The governments of Ontario and Canada are committing $1 billion to help municipalities that do not levy development charges build and renew infrastructure needed to support new housing, including roads, bridges and water systems. The funding will be delivered through a new Non-Development Charge Municipalities Stream under the Canada-Ontario Partnership to Build.
The initiative is aimed particularly at smaller, rural and northern communities that face significant infrastructure costs but do not collect development charges from new construction.
Ontario and Canada Split $1 Billion Infrastructure Investment
The funding will be divided equally between the two governments. Ontario will provide $500 million through its Municipal Housing Infrastructure Program, while the federal government will contribute $500 million through the Build Communities Strong Fund.
Eligible municipalities will be able to use the money for critical infrastructure that supports new housing and protects existing housing supply.
“As we continue to navigate economic uncertainty and unwarranted U.S. tariffs, our government is protecting Ontario by investing in critical infrastructure so we can lower housing costs for Ontario families,” said Todd McCarthy, Acting Minister of Infrastructure. “With $1 billion in federal-provincial funding, the new Non-Development Charge Municipalities Stream will help municipalities deliver more homes, modernize aging infrastructure and build stronger communities.”
Program Builds on March 2026 Housing Agreement
The new stream follows a March 2026 agreement between Canada and Ontario that included $8.8 billion for housing-enabling infrastructure and measures aimed at reducing municipal development charges.
The governments reserved funding for municipalities that do not impose those charges, recognizing that those communities still need substantial infrastructure investment to accommodate housing growth.
“When we initially announced the Development Charge Reduction Program, we made a commitment to non-DC levying municipalities that they too would be able to benefit from the Partnership to Build,” said Rob Flack, Minister of Municipal Affairs and Housing. “The Non-DC Stream will make this a reality, complementing existing programs and legislative reforms, further advancing our efforts to bring the dream of homeownership within reach for more Ontario families.”
Housing Programs Target Infrastructure and Home Costs
The broader Canada-Ontario Partnership to Build also supports the Development Charge Reduction Program, which provides funding for municipalities that reduce development charges and maintain those reductions for at least three years.
Combined with Ontario’s expanded HST relief for new homes, the provincial government says the measures can reduce the cost of a new home by as much as $200,000.
“Together, we’re building Ontario and Canada strong,” said the Honourable Gregor Robertson, Minister of Housing and Infrastructure and Minister responsible for Pacific Economic Development Canada. “By partnering with Ontario, the federal government is helping speed up housing construction by lowering up front costs and investing in housing-enabling infrastructure projects — building strong, resilient communities that boost housing supply and drive economic opportunities.”
Municipal Housing Infrastructure Program Reaches $4 Billion
Ontario increased its Municipal Housing Infrastructure Program to $4 billion in August 2025. Since the program launched in 2024, the province says it has supported infrastructure associated with approximately 800,000 new homes while protecting about 375,000 existing homes.
The program now includes five funding streams covering housing-enabling water systems, core servicing, health and safety water projects, agriculture and irrigation, and municipalities that do not levy development charges.
Municipal organizations welcomed the new funding, arguing that smaller communities face many of the same infrastructure pressures as larger urban centres without access to development-charge revenue.
“Municipalities are on the front lines of building the infrastructure communities need to grow and prosper. This funding recognizes the unique pressures facing rural, small and northern communities and will help municipalities make critical investments that support growth, housing and resilient communities. AMO welcomes this investment and looks forward to continuing to work with provincial and federal partners,” said Robin Jones, Association of Municipalities of Ontario President and Mayor of Westport.
Applications Open October 29
Applications for the Non-Development Charge Municipalities Stream are scheduled to open to eligible municipalities on October 29, 2026. Additional application periods are expected to be announced later.
The $1 billion initiative broadens Ontario and Canada’s housing infrastructure strategy by directing dedicated funding to communities that do not rely on development charges. The governments say investments in roads, bridges, water and wastewater infrastructure are intended to remove barriers to construction while helping municipalities prepare for long-term housing and population growth.