Ontario and Canada Open Applications for New Development Charge Reduction Program
$8.8 billion federal-provincial funding program will support housing-enabling infrastructure projects in municipalities that substantially reduce and maintain development charges
The Ontario government is opening applications for a new program that is intended to reduce building costs and speed up the construction of new homes. As part of the up to $8.8 billion partnership announced in March, the Development Charge Reduction Program (DCRP) will deliver federal and provincial funding over 10 years for housing-enabling infrastructure projects, with funding prioritized for municipalities that reduce development charges for all residential types by 30 per cent to 50 per cent or greater and maintain the reductions for at least three years.
In March 2026, Ontario and Canada agreed to a cost-matched structure to provide a combined $8.8 billion over 10 years for infrastructure investments in Ontario, with Canada’s share of the funding flowing through the Build Communities Strong Fund’s Provincial and Territorial stream, pending an agreement under this Fund. The Build Communities Strong Fund was launched by the federal government earlier this year to accelerate infrastructure projects across the country to reduce costs.
“The Development Charge Reduction Program will make a life-changing difference for families in municipalities across Ontario by lowering the cost of new homes by tens of thousands of dollars,” said Rob Flack, Ontario’s Minister of Municipal Affairs and Housing. “Along with the HST relief announced in Ontario’s 2026 budget, this program will make homes across the province more affordable. I encourage municipal leaders across Ontario to work with us to reduce development charges so we can get more shovels in the ground and keep the dream of homeownership alive in Ontario.”
Applications will be assessed based on:
- percentage of committed DC rate reduction (minimum 30-50 per cent reduction)
- number of homes projected to build as a result of proposed DC relief
- the municipality’s financial contribution
Housing-enabling projects would be prioritized with consideration for the number of homes enabled by the project. Municipalities are strongly encouraged to be as ambitious as possible in their DC rate reductions to secure as much funding as possible for their communities.
The Development Charge Reduction Program is made possible by the Canada-Ontario Partnership to Build, which was announced in March 2026. This partnership also supports Ontario’s temporary expanded HST relief on new homes, which will save homebuyers up to $130,000 off the cost of a new home.
“Together, we’re building Ontario and Canada strong,” said the Honourable Gregor Robertson, Minister of Housing and Infrastructure and Minister responsible for Pacific Economic Development Canada. “This joint partnership with Ontario will speed up housing construction by lowering up front costs and investing in housing-enabling infrastructure projects – building strong, resilient communities that boost housing supply and drive economic opportunities.”
As of June 1, 2026, eligible municipalities can apply for funding through the DCRP. The deadline to apply is June 19th, 2026. Timelines for the DCRP are intended to coincide with the enhanced HST rebate in order to maximize relief for home builders and home buyers.
“With global economic and trade uncertainty continuing to put pressure on hardworking Ontarians, our government is delivering real relief by reducing the cost of building homes through the Development Charge Reduction Program” said Peter Bethlenfalvy, Ontario’s Minister of Finance. “With up to $8.8 billion in provincial and federal funding, this investment will speed up housing construction and improve affordability while also helping municipalities deliver critical housing-enabling infrastructure in our growing communities.”
Funding through the Canada-Ontario Partnership to Build will also be made available for rural, small and northern municipalities, with more details to be announced at a later date.
Quick Facts
- Of 444 municipalities in Ontario, more than 200 currently levy development charges.
- The DCRP is an application-based program, with municipal contributions set at 10% of project costs at a minimum.
- The federal government will deliver their cost-matched portion of the funding for the DCRP under the Build Communities Strong Fund, for which Ontario will enter into a bilateral funding agreement.
