To the Point for the Week of August 17th, 2025
The Premier touted infrastructure dollars as a housing win at AMO, but is it putting shovels in the ground? The Prime Minister did what many suggested he do from the outset of the trade war.
ONTARIO
Ford Announces Infrastructure Ammo at Amo
The ONpoint team was in full force at the 2025 Association of Municipalities of Ontario Annual Conference this week in our nation's capital. We engaged with hundreds of elected officials from all levels of government as well as municipal administrators and stakeholders from various industries and sectors across Ontario. Our presence wasn't limited to the conference floor as our ad truck cruised down the streets of Ottawa letting conference goers know that whilereceptions are nice, getting results is better.
As we were busy representing our clients' interests, so too were elected officials, including Premier Ford who announced a $1.6B injection into the Municipal Housing Infrastructure Program (MHIP). The figure represents an almost doubling of the program to a total of $4B, which is made up of four separate infrastructure funding programs: the Housing-Enabling Water Systems Fund; Housing-Enabling Core Services Fund; Health and Safety Water Stream; and the Agriculture and Irrigation Stream. The MHIP represents the largest infrastructure investment aimed at enabling housing the province has ever undertaken.
The Premier touted this additional investment as another tool in the toolbox to get housing built in Ontario. According to the government, the MHIP has enabled the construction of 800,000 new homes since its inception in 2024, with help from the $1.2B Building Faster Fund. That 800,000 represents just over half of the 1.5M homes the province committed to building by 2031. By that logic, it took only one year to get halfway to the 1.5M goal, and with six years remaining, one might extrapolate that the province is going to blow past their goal. Bing, bang, boom. Housing crisis solved, right?
Au contraire.
The MHIP's impact on actual housing construction remains uncertain and potentially limited, since infrastructure represents only one piece of a much larger puzzle. "Homes enabled" is a theoretical exercise. It doesn't translate into housing starts. Of course, the infrastructure the MHIP is designed to enable is critical to building housing. The 800,000 number touted by the province represents potential supply. Moreover, with most MHIP streams launched only in the past 12-20 months – some as recently as this spring – expecting measurable housing outcomes may be premature, given that infrastructure completion and subsequent housing development typically takes five to seven years.
The MHIP does not address the most critical market bottlenecks facing housing. Approval delays and rising development costs add significant delays and costs to housing. The average municipal approval process is anywhere from 21-34 months while taxes and fees on new homes have risen 30%-36% since 2020, which risks offsetting the MHIP's benefits for housing.
High interest rates and a sluggish condo market have reduced investor demand, contributing to a 23.5% decline in traditional housing starts from 2022–2024. These issues could blunt MHIP's impact, as seen in federal programs where infrastructure delivery didn't always lead to proportional housing gains due to "asset-based silos" and coordination gaps.
While MHIP builds pipes and roads, it doesn't tackle the full spectrum of barriers, potentially limiting its translation to starts. In 2024, Ontario only reached 75.8% of the housing target, which suggests infrastructure alone isn't moving the needle on the province's 1.5 million homes by 2031.
Evaluations of similar federal initiatives show that infrastructure programs often succeed in delivery but yield mixed housing results, with outcomes lagging by three to seven years.
It's important to give credit where credit is due. The MHIP is a solid infrastructure program. It appropriately identifies infrastructure bottlenecks, like aging water systems, sewer systems and other servicing infrastructure. And the numbers don't lie: $5.7B has been deployed across 135 identified and approved infrastructure projects. The program is also oversubscribed as municipalities are practically fighting tooth and nail to secure this type of funding.
However, once again, it's not tracking towards more homes being built in the short term. To maximize MHIP's housing potential, the province will need complementary reforms: streamlining municipal approval processes, reducing development charges, and addressing financing barriers that currently override infrastructure improvements. We also need the Federal government to temper immigration so communities can catch up. Premier Ford reportedly expressed his desire to see the federal government remove HST on all new home builds for all home buyers, not just first timers. However, sources suggest the government may be reconsidering this broader HST proposal in favor of more targeted approaches.
FEDERAL
Carney’s Tariff Reversal: Pragmatism or Capitulation?
Prime Minister Mark Carney’s decision to drop Canada’s retaliatory tariffs marks one of his boldest and riskiest pivots since taking office. What’s being billed as an “economic reset” is already generating praise from markets and the business community, but it also leaves Carney exposed politically as critics accuse him of blinking first in his standoff with President Donald Trump.
For the Bank of Canada, the move is a gift. Removing tariffs eases inflationary pressures and gives policymakers more space to cut rates. Desjardins’ Royce Mendes says it helps “quell any lingering concerns” about tariff-driven price spikes, setting up the best-case scenario of inflation staying below 2% until late 2026. BMO’s Doug Porter points to food and sporting goods as categories that will see relief, trimming down sticky core inflation still above 3%. With the benchmark rate stuck at 2.75% and the labour market softening, the central bank gains breathing room for long-awaited easing.
