TORONTO — The City of Toronto, Province of Ontario and Government of Canada have announced Toronto is receiving up to $1.5 billion because of its “commitment to reduce development charges by 40 to 60 per cent for more than three years.”
The funding is part of the Development Charge Reduction Program, announced by the federal and provincial governments on March 30. It’s meant to be a mechanism to help municipalities reduce development charges while continuing to invest in infrastructure.
According to a release, the city worked with the province to identify eligible housing-enabling infrastructure projects and successfully secured $1.5 billion in funding over 10 years.
The funding will support projects already approved through the city’s 10-Year Capital Plan, including transit capacity, water and wastewater infrastructure and road network expansion.
The funding will also reduce the city’s reliance on development charge revenues, enabling it to implement development charge reductions of 40 to 60 per cent between 2026 and 2029, depending on the unit type.
In March, the Province of Ontario and the Government of 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, the release adds.
Funding is being 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.
Because of this funding announcement for Toronto, the city says it is launching a new phase of its Purpose-Built Rental Housing Incentives Stream using city resources. The program provides an indefinite deferral of development charges for projects that include a minimum of 20-per-cent affordable housing.
The first phase of the program, launched in fall 2024, supported more than 8,000 rental homes, including more than 2,000 affordable homes, the release notes. The second phase of the program will support up to 10,000 new rental homes, including a minimum of 2,000 affordable rental homes. The city will prioritize shovel-ready projects, with applications being reviewed and approved on a rolling basis in the coming weeks and months.
