On March 30, the Ontario provincial government and the Canadian federal government signed a partnership to build several public projects.
Detailed in a press release from the Ontario government, the partnership includes plans to fund the construction of three major transit projects as well as implement changes to the tax system that the province says will meet a “shared commitment to boosting housing supply.”
The partnership plans to provide funding for the Toronto Waterfront East Transit LRT, which is slated to connect to recently built housing in Toronto’s port lands.
Additionally, funding has been allocated for GO 2.0, a transit plan announced by the Ford government this year that seeks to expand the existing GO transit rail network by building a “freight rail bypass along the highway 407 corridor in Peel region.”
The last transit project mentioned in the partnership is the Alto highspeed rail project, in which Canada’s official Leader of The Opposition, Pierre Poilievre, called for the immediate cancellation of.
The partnership agreement sees both the province and the federal government commit to “working collaboratively to support the planning and advancement of the Alto HSR initiative.”
Commitments were also made to priority transit projects including the Eglington, Younge and Scarborough LRT and Subway extensions, funding for the Hamilton LRT and funding for the Ontario line.
The partnership also agreed to a “harmonized sales tax (HST) rebate on new homes.” The goal behind harmonizing the tax rate is to remove the 13 per cent HST on new homes in Ontario for “eligible buyers”.
New homes that would be considered for the harmonized tax rate would need to have a maximum value of $1 million. The maximum rebate an eligible buyer can expect would be approximately $130,000 for a “new home valued between 1 million and 1.5 million” Canadian dollars.
The province states that the federal government will “provide Ontario a payment in the amount of $875 million, subject to the passage of federal legislation.” This agreement is expected to provide up to $2.2 billion in tax relief for new housing across the province.
A press release from the Prime Minister’s Office stated that the partnership is expected to reduce “municipal development charges by up to 50 per cent.” The federal government has stated that according to the agreement, these reductions are expected to “be in place for three years and target municipalities covering about 80 per cent of the provinces population.”
Both the provincial and federal governments have stated that they expect the municipalities to support “development charge reductions, so that all three levels of government are supporting increased housing supply and affordability.”
The partnership with Ontario marks the federal governments first agreement made “through the Build Communities Strong Fund.”
Prime Minister Mark Carney was quoted saying, “our partnership with Ontario is about building more affordable homes, more transit and more careers in the skilled trades. We’re tackling the housing crisis from every angle […] we’re building Ontario strong and Canada strong.”
Premier Doug Ford stated that “our government will continue to deliver on our plan to protect Ontario in partnership with the federal government and municipalities by lowering the cost of building, getting shovels in the ground faster, cutting red tape and investing in workers.”
The partnership is expected to total $8.8 billion in investment.