Ontario secures $357-million boost from Ottawa in affordable housing agreement

On Tuesday, Ontario and the federal government announced a landmark $357-million agreement aimed at addressing the province's severe housing shortage. This funding, part of Canada’s national housing strategy, comes after months of intense negotiations and is seen as a breakthrough moment in Ontario’s housing crisis.

The agreement was initially announced in 2018 under the National Housing Strategy’s bilateral agreement. Ontario had committed to building 19,660 new affordable housing units by 2028. However, the province fell significantly short of this goal, projecting only 1,184 new units by the end of the 2024-2025 fiscal year. This shortfall led to Ottawa threatening to withhold the funding.

Federal Housing Minister Sean Fraser expressed frustration in March, calling Ontario’s original target unrealistic and insisting on a more feasible action plan. “I cannot accept an action plan that demands funding for affordable housing that will never be built,” Fraser stated.

Tuesday's announcement marks a significant turning point. Ontario has now submitted a revised action plan that addresses federal concerns and provides detailed insights into current housing projects and funding allocations. The new measures include establishing provincial supply targets, setting annual goals, directing funds toward new projects, and implementing detailed reporting mechanisms.

The agreement emphasizes the importance of a collaborative effort to solve the housing crisis. The official statement highlights the need for a "Team Canada approach," a sentiment echoed by several housing organizations. The Canadian Home Builders’ Association (CHBA) reiterated the call for all levels of government to unite in addressing the housing crisis.

“It is critical that the federal government continue to take action, but that provinces and municipalities take substantive action as well,” CHBA stated.

In February, the Toronto Regional Real Estate Board (TRREB) also encouraged collaboration between provincial and federal governments to implement policies that better equip municipalities to build housing and access funding.

Continued federal funding depends on Ontario submitting another action plan for 2025 to 2028 by the end of this year. The joint release concluded, “We will continue to work together, along with our municipal partners, to make sure the people of Ontario have the homes they need.”