WINDSOR, Ontario, The governments of Ontario and Canada have announced up to $84.4 million in infrastructure funding for Windsor and Tecumseh in exchange for reducing municipal development charges over three years, a move intended to lower homebuilding costs and support residential construction across the region.
The funding, provided through the Development Charge Reduction Program (DCRP), will support roads, stormwater systems and sanitary sewer infrastructure. Both municipalities have committed to reducing development charges for all housing types from March 30, 2026, through March 31, 2029.
Windsor to Receive $77.6 Million for Infrastructure Improvements
Windsor will receive up to $77.6 million after committing to reduce development charges by 70 per cent for three years.
The funding will support stormwater management improvements and roadway projects, including widening and extending major transportation corridors.
Provincial estimates indicate the reductions could lower new-home construction costs by up to $49,452 per unit.
“Ontario is growing, and we need to ensure our communities have the housing and infrastructure to keep pace,” said Rob Flack, Minister of Municipal Affairs and Housing. “That is why our government continues to deliver programs like the Development Charge Reduction Program, which helps bring the dream of homeownership within reach for more hardworking Ontario families while positioning communities for growth.”
Windsor Mayor Drew Dilkens said the investment would help unlock thousands of potential housing units while supporting infrastructure required for the region’s planned hospital development.
Tecumseh Secures $6.8 Million for Sewer Infrastructure
Tecumseh will receive up to $6.8 million after agreeing to reduce development charges by 50 per cent during the same period.
The funding will finance new trunk sanitary sewer infrastructure, supporting residential development within the Tecumseh Hamlet Secondary Plan Area.
The municipality estimates the reductions could lower construction costs by up to $18,078 per home.
“For Tecumseh, it provides investment capital for new infrastructure that will support the building of over 700 more homes in the Tecumseh Hamlet Secondary Plan Area. We are grateful for our strong partnership with the Ontario and federal governments further enabled through the Development Charge Reduction Program,” said Gary McNamara, Mayor of the Town of Tecumseh.
Combined Housing Measures Could Deliver Savings of Up to $179,452
The infrastructure announcement follows a March 2026 agreement between Ontario and the federal government to provide a combined $8.8 billion over 10 years for infrastructure investments.
Federal contributions will flow through the Build Communities Strong Fund.
The governments also agreed to provide relief on the full Harmonized Sales Tax for eligible new homes between April 1, 2026, and March 31, 2027.
That measure could save eligible purchasers up to $130,000.
When combined with development charge reductions, the governments estimate potential savings of up to $179,452 in Windsor and $148,078 in Tecumseh.
These figures represent potential combined savings rather than guaranteed reductions in final home purchase prices.
Program Aims to Enable More Than 19,000 Homes
According to the provincial announcement, the combined impact of lower development charges and infrastructure investments could enable 19,263 new homes.
The DCRP prioritizes municipalities that reduce residential development charges by at least 30 to 50 per cent, or more, and maintain those reductions for a minimum of three years.
Municipalities must contribute at least 10 per cent of eligible project costs.
Federal funding remains conditional on a bilateral agreement, project reviews and approvals. Municipalities must also finalize transfer payment agreements with Ontario.
Housing Industry Welcomes Development Charge Reductions
Housing industry representatives have supported the initiative, citing development charges as a significant expense affecting residential project viability.
“Reducing development charges can significantly improve project viability and unlock greater investment in new housing. Programs like this create better conditions for more homes to move forward, including purpose-built rental housing, giving people more choice in where and how they live. We welcome continued collaboration between governments and municipalities such as Windsor and Tecumseh to reduce barriers, support growth and help increase housing supply across Ontario,” said Tony Irwin, President & CEO, Federation of Rental-housing Providers of Ontario.
The program forms part of broader federal-provincial efforts to expand housing supply while financing infrastructure needed to accommodate population growth.
For Windsor and Tecumseh, the initiative provides a funding mechanism intended to support residential development, although its ultimate impact on housing affordability will depend on construction activity and how cost reductions reach buyers.
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