ORILLIA, Ontario — October 16, 2026 — The governments of Ontario and Canada have announced up to $11.3 million in infrastructure funding for the City of Orillia, tied to a three-year reduction in residential development charges aimed at lowering construction costs and encouraging new housing development.
The funding, provided through the Development Charge Reduction Program (DCRP), will support improvements to municipal wastewater infrastructure while helping the city accommodate an estimated 2,025 new homes.
Orillia to Reduce Development Charges by 50 Per Cent
Under the agreement, Orillia has committed to reducing development charges by 50 per cent across all residential housing types from March 30, 2026, to March 31, 2029.
Development charges are fees municipalities collect from developers to help finance infrastructure required for new construction. Reducing these charges can lower upfront building costs and improve the financial viability of residential projects.
Provincial estimates indicate that the reduction could save builders up to $15,791 per home.
“As communities across Ontario continue to grow, they need the right infrastructure in place to support new homes and the families who will call them home,” said Graydon Smith, Associate Minister of Municipal Affairs and Housing. “Through the Development Charge Reduction Program, we’re working with our federal and municipal partners to lower the cost of building new homes while investing in the infrastructure communities like Orillia need to remain great places to live, work and raise a family.”
Combined Housing Incentives Could Deliver Savings of $145,791
The development charge reduction will operate alongside expanded Harmonized Sales Tax (HST) relief for eligible newly constructed homes.
Ontario and Ottawa have agreed to provide relief on the full HST for qualifying new homes between April 1, 2026, and March 31, 2027.
The tax measure could provide savings of up to $130,000 for eligible buyers. Combined with the estimated development charge reductions, the governments say potential savings could reach $145,791 per home.
Actual savings will depend on property eligibility, construction costs and the extent to which lower development expenses are reflected in selling prices.
Wastewater Treatment Expansion Central to Infrastructure Funding
The proposed $11.3 million allocation will support the expansion and modernization of Orillia’s existing Wastewater Treatment Centre.
The project is intended to increase infrastructure capacity and accommodate additional residential development as the municipality grows.
“This $11.3 million investment through the DCRP is welcome news for our city,” said Don McIsaac, Mayor of Orillia. “As the community continues to grow, this funding will help support the infrastructure needed to meet current and future housing demands. We thank the province for its ongoing commitment to strengthening municipalities across Ontario.”
Funding Subject to Government Agreements and Approvals
The allocation remains conditional on several administrative requirements, including a signed Canada-Ontario Build Communities Strong Fund agreement, further government reviews and an Ontario-municipal Transfer Payment Agreement.
Participating municipalities must also contribute at least 10 per cent of eligible project costs.
The broader federal-provincial infrastructure partnership, announced in March 2026, provides for a combined $8.8 billion in cost-matched investments over 10 years.
Construction Industry Welcomes Development Charge Reductions
Housing industry organizations have supported the initiative, arguing that lower municipal fees could help developers advance projects facing rising construction and financing costs.
“We’re thrilled to see this funding for the City of Orillia, to support the families hoping to call it home. Reducing development charges is about making it possible to get more homes built, at prices more families can afford. OHBA has been clear that reducing the cost of delivering new homes will take meaningful action; the DCRP program continues to accomplish that,” said Scott Andison, CEO of the Ontario Home Builders’ Association.
The DCRP prioritizes municipalities that reduce residential development charges by at least 30 to 50 per cent and maintain those reductions for three years or longer.
More than 200 of Ontario’s 444 municipalities currently levy development charges.
Orillia Housing Supply Expected to Benefit
Orillia estimates that the combined effect of lower development charges and expanded infrastructure capacity could enable 2,025 additional homes.
The projected development would support housing construction activity while potentially expanding options for buyers and renters.
However, the anticipated homes remain a municipal estimate rather than confirmed construction starts.
The initiative represents part of Ontario’s broader strategy to address housing supply constraints by combining municipal fee reductions with infrastructure investment and targeted tax relief.
For Orillia, the next steps will involve securing the required funding agreements and advancing wastewater infrastructure improvements needed to support future residential growth.
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