To the Point for the Week of March 29, 2026
To the Point for the Week of March 29, 2026
We’re pleased to bring you this week’s edition of To the Point a little earlier than our usual Saturday-morning cadence, as many of our readers pause to observe Easter and Passover over the coming days. From all of us at ONpoint Strategy Group, we wish those who celebrate a meaningful weekend filled with time to reflect, and to reconnect with family, friends, and the spirit of the occasion.
We’re going to kill two birds with one stone this week and keep it short and sweet. The province and the feds combine forces to slash development charges in what has been touted as a historic and welcomed agreement.
A PARTNERSHIP TO BUILD
The most significant political story in Ottawa and Queen’s Park this week was the signing of a new “historic” Canada–Ontario Partnership to Build, framed as a “transformational” push to build more affordable homes, fund housing related infrastructure, and help communities grow.
The agreement formalizes the Harmonized Sales Tax (HST) rebate on new homes. Both governments committed to collaboratively remove the 13% HST for eligible buyers of new homes in Ontario valued at up to $1 million. For homes valued between $1 million and $1.5 million, the maximum rebate is $130,000. Practically, that means the federal government agreed to a one-time $875 million payout (subject to the passage of federal legislation) that can be applied against the 5% federal portion of the HST on new homes. In aggregate, the move is expected to provide $2.2 billion in total tax relief for housing in Ontario, with individual homebuyers able to receive up to $130,000 in tax relief, depending on the value of the home.
On transit, the federal government, the province and the City of Toronto will cost share the Waterfront East LRT line serving Toronto’s eastern waterfront, while the federal government will execute contribution agreements for previously announced transit projects, including the Ontario Line, Eglinton Crosstown West Extension, Scarborough Subway Extension, Yonge North Subway Extension and Hamilton LRT. The partnership also commits the federal and Ontario governments to work collaboratively to increase passenger service along freight owned corridors across the Greater Golden Horseshoe region and to support the planning and advancement of the ALTO high speed rail (HSR) initiative connecting Toronto to Quebec City.
The most significant and consequential element of the agreement is the $8.8B in federal and provincial funding over 10 years for municipal housing enabling infrastructure projects. But it is more than a blank cheque. To be eligible, municipalities must first reduce development charges by 30%–50% for three years and then submit requests for funding tied to priority infrastructure projects (for example, water, wastewater and roadways) that enable new housing supply. The caveat for municipalities is that they are expected to share in the sacrifice by reprioritizing and co funding essential projects, rather than relying solely on this new bucket of money.
Builder groups like BILD, OHBA and CHBA have heralded the agreement as historically significant and argue that the move could potentially double housing starts over the course of a municipality’s three-year reduction of development charges. It also reduces hard construction and transaction costs that will make projects more viable and supports the pre-construction market by lowering the bar to move projects forward.
Taken together, homebuyers stand to benefit from the market conditions this agreement is designed to create. More supply, lower taxes and cheaper projects should, in principle, translate into more opportunities for new homebuyers. However, the real impact will depend heavily on local market dynamics and on how aggressively municipalities use the new tools announced this week.
As we’ve said before, there are no solutions, only trade-offs. In this case, municipalities would have to commit to cutting DCs for three years, making the reductions time-limited and doing little to address the structural reliance on DCs to fund infrastructure buildouts. The limited scale of the policy also leaves a significant revenue gap for municipalities.
Politically speaking for Premier Ford, the agreement is a significant win. The agreement spreads the political responsibility for homebuilding among three levels of government. By tying funding to DC cuts, Ford is essentially putting the ball in the court of municipalities and challenging them to step up and deliver on their end of the bargain.
Moreover, the initiative fosters a perception that the Premier is taking small but meaningful steps to course correct from the sharp decline in housing starts that derailed the Premier’s 1.5M homes by 2031 target, a goal that has since been walked back. Combine the provisions outlined in the Canada-Ontario Partnership to Build with Bill 98, Building Homes and Improving Transportation Infrastructure Act, and you get effective policy changes that leverage every lever at the province’s disposal. For example, Bill 98 has solid provisions around the standardization of Official Plans, streamlining site plan consultation, and enhanced development standards and site-plan rules that alter how environmental and design requirements are applied.
Bill 98 is not designed to be flashy or sold as a gamechanger. Instead, it focuses on small but meaningful changes that are largely welcomed by industry. The snag for the Premier is the perception that, while incremental tweaks help, the bigger challenge is change management: how quickly these reforms translate into actual homes on the ground. In other words, the changes are welcome, but the clock is ticking. A long implementation timeline is both politically and economically risky for the Premier and the province.
And now Queen’s Park is also moving to change who makes the big regional decisions. Today’s governance bill, Better Regional Governance Act, doesn’t add new housing tools; it rearranges who holds the steering wheel in key regions. In combination with Bill 98 and the $8.8B Partnership to Build, the Better Regional Governance Act is meant to make it easier for Queen’s Park aligned regional chairs to push housing and infrastructure decisions through. Whether that results in more homes will depend less on the statute and more on who holds those new “strong chair” powers.
The biggest political winner out of this new partnership is Prime Minister Mark Carney. An injection of $4.4B in federal funds to incentivize a reduction in development charges largely insulates Ottawa from responsibility for how the details play out on the ground. The feds cut the cheque, municipalities implement the DC reductions, and the Prime Minister gets to claim credit for fulfilling a campaign promise to take meaningful action to get homes built. At the same time, the deal helps deflect attention from the federal government’s other flagship housing program, Build Canada Homes, announced in early January, which has faced criticism for delivering relatively few, relatively expensive units. Instead of acting as a direct builder, this agreement recasts the federal government as the funder of the conditions for homes to be built at scale. The remaining political risk for Carney is that if housing starts do not rebound, he will still share the blame for another big dollar announcement that failed to move the needle.
HST relief, more transit infrastructure, and incentives for municipalities to reduce development charges are small but meaningful measures to help quickly jump start housing construction. However, what’s missing from the announcement this week are detailed program guidelines that will help municipalities decide which infrastructure projects to submit for funding, how much development charges will be reduced, and how much the program will subsidize their capital commitments under infrastructure plans. Signals from the province and feds indicate that the partnership scope may be broadened to smaller market municipalities with smaller development charges relative to larger markets like the Greater Toronto Area.
While the Canada-Ontario Partnership to Build takes direct aim at development charges, it leaves room for municipalities to introduce other fees or revenue generating policies that are not development charges by name but function similarly in practice. For example, Sault Ste. Marie, although it has zero development charges and offers incentives like tax breaks or direct financial support to lower upfront costs for builders, is preparing a new parkland dedication bylaw that would increase what developers must provide as parkland or cash in lieu. The bylaw would apply to a broader range of development and redevelopment projects.
Sault Ste. Marie’s new bylaw exposes the structural flaw of the federal provincial partnership. While the Prime Minister and the Premier are selling the partnership as a collaborative effort to cut taxes and fees on new homes, municipalities still have strong incentives to recover lost revenue elsewhere. In other words, the policy lowers costs on paper, but doesn’t guarantee they stay down in practice.
We are hopeful that the partnership announcement represents a meaningful, collaborative, and concerted effort to address structural issues around housing construction. It is our hope that further measures are being explored to prevent the exploitation of loopholes or work arounds that would undermine the shared objective for all levels of government to build more homes.
Christopher Mourtos, writing on behalf of ONpoint Strategy Group
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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, 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.