New Non-DC Stream targets municipalities locked out of development charge funding
Canada and Ontario have announced a joint $1-billion investment to help municipalities without development charge revenue build the infrastructure needed to support new housing.
The funding targets roads, bridges, and water systems in smaller, rural, and northern communities that have been largely left out of the government's broader housing push.
The funding is split evenly, with Ottawa contributing $500 million through the Build Communities Strong Fund (BCSF) and Ontario matching that figure through its Municipal Housing Infrastructure Program (MHIP), pending a bilateral agreement.
Applications open to eligible municipalities on October 29.
The new Non-Development Charge Municipalities Stream (Non-DC Stream) closes a gap in the $8.8-billion Canada-Ontario Partnership to Build, announced in March by Prime Minister Carney and Premier Ford to slash development fees by up to 50%. That framework primarily targeted urban and suburban jurisdictions with access to development charge revenue.
Municipalities that do not levy those charges, which includes all 37 member municipalities of the Northwestern Ontario Municipal Association (NOMA), had no comparable mechanism to access comparable support.
"As we continue to navigate economic uncertainty and unwarranted US tariffs, our government is protecting Ontario by investing in critical infrastructure that drives growth, creates jobs, and strengthens communities," said Todd McCarthy, Ontario's acting minister of infrastructure.
Rick Dumas, NOMA president, said the investment would create conditions to unlock new housing and protect existing homes in communities where aging infrastructure backlogs have long constrained growth.
"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," Dumas said.
Filling the gap for rural and northern communities
Robin Jones, Association of Municipalities of Ontario (AMO) president and mayor of Westport, welcomed the announcement as a recognition of "the unique pressures facing rural, small and northern communities."
The Ontario government said the MHIP has, since its 2024 launch, supported approximately 800,000 new homes and protected approximately 375,000 existing homes across the province.
An analysis from Royal Bank of Canada suggests Canada's housing market recovery remains uneven, while Sarah Albert of Premiere Mortgage Centre reports renewed buyer activity and strong demand for quality listings in New Brunswick.https://t.co/7F9YgjkiCI
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What this means for housing supply and buyers
Broker reaction to development charge reform has been measured since the Partnership to Build was first unveiled. Toronto-based broker Matthew O'Neil of Connolly Capital previously told Canadian Mortgage Professional that government-backed relief does not automatically translate to lower prices for buyers.
"The problem with pre-con pricing is that even after this new rebate, it's still priced way higher than resale," O'Neil said.
The combined package — the Non-DC Stream, the Development Charge Reduction Program, and Ontario's expanded HST relief on new homes — could reduce costs for homebuyers by up to $200,000 in certain jurisdictions, both governments said.
Toronto's recent 60% reduction in development charges, backed by $1.5 billion in federal funding, illustrates the scale of what infrastructure investment can unlock, though municipal uptake and builder pass-through remain the critical variables.
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