Toronto's Landmark Three-Government Partnership: Development Charges Could Be Reduced by Up to 50%

The News at a Glance

On March 30, 2026, the City of Toronto joined the Government of Canada and the Province of Ontario to announce a landmark multi-billion-dollar deal to reduce development charges on new housing across Toronto and build the Waterfront East Transit. The announcement has two major components.

Component One: Development Charges Could Be Reduced by Up to 50 Per Cent. As part of the announcement, the federal and provincial governments will fund a reduction in development charges by up to 50 per cent by supporting housing-enabling infrastructure. The City will work with the province to put forward a list of growth-enabling projects to be supported by intergovernmental funding, enabling a reduction in development charges collected without impacting delivery of critical infrastructure.

Component Two: $1-Billion Investment in the Waterfront East Transit. The announcement also provides critical funding for the Waterfront East Transit from the provincial and federal governments, alongside the City's $1-billion investment, to connect across the eastern waterfront to the Port Lands with a new Waterfront East line. According to the City, this historic three-way partnership will serve more than 150,000 people with more than 50,000 daily trips and is expected to enable more than 75,000 housing units. The project is expected to create more than 100,000 jobs and generate more than $13.2 billion in economic value, delivering lasting economic impact locally, provincially and nationally.

What is a Development Charge?

Official definition (City of Toronto):

Development charges are fees imposed on land development and redevelopment projects to help pay for the capital costs of infrastructure that is needed to service new development.

Six Existing Measures the City Has Already Taken

This announcement builds on bold steps the City has already taken to reduce development charges and fees on new housing for Torontonians. The City has invested more than $760 million to reduce development charges and incentivize housing, including:

1. Eliminating development charges for 6,128 purpose-built rental housing units
2. Providing a 15 per cent property tax reduction for new multi-residential units
3. Freezing development charges rates at 2024 levels
4. Deferring development charges payments for condo units (pre-Bill 17)
5. Ending the City's conditional permit policy, allowing developments to receive the development charges rate frozen at time of planning application
6. Exempting developments with up to six units, plus a garden/laneway suite, from development charges and other fees to support the construction of all housing types

What This Means for Different Groups

For Small Developers and Builders (Direct Beneficiaries). Exempting projects with up to six units changes the economics of small-scale multi-unit construction — duplexes, triplexes, fourplexes, and sixplexes. Many of these projects have struggled to be financially viable because development charges spread across a small number of units made them difficult to underwrite. Under the new policy, projects that were once marginal may now move forward.

For Garden Suite and Laneway Suite Businesses (Indirect Beneficiaries). With development charges removed from these accessory dwelling units, construction costs will drop meaningfully. Renovation contractors, light-frame builders, and modular construction firms are well-positioned to see increased demand.

For Homebuyers and Renters (Ultimate Beneficiaries). Development charge reductions should, in theory, flow through to lower housing prices and rents. In practice, however, the outcome depends on market conditions — if supply continues to lag demand, developers may retain part of the savings as margin rather than passing the full reduction along to buyers.

For Existing Homeowners (Indirectly Affected). The 15 per cent property tax reduction applies only to new multi-residential units. It does not extend to existing detached homes or resale condos, so current homeowners will not see a reduction in their property tax bill as a result of this measure.

For the Rental Market. Eliminating development charges for 6,128 purpose-built rental units will encourage more purpose-built rental projects to advance. Given Canada's persistent rental housing supply shortage, this is a positive signal.

What to Watch Going Forward

This is a framework-level announcement rather than a fully implemented policy. Several questions remain to be answered:

1. The specific funding commitments and timelines from the federal and provincial governments. The March 30 announcement referenced “up to 50 per cent” but did not specify dollar amounts, schedules, or which projects will qualify.
2. The City Council's implementing legislation. Municipal-level reductions will still require Council to pass the corresponding by-law amendments.
3. Procurement and groundbreaking timelines for the Waterfront East Transit. A $1-billion project carries a long supply chain, and the construction start date is worth tracking.
4. The real-world pass-through effect. How much of the development charge savings ultimately translates into lower housing prices, lower rents, or higher housing starts will only become clear once the data is in.

Follow CCCA (Canada China Construction Association) for first-hand updates on the construction industry.

Up to $44,000 in Renovation Grants for Toronto Storefronts: CCCA Member Guide

Application Window

The City of Toronto's Commercial Space Renovation Grant Program is opening a new round of applications. The window is brief, and we encourage interested members to take note of the timeline:

• Opens: 9:00 AM, Monday, June 1, 2026
• Closes: 12:00 noon on Friday, June 5, 2026

Applications will be reviewed and assessed in the order received. Should additional funding become available in 2026, a waitlist will be activated.

Given the five-day window and first-come, first-served review process, we recommend that interested applicants begin preparing materials immediately to ensure they can submit on the opening day.

