Municipalities want Ottawa to match its housing ambitions with a long-term infrastructure plan focused on water, sewers, roads, transit and other core services, Federation of Canadian Municipalities president-elect Tim Tierney says.Jacques Boissinot/The Canadian Press
As consultations for the 2026 budget kick off on Parliament Hill, municipal and Indigenous leaders are urging Ottawa to provide more predictable, long-term funding for water systems, transit, roads and other core infrastructure needed to sustain housing growth.
The Carney government has switched to tabling budgets in the fall instead of the spring, meaning the finance committee’s prebudget consultations have followed suit. Those public hearings are now under way.
Canadians were invited to submit written briefs to the standing committee on finance by May 22, while the committee has started to hear from organizations across the housing, climate and non-profit sectors.
In April, multiple organizations separately renewed calls for more infrastructure funding, including the Federation of Canadian Municipalities, which represents more than 2,000 municipalities across Canada, and the Assembly of First Nations.
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FCM president-elect Tim Tierney, who appeared before the committee Tuesday, said in an interview that municipalities support the federal government’s goal of doubling housing construction, but warned that cities cannot meet those targets without matching infrastructure investment.
“You need the homes, but you need the infrastructure that goes along with it,” Mr. Tierney said.
For every home built, municipalities face an average infrastructure cost of roughly $107,000, he added.
“The problem is someone’s going to have to pay at the end of the day,” he said.
Mr. Tierney said municipalities want Ottawa to match its housing ambitions with a long-term infrastructure plan focused on water, sewers, roads, transit and other core services.
“If you want to build more neighbourhoods and more housing, you need the infrastructure, the non-sexy stuff,” he said. “[Municipalities are] not looking for the big, flashy things any more; they’re looking for the core services,” he added.
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Ahead of the 2026 budget, he said, they are seeking more predictable and transparent infrastructure funding programs so municipalities – particularly rural and mid-sized communities – are not left carrying unsustainable costs as housing development increases.
In an e-mailed statement, Housing, Infrastructure and Communities Canada said the federal government is working with provinces, territories and municipalities to align infrastructure funding with housing construction.
It pointed to the $51-billion Build Communities Strong Fund as the centrepiece of that approach, saying it is intended to support local infrastructure while encouraging other governments to reduce barriers to housing development.
The 2025 Liberal campaign platform promised to build homes “at a scale and at a speed not seen since the Second World War.” However, Canada Mortgage and Housing Corp. said in its February housing market outlook report that new home construction is set to decline through 2028 ”as developers face high costs, weaker demand and more unsold homes."
Last year’s federal budget, which introduced the Build Communities Strong Fund, also cut $5-billion over 10 years to Ottawa’s key transfer program for municipal transit.
Those cutbacks have drawn concern from transit agencies. In a joint statement Monday, the Société de transport de Montréal, the Toronto Transit Commission and Vancouver’s TransLink called on Ottawa to reverse the cuts.
The agencies warned that uncertainty around long-term transit funding could slow major projects and maintenance work in Canada’s largest metropolitan regions.
In a news release after the government’s April Spring Economic Update, National Chief Cindy Woodhouse Nepinak of the Assembly of First Nations said her organization has long called for “sustained and adequate investments.” She cited its Closing the Infrastructure Gap report, which outlines inequities in housing, transit, health care and access to clean water in many communities.
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Municipal leaders say additional infrastructure funding is needed to complement the federal Housing Accelerator Fund, which they say has helped cities such as Ottawa and London, Ont., speed up housing approvals.
In London, the fund has helped the city accelerate approvals and experiment with new approaches to housing development, said Josh Morgan, the city’s mayor and chair of the FCM’s Big City Mayors’ Caucus.
Under the program, London negotiated the conversion of vacant downtown office space into housing and saw a sharp rise in unit approvals.
“Back in 2022, we were doing about 4,000 unit approvals a year. … Last year we did 17,000. The year before that, we did 23,000,” Mr. Morgan said.
“In other words, we did 40,000 approvals in the last two years.”
But Mr. Morgan said municipalities still rely heavily on federal and provincial partnerships to build the infrastructure needed to support that growth. Cities are responsible for roughly 60 per cent of Canada’s infrastructure while collecting “nine cents of every tax dollar,” he said.
He added that infrastructure needs to extend beyond water, waste water and roads to include community amenities such as recreation centres and parks.
“If we just build roads, sewers, water and houses, we’re not talking about quality of life,” he said.
Mr. Morgan also said municipalities need more complete housing programs that pair construction funding with long-term operational support, particularly for supportive housing projects.
“We can’t build supportive housing with capital dollars and then operate it if we don’t have access to operating funding.”