On August 16, 2026, the Governments of Canada and Ontario announced $1 billion to help municipalities that do not levy development charges build housing-enabling infrastructure. Ontario is contributing $500 million through the Municipal Housing Infrastructure Program (MHIP) and Canada is contributing $500 million through the Build Communities Strong Fund's Provincial and Territorial stream. Applications for the non-DC stream open October 29, 2026. The program funds core infrastructure such as water, wastewater, and roads that unlock new housing in smaller and rural municipalities, and it complements the March 2026 federal-provincial partnership that funds larger municipalities to cut development charges in half.
Most housing funding announcements in Ontario are written for the big cities. The August 16, 2026 announcement is different: $1 billion specifically for municipalities that do not levy development charges, which in practice means the smaller and rural municipalities where growth has been throttled not by demand but by pipes, plants, and roads that are already at capacity.
| Component | Amount | Delivered through |
|---|---|---|
| Ontario contribution | $500 million | Municipal Housing Infrastructure Program (MHIP) |
| Federal contribution | $500 million | Build Communities Strong Fund, Provincial and Territorial stream |
| Total | $1 billion | Non-DC municipality stream |
| Applications open | October 29, 2026 | Eligible municipalities apply directly |
The target is housing-enabling infrastructure: water and wastewater capacity, stormwater, and the road works that let a municipality assign servicing allocation to new subdivisions and intensification projects. In a municipality without development charges there is no DC reserve fund to draw on, so a single trunk watermain or plant expansion can stall every draft plan in the pipeline. This stream exists to break exactly that bottleneck.
Building in a smaller Ontario municipality? PreBuildIQ maps any address to its approval bodies, required studies, and servicing context in 60 seconds.
Check my site →The non-DC stream is the second half of a two-part structure. In March 2026, the federal and provincial governments announced a partnership worth $8.8 billion, with each government contributing $4.4 billion, to fund municipalities that cut their development charges roughly in half for at least three years. Toronto's Development Charge Reduction Program, with its 40 to 60 percent cuts, is the flagship of that stream. But a DC-cut program by definition excludes municipalities that never levied DCs in the first place. The August 16 announcement closes that gap:
If you hold land in a small or rural Ontario municipality where the answer to "when can we get servicing allocation" has been "after the plant expansion, whenever that is funded," this program can move your timeline. Municipal applications will be strongest where a shovel-ready pipeline of housing can be shown to depend on the funded works. That gives developers a reason to engage now: a draft plan that has cleared agency circulation, with studies complete, is exactly the evidence a municipal application needs. Projects still sitting on an incomplete 1st submission are harder for a municipality to count.
Infrastructure funding expands capacity, but each municipality decides how servicing allocation is assigned. Ask the municipality how funded capacity will be allocated between registered plans, draft-approved plans, and new applications before you assume your project benefits.
The Municipal Housing Infrastructure Program (MHIP) is Ontario's provincial fund for housing-enabling infrastructure such as water, wastewater, and roads. Under the August 16, 2026 announcement, Ontario is directing $500 million through MHIP to municipalities that do not levy development charges, matched by $500 million from the federal Build Communities Strong Fund for a combined $1 billion stream.
The stream is for Ontario municipalities that do not charge development charges, which are typically smaller and rural municipalities. Municipalities that levy DCs are instead served by the March 2026 federal-provincial partnership worth $8.8 billion, which funds development charge reductions of roughly half for at least three years.
Applications for eligible municipalities open on October 29, 2026. Developers do not apply directly; the municipality applies, and applications are strongest where funded infrastructure can be shown to unlock a shovel-ready housing pipeline.
Housing-enabling infrastructure: the water, wastewater, stormwater, and road works that create servicing capacity for new homes. In municipalities without DC reserve funds, these works are the most common reason servicing allocation is unavailable and subdivisions stall.
It is the companion program. The $8.8 billion March 2026 partnership pays DC-levying municipalities to cut development charges in half for at least three years, and the $1 billion August 2026 stream funds municipalities that never had DCs to cut. Together they are meant to lower the cost side and the capacity side of new housing at the same time.
PreBuildIQ maps any Ontario address to its approval bodies, required studies, and terms of reference in 60 seconds, so your project is shovel-ready when infrastructure funding lands.
Run a site report →