On August 5, 2026, the Government of Canada and the City of Toronto announced a partnership worth up to $2.7 billion to build more than 5,600 rental homes across 18 projects, with shovels in the ground on more than 4,500 homes before the end of 2026. The package includes over $1.8 billion in low-cost Apartment Construction Loan Program financing for nine projects, $310 million from Build Canada Homes for nine City-led projects on City land, and $703.7 million from the City. Separately, Toronto's Purpose-Built Rental Housing Incentives stream defers development charges indefinitely for rental projects with at least 20 percent affordable units, targeting up to 10,000 rental homes.
Rental development in Toronto now has the deepest incentive stack in the country. The August 5, 2026 federal-City announcement committed up to $2.7 billion for more than 5,600 rental homes, and it landed on top of a City incentive stream that already offered indefinite development charge deferral for projects with an affordable component. For a developer weighing condo versus rental on a Toronto site, the math has shifted decisively toward rental, exactly as condo presales have stalled.
| Component | Amount | What it funds |
|---|---|---|
| Apartment Construction Loan Program (ACLP) | Over $1.8 billion | Low-cost loans for 9 projects, more than 3,700 rental homes |
| Build Canada Homes | $310 million | 9 City-led projects on City-owned land, more than 1,800 homes |
| City of Toronto | $703.7 million | Funding and financial incentives across the portfolio |
| Total | Up to $2.7 billion | More than 5,600 rental homes across 18 projects |
The Build Canada Homes portion is delivered with public, non-profit, and Indigenous housing providers, and the mix includes affordable, rent-geared-to-income, rent-controlled, and supportive homes. The ACLP portion is the piece most relevant to private developers: low-cost construction financing for purpose-built rental at a time when conventional construction debt is the binding constraint on most rental pro formas.
Evaluating a Toronto site for rental? PreBuildIQ maps the address to its approval path, required studies, and zoning in 60 seconds.
Check my site →A purpose-built rental project in Toronto can now draw on several layers at once. The layers are separate programs with separate tests, and the affordable set-aside is the key that unlocks the deepest one:
Residential development charges are cut 40 to 60 percent from 2026 through 2029 for all residential projects under the Canada-Ontario Partnership to Build.
Toronto's Purpose-Built Rental Housing Incentives stream defers development charges indefinitely for rental projects with at least 20 percent affordable units. The stream targets up to 10,000 rental homes including at least 2,000 affordable units.
CMHC's Apartment Construction Loan Program provides low-cost, long-amortization construction loans for purpose-built rental. The August package committed $1.8 billion of it to Toronto projects, and the program remains open to new applications.
Whatever DC amount remains payable can be paid at occupancy rather than permit issuance under provincial Development Charges Act changes.
Toronto has thousands of homes that are planned, permitted, and approved but not financed. The August package exists to move that inventory to construction, with a target of shovels in the ground on more than 4,500 homes before the end of 2026. That tells you how the programs will be administered: money flows to projects that are entitlement-complete. A rental concept that has not started its approvals cannot draw on construction financing, which makes the pre-development phase, zoning confirmation, studies, and agency circulation, the gating item between a Toronto site and this capital.
With preconstruction condo sales down sharply in the Toronto region, sites entitled for condo are being re-run as rental. The zoning entitlement usually carries over, but the incentive tests, 20 percent affordable for the DC deferral, and program underwriting for ACLP, are new work. Re-confirm the full requirements list before assuming an entitled site is program-ready.
On August 5, 2026, the Government of Canada and the City of Toronto announced a partnership worth up to $2.7 billion to build more than 5,600 rental homes across 18 projects, with construction starting on more than 4,500 homes before the end of 2026. It includes over $1.8 billion in Apartment Construction Loan Program financing, $310 million from Build Canada Homes for projects on City land, and $703.7 million from the City.
Toronto's Purpose-Built Rental Housing Incentives stream defers development charges indefinitely for rental projects that include at least 20 percent affordable housing. The stream supports up to 10,000 new rental homes with a target of at least 2,000 affordable units. Projects without the affordable component still benefit from the 40 to 60 percent DC Reduction Program and Bill 17 occupancy payment timing.
The Apartment Construction Loan Program (ACLP) is CMHC's low-cost construction financing program for purpose-built rental housing, offering below-market rates and long amortizations. In the August 2026 Toronto package, more than $1.8 billion in ACLP loans was committed to nine projects delivering over 3,700 rental homes. The program is open to private, non-profit, and public developers who meet its affordability, efficiency, and accessibility criteria.
Build Canada Homes, the federal housing delivery agency, is contributing $310 million to nine City-led projects on City-owned land, delivering more than 1,800 homes. The projects are delivered with public, non-profit, and Indigenous housing providers and include affordable, rent-geared-to-income, rent-controlled, and supportive housing.
The incentives now favour rental on many sites. Preconstruction condo sales in the Toronto region have fallen sharply, while rental projects can access reduced and deferred development charges, low-cost ACLP construction financing, and the August 2026 federal package. The right answer is site-specific and depends on zoning, unit mix, and whether the project can meet the 20 percent affordable test that unlocks the deepest incentives.
Program capital flows to projects that are approved and shovel-ready. PreBuildIQ maps any Toronto address to its approval path and required studies in 60 seconds.
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