Province Backs Transit-Oriented Development Expected to Deliver 1,700 Rental Homes Near Scarborough GO Station
Building Ontario Fund Partnership Revives Previously Stalled Scarborough Junction Project
The Ontario government is investing up to $178 million through the Building Ontario Fund (BOF) to support the construction of approximately 1,700 new rental homes in Scarborough, including a target of 340 affordable units with below-market rents.
Announced by the Ministry of Finance on June 3, the investment will help advance the Scarborough Junction project, a large-scale transit-connected community planned on underused land near the Scarborough GO Station. The broader development is expected to eventually include approximately 7,700 homes, along with parks, public spaces, and community amenities linked to the regional transit network.
The province said the funding is intended to accelerate housing construction in the Greater Toronto Area, where population growth and housing shortages continue to place pressure on affordability and rental supply.
“To support our plan to protect Ontario, our government is delivering long-term affordable housing in a rapidly growing area of the Greater Toronto Area,” said Peter Bethlenfalvy, Minister of Finance. “Through the Building Ontario Fund, we are leveraging innovative financing tools to unlock rental housing supply that otherwise would not be delivered and transforming underused land into a vibrant transit-connected community.”
The equity investment is being made through a joint venture involving the Building Ontario Fund, Republic Developments, and Harlo Capital. According to the province, the partnership is helping move forward a project that had previously stalled due to market conditions and financing challenges.
Once the Building Ontario Fund’s investment has been repaid, the government said the capital will be reinvested into future infrastructure projects across six priority sectors, including affordable housing, transportation, energy, municipal infrastructure, long-term care, and critical minerals.
Housing Demand Continues to Rise Across the Greater Toronto Area
Ontario officials said the investment comes as the Greater Toronto Area is projected to add at least 1.7 million residents by 2051, increasing pressure on housing supply and affordability.
The government noted that the project is expected to support construction employment while increasing the availability of purpose-built rental housing near major transit infrastructure. Construction is scheduled to begin in 2027, with first occupancies anticipated by 2030.
“We need to get more housing of all types built across the province, faster and smarter,” said Rob Flack, Minister of Municipal Affairs and Housing. “That is why we have introduced a series of measures to reduce the time and cost of building, including the expansion of the HST rebate, the introduction of the Development Charge Reduction Program, and transformational legislative reforms through Bills 17, 60 and 98. Despite this work, we know our job isn’t done; and this investment through the Building Ontario Fund is bringing housing online at a time when it is much-needed.”
The province added that the Scarborough Junction investment builds on broader housing affordability measures introduced through the Development Charge Reduction Program, part of the Canada-Ontario Partnership to Build. The partnership is expected to deliver up to $8.8 billion in combined federal and provincial funding over a 10-year period for housing-enabling infrastructure projects.
Affordable Housing Commitments Included in Project Plan
According to the government, the development will include a minimum target of 20 per cent affordable rental units secured at below-market rents for 40 years. Officials said these affordability targets were established to align with eligibility requirements under City of Toronto affordable housing programs.
The Building Ontario Fund said its role is to work alongside institutional investors and development partners to close financing gaps that may otherwise prevent critical infrastructure projects from moving forward.
“Scarborough Junction shows the role Building Ontario Fund can play in getting housing built when market conditions make it difficult to move projects forward,” said Michael Fedchyshyn, CEO of the Building Ontario Fund. “Our investment helps unlock this transformative development, secure long-term affordable homes, and deliver real, lasting benefits for the community.”
Private-sector partners involved in the project described the development as a potential model for future mixed-use housing projects in Canada.
“Building Ontario Fund’s investment represents a bold and innovative partnership that we believe can become a model for how transformative housing projects are delivered in Canada,” said Matt Young, CEO of Republic Developments. “This first-of-its-kind partnership has helped unlock the opportunity to build one of the most ambitious and thoughtfully designed master-planned communities in the country, centered around affordability, connectivity, and long-term community building. We’re incredibly excited about what this means for the future of Scarborough.”
Jeffrey Kimel, CEO of Harlo Capital, said the project’s proximity to transit infrastructure is expected to make the community attractive to both families and individual renters.
“We’re excited to partner with Building Ontario Fund to advance our vision of delivering a vibrant mixed-use community for Ontario residents,” said Kimel. “With its prime location and proximity to transit, including the Scarborough GO Station, we believe this neighbourhood will be highly attractive to both individuals and families alike. Our partnership with BOF creates a clear path to begin construction and deliver new affordable homes in the near term.”
Ontario Transportation Minister Prabmeet Sarkaria also linked the project to the province’s broader transit expansion strategy.
“Under the leadership of Premier Ford, our government is investing close to $70 billion in the largest transit expansion in North America and the largest subway expansion in Canadian history,” Sarkaria said. “Building affordable housing near fast, reliable transit is a key part of our plan to protect Ontario by building a stronger, more resilient and self-reliant economy.”