Small businesses are also breathing easier. The Canadian Federation of Independent Business highlighted survey data showing nearly 20% of SMEs were within six months of closure under trade war pressures. As CFIB’s Corinne Pohlmann put it, the change is “a step in the right direction.” But not every sector is popping champagne. Ontario has already lost 38,000 manufacturing jobs in three months, concentrated in steel, aluminum, and auto. With vehicles crossing the border multiple times before completion, Canada’s auto sector remains deeply vulnerable to U.S. tariffs that still stand.
Consumers won’t see much change at the checkout line, since Statistics Canada reported that counter-tariffs never meaningfully drove up inflation in the first place. July inflation came in at 1.7%, below target. But unwinding retaliation could buy Ottawa some goodwill in Washington, which CIBC’s Avery Shenfeld suggests may be the real play. Even if Canadians didn’t feel much tariff pain, showing flexibility could help blunt further escalation.
Politically, the shift is a sharp reversal. On the campaign trail, Carney promised an “elbows up” fight with Trump, warning Canadians that “he’s trying to break us.” Now, he’s leaning into hockey metaphors about “stickhandling” and “putting the puck in the net.” The optics are obvious: this is a 180 from his hard-edged posture, and one that opens him to charges of inconsistency. The opposition has wasted no time. After winning his seat in Battle River—Crowfoot with 0ver 80% of the vote, Pierre Poilievre gave Carney a “D minus,” accusing him of “conceding at every turn,” from shelving the digital services tax to dropping tariffs. The NDP is equally critical, with interim leader Don Davies slamming “one-sided concessions” that enable more U.S. aggression. With Conservatives hammering weakness and New Democrats warning of lost sovereignty, Carney is getting squeezed from both sides.
The public is also split. A Léger-Postmedia poll shows 45% still support dollar-for-dollar retaliation even at the risk of escalation, while 41% now favour a more measured approach. That’s a sharp drop from six months ago, when nearly three-quarters of Canadians backed retaliation. Business groups are leaning pragmatic, but unions like Unifor, led by Lana Payne, say Ottawa is simply enabling more U.S. pressure.
Carney argues that Canada still enjoys the best trade deal in the world with the U.S., pointing to an average tariff rate of 5.6% compared to 16% globally. It’s a useful talking point, but it doesn’t change the power imbalance. U.S. Commerce Secretary Howard Lutnick has been blunt in private: Canadian counter-tariffs were “obstructing negotiations” and had to go without Washington offering anything in return.
The timing is no accident. Consultations on the 2026 CUSMA review begin next month, and Carney is betting that goodwill today will pay off tomorrow. The review process could last up to 18 months, and Ottawa clearly wants to smooth the runway before formal negotiations. But Trump’s track record is explicitly transactional, and concessions rarely flow without leverage.
The bigger reality is that Canada’s strategic options are limited. With three-quarters of exports going south and trade making up a third of GDP, Ottawa simply doesn’t have the room to maneuver. RBC’s Frances Donald warns that if tariffs persist beyond another year, Canada’s growth could flatline entirely. Geography and integration leave Canada vulnerable no matter how much public opinion favours fighting back.
Carney’s tariff reversal is ultimately a case of economic pragmatism colliding with political reality. Markets and small businesses welcome the relief, and the Bank of Canada gets more freedom to cut rates. But politically, the Prime Minister has opened himself to charges that he surrendered leverage for nothing. Whether this gamble pays off depends entirely on whether Washington softens ahead of CUSMA 2026. If it does, Carney can claim strategic foresight. If it doesn’t, history may remember this as a costly retreat dressed up as pragmatism.
ABOUT TO THE POINT
To the Point – ONpoint Strategy Group's weekly roundup – cuts through the noise to deliver insight and analysis of key federal, provincial, and municipal stories shaping Canada's policy and political landscape. Designed for decision-makers and thought leaders, this newsletter is your go-to resource for staying ahead. Share these trusted insights with your network to spark meaningful conversations. Simply hit forward or follow ONpoint Strategy Group on X and LinkedIn to spread these valuable perspectives."
About ONpoint Strategy Group:
ONpoint Strategy Group is all about helping clients make an impact where it counts. Specializing in government relations and strategic execution, our team—Nico Fidani-Diker, Mariana Di Rezze, Krystle Caputo, David Morgado, Christopher Mourtos, Ellen Gouchman, and Brandon Falcone—works closely with clients to navigate complex political landscapes and bring their goals to life. With a practical, results-driven approach, we build strong relationships, craft winning strategies, and make sure every step brings clients closer to meaningful outcomes. We’re passionate about making sure our clients are heard, supported, and positioned for success.
