Ottawa Announces $2.7 Billion Housing Partnership With Toronto

Prime Minister Mark Carney, Housing Minister Gregor Robertson, and Mayor Olivia Chow speak at a housing announcement in Toronto, on Aug. 5, 2026. The Canadian Press/Sammy Kogan

The federal government has announced a partnership with Toronto to build more than 5,600 new rental units across the city.

Prime Minister Mark Carney said on Aug. 5 that the Liberal government was pledging $2.7 billion over the next three years to build more than 18 housing projects in Toronto. He said that 1,800 of these 6,500 units will be “deeply affordable, supportive, or rent-controlled.”

Carney added that 4,500 units, or 80 percent, will be under construction by the end of 2026.

Carney also said some of the projects will be built in neighbourhoods that have been the “hardest hit by rising rents and rising evictions,” including a new 16-story housing complex in Parkdale and another in Scarborough.

The prime minister said Toronto is one of the fastest-growing cities in North America, but for several decades the city “didn’t build enough housing, and too much of what was built was unaffordable for most Torontonians.”

The housing projects will be divided into two channels, with the first being non-market and non-profit housing delivered through the federal government’s Build Canada Homes agency. Carney said Ottawa is investing more than $310 million for nine projects on land owned by Toronto, which includes nearly 1,900 homes.

“All of these projects were ready to build, many of them for a long period of time. All of them were stalled for want of financing, until today,” Carney said.

Carney said the second channel is market-rate housing built by the private sector and backed by “attractive” financing, which includes more than $1.8 billion in federal funding for nine projects and 3,700 new homes.

Toronto Mayor Olivia Chow said that Torontonians looking for more space to raise a family or more affordable housing will see it “coming here” to Toronto and Scarborough.

“We have thousands of shovels in the ground, cranes in the sky across the city. We will build homes people can actually afford, and for the first time in a long time, rent is going down,” she said.

During the 2025 election campaign, the Liberal Party pledged to double Canada’s residential construction rate, with a target of nearly 500,000 new homes per year over the next decade.

According to a recent Canada Mortgage and Housing Corporation (CMHC) report, new housing construction is projected to remain subdued through the end of the year and into 2027. Housing starts rose to 241,171 in 2025 from 227,697 in 2024, and the CMHC projects 241,000 starts in 2026, 223,400 in 2027, and 211,900 in 2028.

The Conservatives said the latest announcement is just a “repackaging of projects already announced or already under construction,” saying they won’t be enough to meet the country’s housing demands.

“Of the homes that are being built, they are disproportionately smaller rental apartments and condos, not the single-family homes young Canadians aspire to own,” Conservative MP and housing critic Scott Aitchison said in a statement.

Aitchison said what’s needed is to cut the GST on new homes further, work with municipalities to reduce development charges, and for the government to get “out of the way so builders can build.”