City receiving $697.2 million for housing-enabling infrastructure in exchange for reducing and eliminating development charges over three years
Vaughan, Ontario, August 26, 2026 - Today, the governments of Ontario and Canada announced that the City of Vaughan is receiving up to $697.2 million through the Development Charge Reduction Program (DCRP) in recognition of its commitment to reduce development charges by 50 per cent for residential developments from March 30, 2026, to March 31, 2029. Furthermore, for qualifying residential developments that meet specified construction milestones, Vaughan is eliminating development charges altogether from February 25, 2026, to October 31, 2027. The funding recognizes Vaughan's early leadership in reducing development charges. It will help build more homes and community infrastructure while advancing the province's plan to protect Ontario by investing in projects that lower costs for families, support economic growth and keep workers on the job in the face of the latest U.S. tariffs on Canada.
The changes to Vaughan's development charges are estimated to reduce the cost of building new homes by up to $98,056. When combined with the up to $130,000 in savings enabled through the expanded HST relief on eligible new homes, these initiatives could save Vaughan families up to $230,000 off the cost of a new home.
In March 2026, the Government of Canada and Ontario agreed to a cost-matched structure to provide a combined $8.8 billion over 10 years for infrastructure investments in Ontario, with Canada's share of the funding flowing through the Build Communities Strong Fund (BCSF). The two governments also agreed to provide relief on the full HST on eligible new homes from April 1, 2026, to March 31, 2027, saving homebuyers up to $130,000 off the cost of a new home. This is in addition to cost reductions for builders through the DCRP.
The City of Vaughan estimates that the construction cost savings over the development charge reduction period, along with the investment in housing-enabling infrastructure, would unlock over 120,000 new housing units, supporting a housing market with more choice and greater affordability for homebuyers and renters.
The elimination and reduction of development charges are already in place. Subject to the signing of a Canada-Ontario BCSF agreement, further due diligence by both governments and the signing of an Ontario-municipal Transfer Payment Agreement, the DCRP will provide the City of Vaughan with up to $697.2 million to support infrastructure projects in communities across Vaughan that will unlock housing, including:
- Improving water, wastewater and stormwater infrastructure including a new watermain at Keele Street, upsizing and reconstruction of the Block 22 watermain as well as culvert improvement, realignment and conveyance capacity improvement of Black Creek.
- Supporting road and transportation needs of growing communities in the city by widening Huntington Road to four lanes; widening Kirby Road to four lanes; adding a mid-block crossing on Colossus Drive; extending Bass Pro Mills Drive from Highway 400 to Weston Road; expanding Teston Road between Pine Valley Drive and Kleinburg Summit Way with a new two-lane road alignment and related infrastructure; and improving Teston Road between Keele and Dufferin Streets with a new four-lane road and related infrastructure.
- Replacing the Canadian Pacific Kansas City (CPKC) Rail Bridge to accommodate the widening of Highway 7 to 8 lanes.
- Planning, designing and building emergency services facilities such as a new double-bay fire station at Rutherford Road and Dufferin Street.
As part of the Canada-Ontario Partnership to Build, the DCRP is delivering funding over 10 years for housing-enabling infrastructure projects. Funding is being prioritized for municipalities that reduce development charges for all residential types by 30 to 50 per cent or greater and maintain the reductions for at least three years.
