This month the federal government passed the federal budget. The emphasis of the budget was strengthening Canada’s economy within the changing trade landscape that has threatened Canadian manufacturing while contributing to rising costs.
The Budget announced $51 billion for the Build Communities Strong Fund, however most of this is not new funding. Most of the $51 billion comes from re-profiled spending that municipalities had already incorporated into their capital investment plans, such as the Canada Housing Infrastructure Fund.
The new Build Communities Strong Fund will be administered by Housing, Infrastructure and Communities Canada. Some of the funding will flow through provincial and territorial governments to municipalities.
There are three streams:
- A provincial and territorial stream of $17.2 billion over 10 years, starting in 2026-27, to support housing-enabling infrastructure (e.g., roads, water/wastewater), health-related infrastructure (e.g., hospitals), and infrastructure at colleges and universities. To access funds, provinces and territories must agree to cost-match federal funding and to substantially reduce development charges and not levy other taxes that hinder the housing supply. This is a subsidy to developers and real estate holdings companies and reduces provincial and territorial tax revenue. The provincial and territorial stream sets aside $5 billion for a Health Infrastructure Fund. The requirement related to development charges and other taxes will not apply to this portion of the fund. This will help provinces and territories build much needed health care infrastructure.
- A direct delivery stream will provide $6 billion over 10 years, starting in 2026-27, to support regionally significant projects, large building retrofits, climate adaptation, and community infrastructure. Projects proposed under this stream are required to seek private sector investment, including private investment leveraged through Canada Infrastructure Bank financing, before being eligible for funding under this stream. This is privatization of public infrastructure. It also makes it difficult for small municipalities to access the funding since they do not necessarily have the capacity or connections to meet this requirement.
- The existing Canada Community-Building Fund will be rebranded as the initiative’s community stream. This stream will, as planned, provide $27.8 billion over 10 years, starting in 2026-27, and $3.0 billion per year ongoing to support local infrastructure projects. The current issues with the application process for this funding have not been resolved.
- Additionally, there is new funding of $1 billion over four years for an Arctic Infrastructure Fund, and $5 billion over seven years for a trade diversification corridors fund, which municipalities will be eligible for.
Budget 2025 also renews the First Nations Water and Wastewater Enhanced Program, with proposed funding of $2.3 billion over 3 years starting 2026-27. This should maintain progress on approximately 800 active projects, and continue work toward ending water advisories.
Housing
Budget 2025 included very few new announcements of funding for housing. While promising, the federal government still has not released details on how Build Canada Homes will operate. For CWWA members it is important that these programs be delivered in tandem with infrastructure funding to ensure that municipalities can support new housing developments.
For our private sector members there are programs to support innovation but these are primarily focused on technology and AI sectors. Continued work to build new trade partnerships both internationally and within Canada will also support growing businesses.