Ontario City to Receive Nearly $40M for Cutting Development Fees on New Homes

Ontario Premier Doug Ford speaks to the media at Queen’s Park in Toronto on Jan. 21, 2026. The Canadian Press/Nathan Denette

Peterborough, Ont., is set to receive nearly $40 million in federal and provincial funding to help build housing and improve infrastructure, while lowering the cost of new home construction.

The city is slated to receive $39.9 million through the Development Charge Reduction Program (DCRP), an $8.8 billion funding initiative that rewards municipalities that agree to lower development charges for residential developments over a three-year period, Premier Doug Ford announced during a Nov. 9 press conference in the city.

Development fees are used by municipalities to finance infrastructure such as roads, sewers, and water systems. But these fees have increased the expenses associated with home construction in recent years, leading the province and Ottawa to announce the program this spring.

Prime Minister Mark Carney announced at a joint March 30 press conference that the bulk of the $8.8 billion in funding would be used to help cover infrastructure costs for any city that lowers development charges (DCs) by up to 50 percent.

Peterborough has committed to the full 50 percent reduction, outgoing Mayor Jeff Leal said at a Nov. 9 press conference. The city will reduce development fees by 50 percent retroactively, from March 30 of this year through to March 31, 2029.

The combination of lower development fees and infrastructure investments could pave the way for 9,276 new homes in Peterborough, Leal estimated.

Ford said the development-charge reductions are expected to reduce the cost of building a new home in Peterborough by up to $34,302 over the three-year period. When combined with expanded HST relief for eligible new homes, the measures could result in total savings of up to $164,302, he said.

Ford argued it’s also beneficial for municipalities that get onboard because they will receive government funding and increase their tax base as people move into new homes in the city of more than 80,000. Ford added that the funding means “9,000 more people are going to be paying taxes right into Peterborough, so they can help fix the roads and build more schools.”

Municipal Affairs and Housing Minister Robert Flack described the program and subsequent funding as a bid to help address Ontario’s “housing affordability crisis.”

A massive increase in population between late 2022 and early 2024 outstripped the province’s homebuilding capacity. The surge, primarily linked to immigration, contributed to a major housing shortage, according to government data. That, coupled with soaring prices that have outpaced stagnant wages, high municipal approval delays, and heavy development charges, have also played a role.

“Across Ontario, there is a need for critical infrastructure and housing of all types to support our fast-growing communities,” Flack said.

Leal said the government funding will help the city with several projects, including road reconstruction, watermain and sewer upgrades, and wastewater management.

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