Canada’s new government is cutting taxes on housing and boosting supply in Ontario
The global economy is rapidly changing, and many Canadians are feeling the effects at home – including growing pressure on housing and infrastructure. In response, Canada’s government is focused on what we can control: building a more resilient economy by increasing housing supply, investing in modern and reliable infrastructure, and creating high-paying careers for Canadians.
Today, the Prime Minister, Mark Carney, alongside the Premier of Ontario, Doug Ford, announced a new partnership between Canada and Ontario to build more affordable homes, infrastructure, and transit. This partnership will reduce taxes and fees for a home in Ontario by up to $200,000.
To boost housing supply for Canadians and lower costs, the federal and Ontario governments will:
- Lower development charges: The federal government and Ontario will cost-match a total of $8.8 billion over 10 years, focused on housing-enabling infrastructure projects. This funding will support the reduction of municipal development charges by up to 50%. These reductions will be in place for three years and target municipalities covering 80% of the province’s population. This new infrastructure funding will offset much of the financial impact of development charge reductions on municipalities. However, municipalities will also be expected to support development charge reductions, so that all three levels of government are supporting increased housing supply and affordability. Development charges are a major upfront cost that can delay or prevent new housing projects. Lowering these upfront costs will help accelerate construction and build more homes. This marks the federal government’s first partnership through the Build Communities Strong Fund.
- Tax relief for homebuyers: Building on the elimination of the GST for first-time homebuyers last year, through this partnership, the full 13% of the HST will be removed for new homes in Ontario valued up to $1 million, saving buyers up to $130,000 on the purchase of their home. This maximum rebate of $130,000 would be maintained for new homes valued up to $1.5 million, and would decrease proportionally from $130,000 at $1.5 million to a maximum of $24,000 for homes valued at $1.85 million and above. This would apply to eligible agreements signed between April 1, 2026, and March 31, 2027. The Ontario government estimates this measure will deliver nearly $2.2 billion in tax relief, support an additional 8,000 housing starts next year, create up to 21,000 jobs, and contribute $2.7 billion to Ontario’s GDP.
To jointly advance transit infrastructure projects to support growing communities, cut commute times, and connect people to careers and housing, Canada and Ontario are collaborating on projects that include:
- Waterfront East transit line: Three-way partnership between the federal government, the Ontario government, and the City of Toronto to build the transit line serving Toronto’s eastern waterfront, including the East Bayfront and Port Lands. The line will serve more than 150,000 people, support over 50,000 daily trips, and is expected to enable 75,000 housing units.
- GO 2.0: Commit to working collaboratively to increase passenger service across the Greater Golden Horseshoe region.
- ALTO High-Speed Rail (HSR): Support the planning and advancement of the Alto HSR initiative that will connect millions of people living along the Toronto-Québec City corridor.
- Advancing work on five major transit projects in the Greater Toronto and Hamilton Area: The Ontario Line, Eglinton Crosstown West Extension, Scarborough Subway Extension, Yonge North Subway Extension, and Hamilton Light Rail Transit.
As we deliver on these projects, the governments of Canada and Ontario will prioritise domestic suppliers, content, and materials through Canada’s new Buy Canadian Policy. This approach will strengthen domestic demand, protect Canadian workers and industries, stabilise supply chains, and build a more resilient economy.
By working in partnership with Ontario, the federal government is helping build more affordable homes and transit, while creating thousands of careers in the skilled trades. We are taking control and building the future we want for ourselves so we can build Ontario strong to build Canada strong.