Ontario releases plan to boost housing, transit construction

Key Takeaways:

• The Act aims to reduce housing costs and accelerate construction by standardizing and simplifying development charges, building standards, and approval processes across Ontario’s 444 municipalities—addressing long-standing delays and inconsistencies
• Ontario is injecting an additional $400 million into the Housing-Enabling Water Systems Fund (HEWSF) and the Municipal Housing Infrastructure Fund (MHIP), bringing the total to nearly $2.3 billion over four years, to support housing-related water and infrastructure projects that enable the construction of hundreds of thousands of new homes.
• The legislation reflects extensive consultations with municipalities and industry stakeholders like the Ontario Home Builders’ Association, which applauds the focus on reducing development charges and permitting delays—two major contributors to high housing costs in Ontario.

The Whole Story:

Ontario is introducing the Protect Ontario by Building Faster and Smarter Act, 2025to help speed up the construction of new homes and infrastructure, including by streamlining development processes and reducing costs in close partnership with municipalities.

The province is also increasing its investment in housing-enabling infrastructure by adding $400 million in immediate funding to the Housing-Enabling Water Systems Fund (HEWSF) and Municipal Housing Infrastructure Fund (MHIP) for a total of nearly $2.3 billion over four years across the HEWSF and the MHIP.

“We are taking bold action to protect Ontario in the face of economic uncertainty by speeding up construction so we can lower housing costs and keep workers on the job,” said Rob Flack, Minister of Municipal Affairs and Housing. “The legislation we’re tabling today responds to recommendations and requests from municipal leaders, and will help build the homes and infrastructure Ontario needs.”

The Protect Ontario by Building Faster and Smarter Act, 2025, if passed, and related actions would:

• Spur new construction by simplifying and standardizing development charges based on measures that were developed in consultation with municipalities, including measures that some municipalities have already implemented.
  
• Remove barriers for Canadian manufacturers who want to introduce innovative materials, systems and building designs that could reduce construction costs and expedite projects.
  
• Streamline and improve planning and delivery for transit-oriented communities, creating more jobs and housing options near transit.
  
• Reduce costs and speed up project approvals with consistent building construction standards across Ontario municipalities.
  
• Significantly speed up getting shovels in the ground to build major transit projects by extending measures in the Building Transit Faster Act, 2020 to all provincial transit projects.
  
• Simplify, streamline and bring consistency and transparency to development applications, land use planning approvals, and contents of municipal official plans. These changes would make it easier and faster to build residential, commercial and industrial buildings within and across Ontario’s municipalities.
  
• Ontario’s road building standards can differ across the province’s 444 municipalities, causing unnecessary cost and delays. The province will consult with municipalities and stakeholders by fall 2025 on framework legislation for greater harmonization and clarified governance of municipal standards.

“We are pulling out all the stops to protect and build up Ontario during this time of economic uncertainty,” said Kinga Surma, Minister of Infrastructure. “Our expanded investments will ensure we can build even more homes, create more jobs and protect the most critical infrastructure that people depend on every day.”

Through HEWSF, the province has already allocated nearly $1.3 billion for water and waste-water infrastructure projects that will enable the construction of approximately 600,000 homes. Ontario has also invested approximately $700 million in MHIP. Combined with the new $400 million ($315 million for HEWSF and $85 million for MHIP) this brings the new total investment to nearly $2.3 billion.

“I applaud Premier Ford, Minister Flack, and the Government of Ontario for taking bold and creative action to address the housing crisis,” said Steven Del Duca, Mayor for the City of Vaughan. “The status quo simply isn’t working, and families across Ontario — including mine — deserve to see real change. I want my kids to have the opportunity to own a home in the city where they grew up. In Vaughan, we’re doing our part by reducing development charges by 50 per cent and using every tool available to get more homes built, faster. I welcome the province’s leadership in cutting red tape, standardizing approvals, and building a more efficient, affordable future for all Ontarians.”

Through the Building Faster Fund, the government has also provided municipalities with $286.8 million for community and housing-enabling infrastructure last year, along with $120 million dedicated for small, rural and Northern municipalities without housing targets which is being delivered through the HEWSF and MHIP. This is in addition to the $1 billion in flexible loans for housing-enabling water infrastructure projects available to municipalities through the Infrastructure Ontario Loan Program.

“I’m grateful for the province’s leadership in introducing these much-needed measures to address the housing crisis,” said Carolyn Parrish, Mayor for the City of Mississauga. “Municipalities cannot tackle this challenge alone — we need support like this to cut red tape, streamline approvals, and create the conditions for faster, more affordable housing development. Mississauga’s Housing Task Force has demonstrated that bold reforms and innovative policies can drive real progress, and these provincial measures will encourage cities across Ontario to accelerate their own housing initiatives. This kind of collaboration across all levels of government is critical to meeting the urgent housing needs of our residents and building a more sustainable future for residents all over Ontario.”

The Ontario Home Builders’ Association (OHBA) responded to the announcement, say they were optimistic about the legislation. The group noted that it targets two of the most significant drivers of high housing costs: development charges and permitting and approval delays. Builders across Ontario have long advocated for action on these barriers, which in many cases add hundreds of thousands of dollars to the cost of a new home.

The bill comes after months of consultation with OHBA representatives and other industry experts who
shared data-driven evidence on the impact of development charges and delays.

“I’m very pleased by the level of engagement and representation from industry that was part of this process,” said Andison. “We need all hands on deck to tackle the housing crisis, and I’m happy to know that Minister Flack understands that and sees value in having industry be part of the conversation. This legislation is a strong step towards boosting supply, restoring affordability, and protecting jobs in the residential construction sector.”

In particular, the bill aims to stimulate new home construction by implementing policies developed with municipalities to standardize development charges. Currently, government fees and taxes account for roughly 30-35% of the cost of a new home, making the government at different levels the biggest financial beneficiary of a new home purchase.

Development charges account for about half of that cost and have increased dramatically over the last decade. The Greater Toronto Area has the highest development charges in North America, which have risen 176% since 2011, continuing to rise while we face the worst housing crisis the province has ever seen. Builders have long called for provincial action to reduce them

The bill also looks to streamline the permitting and approval process for new developments by bringing consistency to a process that varies across the 444 municipalities in Ontario. This includes standardizing how local roads are designed and built to speed up construction and reduce costs for builders and home buyers. Like development charges, delays at the municipal level have a tangible impact on house prices, adding thousands of dollars per day to project costs.

“Ontario’s current housing framework is failing to meet the needs of average households, with homeownership increasingly out of reach and younger generations leaving the Greater Toronto Area in search of attainable living options,” said Kirstin Jensen, Vice President of Policy, Advocacy, and Relationships at OHBA. “The legislative package introduced by Minister Flack represents a strong and necessary advancement toward restoring attainable housing in the province. Continued leadership of this nature—anchored in evidence-based policy and strong government-industry collaboration—will be critical to meaningfully addressing Ontario’s housing supply and affordability challenges.”