#4 - How the Building Ontario Fund Can Unlock your Rental, Long-Term Care or Infrastructure Project
Is Your Project a Fit and Positioned for Financing?
This Issue:
What is the Building Ontario Fund (BOF)?
What’s New with the BOF?
How the BOF Decides What to Fund
Investment Example
Take Action - Position Your Project
1. What is the Building Ontario Fund?
The Building Ontario Fund (BOF) was announced in late-2023 and created in 2024 to help get big, revenue-generating projects in Ontario get off the ground – especially rental housing, long-term care and infrastructure projects.
Here’s what you need to know:
What it funds: Projects in five key areas – Long-term care, affordable housing/student housing, energy, transportation and municipal and community infrastructure.
Who it funds: Partners with the private sector/institutional investors and Indigenous Partners.
How it works: Provides up to 50% project financing alongside private and institutional investors.
Leadership: BOF is a board-governed crown agency. Ontario’s Minister of Finance, Peter Bethlenfalvy, has laid out foundational priorities for the agency.
Why it Matters: BOF is a gap financier. It fills funding gaps through equity, debt or guarantees to get projects built that otherwise wouldn’t be built.
2. What’s New with the BOF?
Image Source: Doug Ford | LinkedIn
The BOF has recently levelled up - and yes - its getting stuff done already.
Here’s what’s new:
Major Capital Injection: Through Ontario’s 2025 Budget, BOF’s capital allocation grew from $3B to $8B. This is a big vote of confidence from the Province and means more financing for eligible projects – especially where private capital needs a partner. Funds will be available to BOF in the form of cash when they call for it and proceeds from investments will go back into the fund (evergreen).
Expanded Indigenous Financing: Effective Q2 2025, the BOF will now run the Indigenous Opportunities Financing Program (IOFP) on behalf of the Province (previously administered by the Ontario Financing Authority under a different program name). The loan guarantee program will be expanded. Funding will increase from $1B to $3B in loan guarantees and the scope will now cover energy, pipelines, mining, and critical minerals – not just electricity projects. The program has been open to entities that are wholly owned by Indigenous communities to provide a Provincial guarantee to finance equity investments in eligible infrastructure projects. The parameters for this expanded program will be developed over the coming months.
Leadership: In late-2023, the Province appointed its inaugural chair, Brian J. Porter, and the distinguished board was filled over 2024. In late-2024, the BOF appointed its visionary CEO, Michael Fedchyshyn. He has experience standing up complex and impactful government programs and agencies and a private sector infrastructure/investment background. In early 2025, the BOF named experienced C-suite members - CFO, Inna Kravitz and CIO, Anca Drexler. It is actively filling out other key roles and building up capacity.
Pipeline: The BOF is building up a robust pipeline of projects that are in various stages of review. So far, two projects have been announced (conditionally) in the long-term care sector.
Financial Product Offering: Soon, the BOF will be forming industry tables to continue to inform its financial product offerings, which are likely to evolve over time.
3. How the BOF Decides What to Fund
The BOF has developed an investment framework designed to support large-scale revenue-generating infrastructure projects that serve a significant public benefit.
Investment Criteria:
Location and Purpose: Projects must be in Ontario and align with one of BOF’s priority areas: Long-term care, affordable housing/student housing, energy, transportation and municipal and community infrastructure. Some of these area definitions have flexibility or are in the forming stage.
Public Interest: Projects should serve the public interest and deliver a public good, which makes up a key part of the business case (and interest rate determination).
Size and Scale: BOF investments should be a minimum of $100M per project, or $50M for projects that advance community and economic well-being for Indigenous communities.
Catalytic Impact: BOF applies a “but for” test, ensuring its investment is a critical factor enabling the project’s advancement, without displacing private capital. This test is used in other public sector funding programs too.
Revenue Generation: Projects must be revenue-generating from non-taxpayer derived sources, ensuring BOF investments can be repaid.
External Capital: BOF may provide up to 50% of a project’s total financing needs, with the remaining capital sourced externally - prioritizing Canadian investors.
Investment Process
Image Source: Building Ontario Fund
The BOF investment process involves several stages:
1. Assessment Against Criteria: Initial assessment against BOF’s criteria to determine alignment with the fund’s mandate
2. Project Evaluation: Preliminary due diligence and risk assessment
3. Investment Structuring: Development of investment structure to address financing challenges (‘standard terms’ OR bespoke and tailored to unique project requirements)
4. Final Review and Approval: Comprehensive due diligence, final approvals and financial close
4. Investment Example - Rekai Centre
Image Source: Building Ontario Fund
The BOF announced its first investment (agreement in principle) in January 2025 - unlocking the Rekai Centre at Cherry Place. The BOF will provide a $176.1M construction loan towards a new not-for-profit long-term care home in downtown Toronto (348-bed), subject to conditions.
This project, aimed at serving a high-needs community, had previously faced delays due (in part) to funding challenges and been stalled for years. BOF's involvement provided the necessary financial support to move the project forward, exemplifying its role in catalyzing essential infrastructure developments in Ontario.
5. Take Action - Position Your Project
The Building Ontario Fund has generated strong interest across the province, and competition for support will be significant.
It is critical that your project is clearly aligned with the fund’s mandate and criteria as a starting point.
From there, the projects that can best frame the catalytic impacts and public benefits, and the most attractive risk/return profile for the BOF will stand out in a crowded field.
Building Edge Strategies is a strategic consulting firm on a mission to unlock progress on projects that deliver housing, infrastructure and jobs. It provides strategic advisory, government relations and public affairs services to private and public sector clients.
Visit buildingedge.ca for more