief and economic growth as industry and stakeholders monitor potential opportunities to participate. The partnership reinforces Ontario’s leadership in transit infrastructure.

Sussex Strategy Group will continue to monitor these developments closely and provide updates as the situation evolves.