Canada and Ontario Put $1 Billion Behind Climate-Ready Infrastructure to Support Sustainable Housing Growth

Canada and Ontario are investing $1 billion in infrastructure to help municipalities unlock housing growth while strengthening the foundations of more sustainable and climate-ready communities.

Through the new Non-Development Charge Municipalities Stream, eligible municipalities will receive funding for critical infrastructure including roads, bridges and water systems. The investment is intended to address aging assets and infrastructure backlogs while creating the capacity needed for new housing development.

The funding will be split equally between the two governments. Ontario is providing $500 million through its Municipal Housing Infrastructure Program, while Canada is committing another $500 million through the Build Communities Strong Fund’s Provincial and Territorial stream, subject to an agreement under the Fund.

The initiative has an important sustainability dimension. Upgrading essential infrastructure can help communities accommodate population growth while improving the reliability of services and strengthening their ability to manage climate-related pressures. The broader Build Communities Strong Fund also supports climate adaptation, alongside investments in transit, health, education and other critical infrastructure.

The new stream forms part of the $8.8 billion Canada-Ontario Partnership to Build, which also includes measures supporting municipalities that reduce development charges and expanded HST relief on new homes. Together, these initiatives aim to reduce barriers to housing supply while supporting long-term community development.

Applications for the Non-DC Stream will open October 29, 2026.

The investment signals a broader shift toward viewing housing growth through an infrastructure lens: building more homes also requires reliable, climate-ready systems capable of supporting communities over the long term.

$1 billion for climate-ready infrastructure is where physical-risk investment gets formally scaled, and it affects real-estate developers, insurers and lenders with Ontario portfolio exposure. Our climate-action and impact-assessment teams help clients quantify physical-climate risk and align TCFD-aligned disclosure with real infrastructure priorities.