OTTAWA — The federal government is partnering with the city of Ottawa to put $400 million to help build up to 3,000 affordable homes in the capital, Prime Minister Mark Carney said Monday.

The city will speed up the construction of homes by waiving development charges, permit fees and property taxes, Carney told a crowd of businesspeople at a regular breakfast event hosted by Ottawa Mayor Mark Sutcliffe.

The Build Canada Homes agency will help finance the construction of 2,000 of these units on federally owned land.

Carney said construction will start quickly.

“Shovels will be in the ground next year,” he said.

The prime minister did not stick around to take any questions from media following the announcement, but Sutcliffe spoke with reporters for about 15 minutes afterward.

Sutcliffe said details of how the financing will break down will be presented in a report to city council early in the new year.

“I’m proud to be the first city to sign a deal like this with Build Canada Homes. We want to lead the way on housing,” he said.

“We’ll be supporting their efforts to build affordable homes on federal land. They’ll be supporting our efforts to advance the affordable homes that we have in our pipeline.”

The federal Build Canada Homes agency is meant to act as a developer to quickly stand up affordable housing at scale, including projects on public lands.

It was marketed in the Liberal election platform as a way to build at a “scale and at a speed not seen since the Second World War.”

At the same event, Sutcliffe announced retired general Rick Hillier will head a new “task force” aimed at finding more economic opportunities for Ottawa-based defence companies and securing funds from the federal government. That project will launch in the new year.

The city’s push for federal defence dollars comes as the Carney government moves to slash the number of public servants — threatening the local economy — and boost military spending to meet Canada’s NATO commitments.

The mayor pointed out the National Capital Region is already home to some 330 defence-related companies.

“What we want everyone to understand — and in particular the federal government, as they prepare to make historic investments in defence technology — is that we are extremely well positioned to receive a lot of that investment, to grow the companies that are doing amazing work already in this space, to launch new businesses, products and services, dual-use technologies,” Sutcliffe said.

The National Capital Region is mostly represented in Parliament by Liberal MPs, including Carney and Defence Minister David McGuinty.

Carney said in his speech the city’s “new Defence Innovation Hub strategy will help position Ottawa to become a global defence hub.”

The federal government also announced it is putting $1.2 million into a pilot project aimed at finding new ways to address addiction issues in the city.

This report by The Canadian Press was first published Dec. 8, 2025.

Kyle Duggan and David Baxter, The Canadian Press