The federal and Ontario governments, along with the city, have reached a cost-sharing agreement to advance the Waterfront East Transit project, a major infrastructure initiative along Toronto’s eastern waterfront.

The three governments committed Monday to invest $1 billion apiece in the project. Waterfront East Transit is expected to support the development of about 75,000 homes, helping address housing demand while fostering long-term growth across the city and region.

“While we build major infrastructure, we’re also accelerating local infrastructure projects that frankly have stalled too long,” Prime Minister Mark Carney told reporters during a news conference. “Canadians deserve faster, more reliable commutes back home and to our major cities.”

The three governments say the investment builds on a previously announced $975-million, three-level funding commitment for waterfront infrastructure. The transit project is expected to generate more than 100,000 jobs and contribute about $13.2 billion in economic value.

The future transit line will extend higher-order transit service to the Port Lands, including the new island of Ookwemin Minising, with the aim of unlocking new neighbourhoods, improving connectivity, and supporting economic growth, said the governments.

“This is the critical missing piece needed to unlock the eastern waterfront,” Mayor Olivia Chow told reporters during a news conference. “Generations of people will live in these communities and ride their waterfront transit line. That is city-building and it is nation-building.”

Officials say Waterfront East is a key component in revitalizing the eastern waterfront and enabling large-scale residential development.

The line will serve more than 150,000 residents and workers and is projected to accommodate over 50,000 daily riders, linking into a broader transportation network of roads, trails, bridges, and streetcars connected to major transit hubs.

“This investment reflects the strength of tri-government collaboration and a shared commitment to waterfront revitalization,” said Kevin Sullivan, a federal-provincial-municipal agency that co-ordinates the revitalization 800 brownfield acres on the waterfront.

“By delivering transit, governments are unlocking housing, enabling economic opportunity, and connecting communities and destinations along Toronto’s eastern waterfront.” 

The agreement reflects ongoing collaboration between all three levels of government to deliver infrastructure aimed at creating more connected, inclusive, and complete communities along Toronto’s waterfront, officials said.

The federal and provincial investments are part of a new 10-year agreement between the Carney government and Ontario.

During the news conference, the federal and Ontario governments also announced that they have signed a new agreement that will see $8.8 billion in joint funding over 10 years to support housing-enabling infrastructure, with the goal of accelerating homebuilding and improving affordability across the province.

Premier Doug Ford and Carney said the Canada-Ontario Partnership to Build will focus heavily on reducing municipal-development charges, which can significantly increase the cost of new homes. The funding is expected to help municipalities cut those charges by up to 50 per cent, while offsetting lost revenue through infrastructure support. Municipalities will also be expected to contribute to the reductions as part of a coordinated effort to boost housing supply.

The agreement also includes measures to lower costs for homebuyers through a Harmonized Sales Tax rebate. Eligible buyers of new homes valued up to $1 million would see the full 13% HST removed, with partial rebates extended to homes priced up to $1.5 million. The federal government will provide $875 million toward the initiative, contributing to an estimated $2.2 billion in total tax relief and offering buyers savings of up to $130,000.

In addition to housing measures, the partnership outlines co-operation on several major transit and infrastructure projects. These include the three-way funding arrangement with the City of Toronto for the Waterfront East, efforts to expand GO rail service through the GO 2.0 program, and continued planning for the Alto high-speed rail project linking Toronto and Quebec City.

“Today’s agreement will be transformational for Ontario and Canada, delivering new homes, transit and infrastructure and supporting hundreds of thousands of good-paying jobs for Ontario workers,” said Ford. “Our government will continue to deliver on our plan to protect Ontario in partnership with the federal government and municipalities by lowering the cost of building, getting shovels in the ground faster, cutting red tape and investing in workers.”

The deal also reaffirms commitments to priority transit projects across the Greater Toronto and Hamilton Area, including the Ontario Line, Eglinton Crosstown West Extension, Scarborough Subway Extension, Yonge North Subway Extension and the Hamilton LRT, as governments aim to support economic growth, job creation and improved mobility amid ongoing economic uncertainty.

Pictured: Future Waterfront East Transit line in Toronto.

Rendering: Waterfront Toronto