Toronto Secures $1.5 Billion in Funding to Reduce Development Charges and Boost Housing

📅 Today

Toronto has been awarded up to $1.5 billion to reduce development charges significantly over the next few years, as part of a broader initiative to enhance housing availability and infrastructure investment.

The City of Toronto, in collaboration with the Province of Ontario and the Government of Canada, has announced that it will receive up to $1.5 billion as part of its commitment to significantly reduce development charges by 40 to 60 percent over the next three years. This funding initiative is a component of the Development Charge Reduction Program, which was unveiled by the federal and provincial governments on March 30. The program aims to assist municipalities in lowering development charges while still investing in crucial infrastructure projects.
The city worked closely with the provincial government to pinpoint eligible infrastructure projects that would facilitate housing development, successfully securing the substantial funding over a decade. This financial support will be directed towards projects that have already received approval through Toronto's 10-Year Capital Plan. These projects include enhancements to transit capacity, upgrades to water and wastewater infrastructure, and expansions of the road network.
With this new funding, Toronto will be able to lessen its dependency on revenues from development charges. This enables the city to implement reductions in development charges ranging from 40 to 60 percent between the years 2026 and 2029, contingent on the type of housing unit involved. The initiative is part of a broader agreement reached in March, where the Province of Ontario and the Government of Canada established a cost-matched funding structure, committing a total of $8.8 billion over ten years for infrastructure investments throughout Ontario. The federal portion of this funding will be allocated via the Build Communities Strong Fund.
The funding is particularly aimed at municipalities that commit to reducing development charges for all residential types by 30 percent to 50 percent or more, while maintaining these reductions for a minimum of three years. This announcement has prompted the City of Toronto to initiate a new phase of its Purpose-Built Rental Housing Incentives Stream, which will utilize city resources to support affordable housing projects.
This program offers an indefinite deferral of development charges for developments that include at least 20 percent affordable housing. The first phase of this initiative, which launched in the fall of 2024, successfully supported the creation of over 8,000 rental homes, including more than 2,000 units designated as affordable housing.
Looking ahead, the second phase of the Purpose-Built Rental Housing Incentives Stream aims to facilitate the construction of up to 10,000 new rental homes, with a commitment to include at least 2,000 affordable rental units within this total. The city has indicated that it will prioritize projects that are ready to commence, with applications being reviewed and approved on a continuous basis over the coming weeks and months.

Related Posts