The governments of Ontario and Canada are investing $1 billion to help municipalities, that do not levy development charges, build more homes. The funding is being provided through a new Non-Development Charge Municipalities Stream (Non-DC Stream) made possible by the Canada-Ontario Partnership to Build. These funds will help eligible municipalities build and renew critical infrastructure, such as roads, bridges and water systems that enable new housing and protect the existing housing supply, while supporting lower home costs for families across the province.
"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."
In March 2026, Canada and Ontario signed an historic agreement that included $8.8 billion in funding to build housing enabling infrastructure while lowering municipal development charges that can add tens of thousands of dollars to the cost of new homes. As part of this agreement, Canada and Ontario committed to reserve funding for municipalities that do not levy development charges, in recognition of their infrastructure needs and their decision to not use this revenue tool. Through the new Canada-Ontario Partnership to Build program, Ontario is investing $500 million through the provincial Municipal Housing Infrastructure Program (MHIP) and Canada is investing $500 million through the federal Build Communities Strong Fund (BCSF) to help non-DC levying municipalities build critical infrastructure projects.
"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."
The Canada-Ontario Partnership to Build also supports the Development Charge Reduction Program, which delivers funding to support housing-enabling and community infrastructure projects in municipalities that reduce and maintain the reductions in development charges (DCs) for at least three years, as well as enabling Ontario's expanded HST relief on new homes. Together, these measures are saving up to $200,000 on the cost of new homes.
"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."
Applications for the Non-DC Stream will open for eligible municipalities on October 29, 2026, with additional intakes to be announced at a later date.
Quick Facts
- In August 2025, Ontario increased the MHIP to $4 billion to speed up construction of homes and core infrastructure such as roads and water systems.
- Since its launch in 2024, the MHIP has supported approximately 800,000 new homes and protected approximately 375,000 existing homes.
- The MHIP is comprised of five funding streams:
Quotes
"It is crucial that we support our communities and their growth and well-being through investments such as this new funding stream. The Non-DC Stream will allow municipalities to build the infrastructure needed to support the housing demand and lower costs for both municipalities and residents."
- Jennifer McKelvie, Parliamentary Secretary to the Minister of Housing and Infrastructure, Member of Parliament for Ajax
"Across rural Ontario, building homes starts with reliable infrastructure, from sturdy bridges to roads built for tough Canadian winters. For communities that do not collect development charges, this $1 billion stream delivers the targeted funding needed to clear backlogs, upgrade water systems and expand critical roads. By directly funding the infrastructure that enables housing, we are protecting existing homes, driving economic growth and improving quality of life across rural Ontario."
- Lisa Thompson, Minister of Rural Affairs
"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."
- Robin Jones, Association of Municipalities of Ontario (AMO) President, Mayor of Westport
"This $1 billion investment is a significant win for municipalities across Northwestern Ontario and recognizes the unique realities facing small, rural, remote, and Northern communities. None of NOMA's 37 member municipalities collect development charges, yet they still face significant costs to build and renew roads, bridges, water systems, and other critical infrastructure required to support housing and community growth. This investment will help create the conditions to unlock new housing, protect existing housing, and build stronger, more sustainable communities. We thank the Governments of Canada and Ontario for recognizing these challenges and making this important investment in the future of our communities."
- Rick Dumas, Northwestern Ontario Municipal Association (NOMA) President
"Rural Ontario is ready to grow, and our members have big plans for their communities. But the dual challenge of renewing aging infrastructure and building for growth can make it hard to keep pace. This funding will help rural municipalities make the investments needed to support their communities today and prepare for the opportunities ahead."
- Christa Lowry, Rural Ontario Municipal Association (ROMA) Chair, Mayor of Mississippi Mills
"FONOM welcomes this $1-billion investment for municipalities that do not levy development charges. This funding recognizes the financial realities of small, rural and Northern communities and will help our members build the roads, bridges, water and wastewater infrastructure needed to support new housing and protect existing homes. We thank Ontario and Canada for listening and providing a more equitable funding opportunity for Northern municipalities to prepare for growth."
- Dave Plourde, Federation of Northern Ontario Municipalities (FONOM) President
"This funding will help Small Urban Municipalities redevelop existing infrastructure and build new infrastructure to grow the housing infrastructure that our province needs. We appreciate the Provincial and Federal Governments attention to this financial need."
- Jamie McGarvey, Ontario Small Urban Municipalities (OSUM) Chair, Mayor of the Town of Parry Sound
"OHBA is pleased to see Ontario and Canada make this significant investment in the critical infrastructure communities need to support housing and growth. Providing a dedicated opportunity for municipalities that do not levy development charges to access this funding recognizes that there is no one-size-fits-all approach to funding growth. This additional $1 billion investment through the Build Communities Strong Fund and Municipal Housing Infrastructure Program will help more communities unlock land, support new housing and ensure infrastructure is in place when and where it is needed. Investments in roads, bridges and water systems are essential to building new homes, protecting existing communities and supporting sustainable growth across Ontario."
- Scott Andison, Ontario Home Builders' Association (OHBA) CEO
"Investment in critical infrastructure is essential for Ontario's economic development and prosperity. Today's announcement provides the tools for municipalities to continue delivering transportation projects while promoting housing growth across the province."
- Walid Abou-Hamde, Ontario Road Builders' Association (ORBA) Chief Executive Officer
"Addressing Ontario's housing challenge requires supporting growth in communities of every size. This is a smart investment by the province, as it recognizes that expanding water, wastewater and other critical infrastructure in small and medium-sized municipalities is as important to unlocking new housing and creating opportunities for economic growth as investing in major urban centres. Building infrastructure capacity across Ontario ensures more communities can contribute to the province's long-term growth."
- Patrick McManus, Ontario Sewer & Watermain Construction Association (OSWCA) Executive Director
"This $1 billion investment is welcome news for rural communities across eastern Ontario. Building more homes requires the infrastructure to support them, and investments in roads, bridges and water systems will help municipalities unlock housing growth while renewing the infrastructure that existing residents rely on. We are pleased to see our Ontario and Canada government partners working together to support infrastructure in rural communities."
- Bonnie Clark, Eastern Ontario Wardens' Caucus (EOWC) Chair
"This investment is welcome news for rural and small municipalities across Western Ontario. By recognizing communities that do not levy development charges, the governments of Ontario and Canada are helping ensure municipalities have equitable access to the infrastructure funding needed to support housing growth. Investments in critical infrastructure, including roads, bridges, water and wastewater systems, are fundamental to building more homes, creating strong and complete communities, and ensuring Western Ontario remains Ontario's economic engine."
- Warden Marcus Ryan, Chair, Western Ontario Wardens' Caucus (WOWC)
"Engineering expertise is the foundation of safe, sustainable housing and community infrastructure. The Ontario Society of Professional Engineers congratulates the collaborative efforts of the Governments of Ontario and Canada for the joint $1 billion investment to support municipalities that do not levy development charges. By directing resources to essential public works, such as roads and water systems, this investment will accelerate housing creation while safeguarding existing homes. Professional engineers are ready to partner with municipalities to ensure these projects are designed and delivered to the highest standards, delivering value for taxpayers and long-term benefits for all residents."
- Sandro Perruzza, ICD.D, CRSP, CEO, Ontario Society of Professional Engineers (OSPE)
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