Ontario Government Partners with Republic Developments and Harlo Capital on Scarborough Junction Project

📅 4 days ago

The Government of Ontario has made a significant equity investment in the Scarborough Junction project, marking a pivotal moment for affordable housing in the Greater Toronto Area.

After a year of deliberation, Toronto's Republic Developments and Harlo Capital have announced a new chapter for their ambitious Scarborough Junction project. Instead of pursuing an outright sale, the two firms have entered into a joint venture with the Government of Ontario, which is set to invest $178 million through the Building Ontario Fund. This Crown agency, which was established in 2024, aims to stimulate projects that have previously faced delays. The Ontario government emphasized that this investment is crucial for advancing a project that had stalled, indicating a commitment to revitalizing underused spaces in the region.
The Building Ontario Fund's investment is part of a broader strategy to reinvest in various sectors after the initial capital is repaid. This includes six priority areas: affordable housing, energy, transportation, long-term care, municipal and community infrastructure, and critical minerals. Earlier in the year, the Fund allocated $300 million to a $1.3 billion initiative led by High Art Capital, aimed at converting unsold condos in the Greater Toronto Area into rental units.
Ontario’s Minister of Finance, Peter Bethlenfalvy, articulated the government's vision, stating, "To support our plan to protect Ontario, our government is delivering long-term affordable housing in a rapidly growing area of the Greater Toronto Area." He highlighted the innovative financing tools employed through the Building Ontario Fund to unlock housing supply that would have otherwise remained unavailable.
Michael Fedchyshyn, CEO of the Building Ontario Fund, reiterated the organization’s mission on LinkedIn, expressing that the investment reflects a responsible use of public capital to catalyze projects that would not have proceeded without such support. He emphasized the benefits of this initiative, which include the introduction of new rental options, long-term affordability, and the revitalization of underutilized land in Scarborough.
The Scarborough Junction project is strategically located just west of the Scarborough GO Station, bordered by St. Clair Avenue East to the north, a railway corridor to the east, commercial properties to the south, and Danforth Avenue to the west. Encompassing 26.24 acres, the site includes 11 legal parcels currently occupied by warehouses, a large sports complex, and various commercial buildings.
Approved plans for the site entail the construction of 7,655 residential units, totaling 5,398,796 square feet of living space across 12 towers ranging from 19 to 58 storeys. Additionally, the project will incorporate 206,191 square feet of commercial space, 3,478 parking spaces, and 425 new trees, with 15% of the area allocated as parkland. The development application process began in 2020, with revisions made in 2022, followed by a settlement with the City of Toronto in February 2024 after navigating the Ontario Land Tribunal appeal process.
The project was initially listed for sale last May by a team from Colliers, but Republic Developments' President & CEO, Matt Young, clarified that their original business plan involved zoning and selling the land, with the possibility of forming a joint venture if the right circumstances arose. This collaboration with the Building Ontario Fund represents a significant evolution in their strategy.
Young expressed optimism about the partnership, stating, "Building Ontario Fund’s investment represents a bold and innovative partnership that we believe can become a model for how transformative housing projects are delivered in Canada." He underscored the project's ambition to create a master-planned community focused on affordability and connectivity, indicating a bright outlook for the future of Scarborough.

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