The governments of Ontario and Canada have announced up to $19.6 million in infrastructure funding for St. Thomas, tied to a three-year reduction in municipal development charges aimed at lowering construction costs and supporting the development of more than 6,000 new homes.
Announced on October 15, 2026, the funding will be delivered through the Development Charge Reduction Program (DCRP) and is intended to support a new wastewater treatment facility as the southwestern Ontario city prepares for continued residential and economic growth.
Under the agreement, St. Thomas has committed to reducing development charges by 30 per cent for single-detached homes and multi-unit housing, and by 50 per cent for other residential unit types, from March 30, 2026, through March 31, 2029.
Development Charge Reductions Expected to Lower Housing Costs
The provincial government estimates that the reductions could lower new-home construction costs by up to $5,961 per unit over the three-year period.
Combined with expanded Harmonized Sales Tax (HST) relief on eligible new homes, the measures could generate total savings of up to $135,961 for qualifying homebuyers in St. Thomas.
“Alongside our federal and municipal partners, our government is creating the conditions to ensure communities like St. Thomas can continue to grow and thrive,” said Rob Flack, Minister of Municipal Affairs and Housing. “As MPP for Elgin-Middlesex-London, I am proud of the tremendous quality of life this area has to offer. Investments like this will help St. Thomas continue to grow as a strong, vibrant community where more people can put down roots, build a future and raise a family for generations to come.”
Federal and Provincial Housing Partnership
The 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.
Under the cost-matched arrangement, federal contributions will flow through the Build Communities Strong Fund (BCSF).
Both governments also agreed to provide full HST relief on eligible new homes between April 1, 2026, and March 31, 2027, potentially saving qualifying purchasers up to $130,000.
The tax relief and development charge reductions are separate measures intended to address housing affordability and construction costs.
Wastewater Infrastructure Investment to Support 6,196 Homes
The proposed $19.6 million allocation will support the design and construction of a new wastewater treatment facility in St. Thomas.
Municipal estimates indicate that the combination of lower development charges and infrastructure investment could enable the construction of 6,196 additional homes.
The estimate represents potential housing capacity rather than completed or approved residential units.
Funding Remains Subject to Government Approvals
The funding is conditional on several requirements, including a signed Canada-Ontario BCSF agreement, government due diligence and an Ontario-municipal Transfer Payment Agreement.
Federal project review and approval will also be required before funding is confirmed.
Participating municipalities must contribute at least 10 per cent of eligible project costs.
The DCRP supports infrastructure including water and wastewater systems, roads, bridges, public transit, emergency services facilities, libraries and recreation centres.
Municipal and Construction Industry Leaders Welcome Investment
St. Thomas Mayor Joe Preston said the announcement would help accommodate residential expansion while supporting local economic activity.
“This is exciting news for the City of St. Thomas and another great step forward as our community continues to grow,” said Joe Preston, Mayor, City of St. Thomas. “We want people to be able to find a home here, build a life here and be part of everything that is happening in our city. Reducing development charges will help get more shovels in the ground, create more housing choices and support the people and businesses building our city. We’re grateful to our provincial and federal partners for investing in St. Thomas and helping us build the homes and infrastructure our growing city needs.”
Industry representatives, including the Ontario Home Builders’ Association, the Residential Construction Council of Ontario and the Federation of Rental-housing Providers of Ontario, also welcomed the initiative, emphasizing the importance of reducing construction costs and improving project viability.
Ontario Prioritizes Housing-Enabling Infrastructure
The DCRP prioritizes municipalities that reduce residential development charges by at least 30 to 50 per cent and maintain those reductions for a minimum of three years.
More than 200 of Ontario’s 444 municipalities currently impose development charges.
For St. Thomas, the proposed investment represents an opportunity to expand essential infrastructure while reducing financial barriers to residential construction.
The extent of the program’s impact on housing supply and affordability will depend on final funding approvals, project delivery and the pace of future residential development.
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