Canada, Ontario strike housing deal with tax cuts, $8.8B infrastructure push

Prime Minister Mark Carney and Ontario Premier Doug Ford said in a staememt that the plan would reduce taxes and fees on new homes by up to C$200,000 and accelerate housing supply in the province.

The agreement includes up to C$8.8 billion in joint federal-provincial funding over 10 years to support housing-related infrastructure and enable municipalities to cut development charges by as much as 50% for three years.

Officials said high upfront development costs have been a major barrier to new housing projects, and reducing them is expected to speed up construction.

The plan also includes tax relief for homebuyers, with the removal of the full 13% harmonised sales tax on new homes valued up to C$1 million. Partial rebates will apply to homes valued up to C$1.5 million, with benefits tapering off for higher-priced properties.

The Ontario government estimates the tax measures could deliver about C$2.2 billion in relief, support roughly 8,000 additional housing starts next year and create up to 21,000 jobs.

The agreement also advances several transit projects, including a new waterfront transit line in Toronto, expanded GO rail services and progress on major subway and light rail developments across the Greater Toronto and Hamilton Area.

The government will jointly invest up to C$8.8 billion over 10 years to support housing-related infrastructure. Photo: Freepik

Carney said the partnership aims to address housing affordability by increasing supply and reducing costs. “We’re tackling the housing crisis from every angle,” he said.

Ford said the agreement would help speed up construction and support job creation. "Our government will continue to lower the cost of building and get shovels in the ground faster,” he said.

Officials said the measures are part of a broader effort to strengthen housing supply, improve infrastructure and support economic growth.