The federal government will provide up to up to $2.55 billion in low-cost loans to support the construction of seven rental-apartment projects in Toronto.

The projects will comprise more than 4,800 rental-apartment units, including at least 1,000 affordable-housing suites.

The funding, provided through the Apartment Construction Loan Program (ACLP), is part of a collaboration between the federal government and the City of Toronto aimed at accelerating housing development. The city will contribute approximately $234.8 million in financial incentives, including relief on development charges, fees, and property taxes, to help reduce building costs.

Federal and civic officials announced the move Wednesday at a news conference in Toronto.

“Building more homes requires working together, and this partnership with the city will bring down costs and deliver more homes for Toronto,” said federal Housing Minister Nate Erskine-Smith.

The investment builds on a recent $975-million initiative, including $325 million from the federal government, to advance the revitalization of Toronto’s waterfront, which will support the construction of more than 14,000 new homes. The investment announced Wednesday could support approximately 1,200 of those 14,000 units.

“Every Torontonian deserves an affordable place to call home,” said Toronto Mayor Olivia Chow. “Today’s landmark housing agreement will reduce barriers so more than 4,800 homes will be built faster.

“By working together with our federal partners, we are securing affordable homes in Toronto for generations to come.”

In an interview with The Toronto Star, Erskine-Smith said Ontario’s housing challenge starts with Toronto in many ways.

“The exodus of folks from Toronto — because they can no longer afford to live in Toronto — starts to impact other communities given the musical chairs of housing unaffordability,” he told the Star.

He rejected the idea that the large investment is designed to bolster the Liberal government’s hopes in an upcoming election. Prime Minister Mark Carney is widely expected to call an election before Parliament resumes sitting on March 25.

“This isn’t new spending in the sense of ‘we’re on the eve of an election, and let’s come up with some new promises that are back-of-the-napkin promises, and have not been costed, and are more political than they are policy-driven,’” he told the Star.

He also suggested in the interview that the investment was important to help Canada deal with a future large pullback in housing investments due to U.S. tariffs on Canadian imports.

“This announcement is all the more important because we see such uncertainty,” Erskine-Smith told the Star.

In addition, the feds and city will provide $425.8 million to support people experiencing homelessness, particularly those living in encampments. Ottawa is supplying $25.8 million over two years, while Toronto is contributing $400 million.

The funds are being made available through the Unsheltered Homelessness and Encampments Initiative (UHEI).

Additionally, under the Reaching Home program, the federal government is allocating an extra $62.7 million to Toronto to help service providers prevent and reduce homelessness.

The ACLP, part of Canada’s National Housing Strategy launched in 2017, is intended to be a key tool in addressing the country’s housing crisis. The program was recently expanded under Canada’s Housing Plan, which aims to unlock millions of new homes.

The $55 billion ACLP provides low-cost financing for rental-apartment projects targeting middle-class Canadians to help increase housing supply with minimal cost to taxpayers.

Pictured: Downtown Toronto waterfront.

Photo: 4kclips / Shutterstock.com