Department of Finance Canada said Bill C-26, the Improving Housing Supply Act, received Royal Assent on June 18.
The legislation provides $1.7 billion to provinces and territories to help remove barriers to residential construction. Finance Canada said the funding can support measures such as reducing development fees on new homes and strengthening programs that encourage housing construction.
The design gives provinces and territories discretion over how to use their allocations to improve housing supply. The federal release framed the measure as part of a broader effort to lower the cost of new homes and increase construction capacity.
Ontario is the example highlighted in the Finance Canada release. The federal government said Ontario is using its allocation to introduce a temporary program that would provide relief equal to the 5% federal portion of the HST on eligible new home purchases.
That relief builds on Ontario's decision to provide relief for its own 8% portion of the HST through temporary enhancements to the province's existing HST new housing rebate and HST new residential rental property rebate.
Finance Canada said Bill C-26 funding may also support efforts to improve internal trade by harmonizing regulations and increasing productivity in the home construction sector.
The measure connects tax relief with housing supply. For buyers and builders, the direct details will depend on provincial and territorial program design; for the federal government, the policy channel is funding tied to lower construction barriers and, in Ontario's case, HST relief on eligible homes.