Ontario signals changes to fund that helps municipalities get housing built

Ontario is planning to make changes to a housing fund for municipalities that many have said unfairly measures their progress on building, the minister signalled in a speech Tuesday.

Rob Flack told the Association of Municipalities of Ontario conference in Ottawa that he is going to consult with mayors and the association to “extend and improve” the Building Faster Fund.

“That includes ensuring the fund reflects the new market we are in, as well as encouraging municipalities to cut development charges and get shovels in the ground faster on key infrastructure projects,” he said.

The fund rewards municipalities that achieve at least 80 per cent of a housing target the provincial government assigns and gives them money to put toward housing-enabling infrastructure – often coming by way of a novelty cheque from Flack or Premier Doug Ford.

This past year, just 23 of the 50 municipalities with assigned targets hit their thresholds, down sharply from 32 the previous year.

Some municipalities say that rewarding or leaving out cities and towns based on when construction starts is unfair, because while municipalities are responsible for approvals, they can’t control when a builder starts a project.

Clarington, Ont., missed qualifying for what the mayor said would be $4 million in funding by just 13 housing units.

“All of the big city mayors have the same concern,” Mayor Adrian Foster said in a recent interview.

“I think Clarington has something like 7,000 permits that could be pulled, or very easily pulled by developers with a minimal amount of work. We can’t force developers to pull the permits even after we’ve approved those permits. So there are a variety of problems with using starts. We’re being held accountable for something we can’t control, and not getting credit for the stuff that we can control.”

Foster said Clarington actually surpassed the 80 per cent threshold, but Ontario is using faulty data based on an undercount by the Canada Mortgage and Housing Corp. He is hopeful that discussions about it with the province will remedy the issue, but is frustrated because the same issue happened last year, with Clarington not qualifying for the funding at first.

“It is déjà vu all over again,” he said.

The fund is one of many ways the government has been trying to spur home building, as Ontario is well off the pace of home building that’s needed to achieve Ford’s goal of getting 1.5 million homes built by 2031.

Ontario only reached about 75 per cent of its interim target for getting 125,000 homes built in 2024, even after it tacked on about 20,000 long-term care beds, retirement home suites, post-secondary student housing beds and additional residential units to its count of traditional housing starts.

CMHC figures released Monday show the country’s annual pace of housing starts in July rose four per cent year-over-year, but in Ontario there was a decline of 28 per cent. 

Ford announced Monday at the conference that the province is putting $1.6 billion more toward the Municipal Housing Infrastructure Program, which helps municipalities get housing built.

This report by The Canadian Press was first published Aug. 19, 2025.