Ontario Moves to Cut Power Connection Costs in Bid to Boost Home Construction

Ontario’s government is preparing to overhaul how new homes and businesses connect to the electricity grid, a move it says could lower housing costs and accelerate construction across the province.

Energy Minister Stephen Lecce announced that legislation will soon be introduced to simplify and reduce the cost of grid connections, arguing that the current system places an unfair financial burden on developers and, ultimately, homebuyers.

Under existing rules, developers are often required to pay the full upfront cost of building new electricity infrastructure when constructing housing in growing or previously undeveloped areas. Lecce said this approach makes projects slow, expensive, and risky, discouraging builders from taking on new developments.

As an example, Lecce explained that a residential project with around 200 homes is currently responsible for covering the entire cost of new grid infrastructure. The proposed changes would instead require developers to pay only for the electricity load their homes are expected to use, significantly lowering initial capital costs.

“The way the system is set up right now, it’s making it harder to build where people actually want to live,” Lecce said, adding that few developers are willing to shoulder the uncertainty and extra expense tied to grid expansion.

The announcement comes as the Progressive Conservative government faces mounting pressure to deliver on its promise to build 1.5 million homes by 2031. While the government has reported progress, it has yet to meet its annual housing targets, though it narrowly missed last year’s goal after expanding how housing units are counted to include long-term care beds.

Housing Minister Paul Calandra has previously acknowledged that factors beyond provincial control, including high interest rates and economic uncertainty, have slowed construction. At the same time, developers have been urging governments at all levels to reduce development charges and other fees that add to the cost of building.

Industry groups say electricity connection costs are a major obstacle, particularly in fast-growing regions that require new substations and power lines before homes can be occupied.

The government argues that by spreading infrastructure costs more fairly over time, the proposed legislation could unlock stalled projects and encourage construction in new areas. Details of the bill have not yet been released, but Lecce said the goal is clear: make it easier, faster, and cheaper to connect homes and businesses to the grid and, in turn, get more housing built across Ontario.