Federal government, Toronto announce $2.7B partnership for more than 5,600 rental homes

The federal government and the City of Toronto announced a partnership worth more than $2.7 billion Wednesday aimed at getting thousands of new rental homes built across the city.

Prime Minister Mark Carney and Toronto Mayor Olivia Chow announced the investment, which will support more than 18 housing projects over the next three years.

The projects are expected to create more than 5,600 rental homes, with construction on more than 4,500 units expected to begin before the end of 2026.

The portfolio will include affordable, supportive, rent-geared-to-income and rent-controlled housing.

The federal government said more than $310 million will be provided through Build Canada Homes for nine projects on city-owned land. Those projects are expected to create nearly 1,900 rental homes, including more than 700 supportive and affordable units and more than 1,100 rent-controlled homes.

Toronto will contribute public land at nominal value, along with more than $530 million in capital funding and financial incentives. Those incentives include property-tax exemptions of up to 99 years.

Another nine projects will receive more than $1.8 billion in low-cost financing through the Canada Mortgage and Housing Corp.'s Apartment Construction Loan Program. Those projects are expected to deliver more than 3,700 rental homes, including more than 1,000 affordable units.

The federal government will also make up to $600 million in additional financing available through the program as other Toronto projects become ready to proceed.

The projects include a 100-unit Indigenous-led supportive housing development on Denison Avenue.

Two developments will use newer construction methods, including a mass-timber, low-carbon project on Dundas Street West and a volumetric-modular development on Wellington Street.

The federal government said the projects are expected to support about 2,100 jobs annually during construction and will prioritize Canadian materials, including steel and lumber.

The announcement builds on the federal government's broader housing initiatives, including Build Canada Homes, which was launched last year to increase the pace and scale of housing construction.

The government said Build Canada Homes has committed to nearly 17,000 units through 17 partnerships, with more than 1,900 homes already under construction.

The federal government has also announced measures aimed at reducing taxes and development costs associated with new housing, including GST relief for eligible first-time homebuyers and funding to help Toronto reduce residential development charges.