Ontario and Canada investing $1 billion in housing infrastructure for municipalities

Ontario and Canada are partnering to invest $1 billion in housing-enabling infrastructure for municipalities that don't collect development charges — a move aimed at lowering the upfront costs that can add tens of thousands of dollars to new homes.

The money is split equally: Ontario is contributing $500 million through its Municipal Housing Infrastructure Program (MHIP), and Canada is adding $500 million through the federal Build Communities Strong Fund (BCSF). The funding will support critical projects like roads, bridges, and water systems that enable new housing while protecting existing supply.

Applications from eligible municipalities will open October 29, 2026, with projects selected in the spring. Officials say the barrier to housing development in many communities — especially rural, small, and northern ones — is the cost of building and upgrading infrastructure. "We know that many municipalities are dealing with repair backlogs, higher construction costs, and limited funding sources for critical infrastructure projects," Ontario's acting infrastructure minister Todd McCarthy said.

The announcement builds on a broader Canada-Ontario agreement signed in March that included $8.8 billion in housing-enabling infrastructure funding. A separate Development Charge Reduction Program delivers money to municipalities that reduce development charges and maintain those reductions for at least three years. Together, these initiatives are saving up to $200,000 on the cost of new homes, according to the government.

Robin Jones, president of the Association of Municipalities of Ontario, called the move significant for communities historically underserved by infrastructure investment programs.