Detailed information from the official website:

https://www.toronto.ca/business-economy/business-operation-growth/business-incentives/commercial-space-renovation-grant-program/

Program Background

The Commercial Space Renovation Grant Program is administered by the City of Toronto and funded by the Government of Canada through the Federal Economic Development Agency for Southern Ontario (FedDev Ontario). Its purpose is to help revitalize vacant storefronts along Toronto's main streets and to support the recovery and long-term sustainability of local small businesses.

The program operates as a 50% Matching Grant once qualifying renovation work is completed, the City reimburses 50% of eligible expenses, up to the program ceiling.

Funding Available

Category	Maximum Grant	Details
Base Renovation Grant	$20,000	Requires at least $40,000 in eligible improvements (50% match)
AODA Accessibility Upgrade	Add $4,000	Improvements must meet AODA design standards
Multi-Unit Property Bonus	Add $4,000 per unit(Maximum 5 units)	Multiple commercial units within a single property
Total Maximum per Application	$44,000 and above	Depending on project scope and unit count

Example: An applicant who owns a property with two commercial units and completes $50,000 in renovations, including accessibility improvements, would qualify for $20,000 (base) + $4,000 (AODA) + $4,000 (multi-unit) = $28,000 in total grant funding. Total $28,000。

Eligibility

Applicants meeting the following criteria may apply:

• The property must be locatedToronto city administrative area(note: Markham, Richmond Hill, and other 905 municipalities are not covered)
• The property must be used forcommercial purposes at street levelor provide direct street access from another floor
• Both property owners and tenantsare eligible; tenants must obtain written authorization from the property owner
• The project must include at least threeeligible improvements
• Total project cost must be no less than $5,000
• Businesses located in areas affected by major municipal construction projects (transit work, road reconstruction, etc.) are particularly encouraged to apply

 

Eligible Improvements

The following categories of renovation work qualify for grant funding:

• Structural upgrades, electrical work, and interior lighting
• HVAC systems, plumbing, and plumbing fixtures
• Interior painting, flooring, ceiling, and wall finishes
• Permanently affixedcounters and merchandise displays
• Accessibility improvements
• Design fees (architect, engineer, AODA consultant, BCIN-registered designer),up to $2,000 per application

 

Ineligible Items

The following are excluded from grant coverage:

• Projects totaling less than $5,000
• Routine maintenance (replacing broken windows, unclogging plumbing, patching ceiling panels, etc.)
• Places of worship, institutional buildings, not-for-profit commercial buildings, and residential buildings
• Moveable items (furniture, window coverings, equipment, appliances, computers, and IT-related expenses)
• Exterior work (such as tiling outside the front entrance)
• Chains and franchises: only one application is permitted per organization

 

Recommended Documentation

While the City has not published a mandatory checklist, based on standard practice for grant programs of this type, applicants should prepare the following in advance:

1. Renovation plans and drawings(floor plans, renderings, or construction notes)
2. Itemized budget(with each cost component clearly listed)
3. Contractor quotes(ideally two to three for comparison)
4. Landlord authorization letter(required for tenant applications)
5. Proof of property address and business license
6. Photographs of the space prior to renovation

The completeness of submitted materials directly affects review efficiency and queue position.

 

Official Contact

For direct inquiries to the City's program lead:

• Contact Person: Michael Saunders
• Telephone: 416-392-1005
• Email: Michael.Saunders@toronto.ca

Official program page (where future updates will be published first): https://www.toronto.ca/business-economy/business-operation-growth/business-incentives/commercial-space-renovation-grant-program/

A Note from CCCA

Government grant programs tend to rewardapplicants who are well-informed and well-prepared. Those who act early and submit complete materials consistently benefit; those who delay often miss out.We would like to draw members' attention to three points:

1. Act early. With a five-day application window and a first-come, first-served review process, any delay risks losing access to funding.

2. Ensure your project is substantively eligible. Renovations must include at least three qualifying improvements with a total cost of no less than $5,000. The grant is intended to support necessary work that genuinely improves the commercial space, not projects manufactured solely to qualify.

3. CCCA offers professional referral services. The Canadian Chinese Construction Association (CCCA) maintains a network of member professionals who meet the qualifications required by this grant program, including licensed contractors, interior designers, engineers, AODA accessibility consultants, and BCIN-registered designers. If you intend to apply, we can assist with:

• Connecting you with qualified contractors and designers for renovation planning and quotations
• Providing professional consultation on AODA accessibility improvements
• Helping you assess project eligibility and organize application materials

Chinese-Canadian businesses are an integral part of Toronto's commercial landscape. CCCA is committed to helping members access government resources and pursue business growth in a compliant and well-supported manner.

For further information or to be connected with qualified professionals, please contact CCCA.