Canada and Ontario Launch Housing Partnership to Cut Taxes and Boost Supply

Mark Carney and Doug Ford have announced a new partnership between Canada and Ontario aimed at lowering housing costs and accelerating the construction of new homes across the province.

The announcement was made in Toronto as both governments introduced a coordinated strategy to reduce taxes on new homes, invest in housing infrastructure and expand major transit systems.

Under the new partnership, federal and provincial authorities say homebuyers could see taxes and development related costs reduced by as much as two hundred thousand dollars on new homes in Ontario.

A key part of the plan focuses on lowering municipal development charges that often increase the cost of building new housing projects.

The two governments will jointly provide 8.8 billion dollars in funding over the next decade to support housing related infrastructure projects. This investment will allow municipalities to reduce development charges by up to fifty percent for a period of three years.

Officials say the reduced upfront costs for developers are expected to speed up construction timelines and help increase the number of homes being built across the province.

The new funding initiative will primarily target municipalities that represent about eighty percent of Ontario’s population.

Another major component of the agreement introduces tax relief for homebuyers purchasing newly built homes.

Through the partnership, the full thirteen percent Harmonized Sales Tax will be removed for new homes valued up to one million dollars. Buyers could save up to one hundred and thirty thousand dollars through this measure.

Homes priced up to one point five million dollars will continue to receive the maximum rebate while the benefit gradually decreases for properties valued up to one point eight five million dollars.

The tax relief program will apply to eligible home purchase agreements signed between April 1, 2026 and March 31, 2027.

Ontario officials estimate the measure could generate nearly two point two billion dollars in tax relief while supporting approximately eight thousand additional housing starts next year.

The initiative is also expected to create as many as twenty one thousand new jobs while contributing about two point seven billion dollars to the provincial economy.

Beyond housing, the partnership also focuses on expanding transportation infrastructure to support rapidly growing communities.

Among the major projects included is the Waterfront East transit line in Toronto, which will serve neighbourhoods along the eastern waterfront including the East Bayfront and Port Lands districts.

The proposed transit corridor is expected to serve more than one hundred fifty thousand residents and support over fifty thousand daily trips once completed.

Officials say the project could also help enable the construction of seventy five thousand housing units in surrounding areas.

The governments also confirmed cooperation on expanding regional rail service through the GO 2.0 initiative across the Greater Golden Horseshoe region.

Planning support is also being provided for the ALTO high speed rail project that aims to connect cities along the Toronto to Quebec City corridor.

Additional transit projects advancing under the partnership include the Ontario Line, Eglinton Crosstown West Extension, Scarborough Subway Extension, Yonge North Subway Extension and the Hamilton Light Rail Transit system.

Both governments say domestic suppliers and Canadian made materials will be prioritized under the national Buy Canadian policy as the projects move forward.

Federal and provincial leaders say the partnership reflects a broader strategy to strengthen housing supply, improve transportation networks and support long term economic growth while creating thousands of skilled trade jobs across Ontario and the rest of Canada.

Courtesy Prime Minister of Canada