“compiled: Elmili TK”
After months of political wrangling, threats, and withheld funding, Ottawa and Queen’s Park have quietly struck a fresh agreement worth hundreds of millions of dollars to revive Ontario’s affordable housing program — a move that ends a prolonged standoff and ensures federal funding will continue through 2028.
The agreement, finalized behind the scenes in March 2025 shortly after Doug Ford’s cabinet shuffle and Mark Carney’s appointment to the Prime Minister’s Office, establishes a new three-year Action Plan under the National Housing Strategy. It outlines targets for rent-assisted housing and reaffirms collaboration between the two levels of government following a period of intense friction.
A Deal Months in the Making
According to documents obtained by Global News through freedom of information laws, the newly minted Ontario Housing Minister Rob Flack was briefed in March that his first priority would be to approve a renewed bilateral framework with Ottawa. The agreement was deemed essential to secure ongoing federal contributions to the province’s housing strategy.
A federal spokesperson confirmed that a revised action plan covering 2025 to 2028 was agreed upon in March, allowing federal dollars to continue flowing into Ontario housing programs.
A Year of Tension
The new deal marks the end of a bitter political impasse that escalated throughout 2024. Then-Federal Housing Minister Sean Fraser had accused Ontario of falling short on its obligations under the National Housing Strategy, citing a failure to build new units and an overreliance on refurbishing older stock. Ottawa responded by threatening to withhold $357 million in funding.
Ontario’s then-Housing Minister Paul Calandra pushed back, claiming the province had long distributed housing funds through local service managers and challenged the federal government to do the same — a challenge Ottawa later accepted.
By May 2024, the federal government had effectively bypassed Queen’s Park and funneled housing dollars directly to municipal service managers. Calandra welcomed the move, framing it as a victory for Ontario’s longstanding housing distribution model.
Following the winter snap election, Calandra was reassigned to the education portfolio, and Fraser took over as Justice Minister, creating an opening for a reset in intergovernmental relations.
A Reset Underway
Ontario’s new Housing Minister Rob Flack appears keen to de-escalate tensions. His office has indicated a desire to rebuild a constructive relationship with Ottawa. The newly signed plan is expected to focus heavily on rent-assisted units, a priority for both governments amid rising housing costs and demand for affordable options.
The original National Housing Strategy agreement between Ontario and the federal government was signed in 2018 and set to run through 2028. The new action plan effectively extends and revitalizes the funding commitments for the final three years of the agreement.
Looking Ahead
While the funding deal brings much-needed stability to Ontario’s affordable housing sector, questions remain about how both governments will meet their ambitious targets and whether this uneasy peace will last. Still, for now, a critical flow of funding has been restored — and thousands of Ontarians in need of housing may stand to benefit.
