2025 Long-Term Care Home Capital Funding Policy

Program overview

Through the 2025 Ontario Budget: A Plan to Protect Ontario, the government has launched the Long-Term Care Capital Funding Program (CFP) to ensure long-term care operators and builders have additional flexibility and support to continue Ontario’s historic level of construction. This funding program is part of the government’s plan to protect Ontario by building for the future, while ensuring seniors receive quality care and services, including the required 4 hours of direct care per resident per day.

The CFP provides funding to long-term care home operators to build new and redevelop existing long-term care beds that meet the current long-term care design standards. This funding policy sets out the requirements and conditions for CFP funding.

Refer to the definitions set out in Appendix A: Definitions.

Eligibility

Eligible projects

An operator may be eligible for CFP funding for new long-term care beds or redeveloped beds.

New long-term care beds

Developing net-new beds as part of a long-term care home project.

Redeveloped beds

Redeveloping or replacing existing beds to comply with the current design standards. Only the following beds are eligible for redevelopment:

• beds with “B”, “C” or “upgraded D” structural classifications
• beds with "A" structural classifications in homes with beds with “B”, “C” or “upgraded D” structural classifications.

To receive CFP funding, the operator must:

• have Ministry of Long-Term Care (MLTC) (ministry) approval to receive CFP funding for the project
• meet all applicable requirements in the project’s development agreement.

Projects approved under previous long-term care capital development funding programs that have not received ministry approval to construct before May 1, 2025 may be eligible for CFP funding, subject to ministry approval.

Funding

The total eligible project cost is the sum of all project costs that are eligible according to the Cost Eligibility Guide. The total eligible project cost is used to calculate CFP funding. Please refer to Appendix B: Cost eligibility guide for more details on what costs are eligible and ineligible under the CFP.

The value of Ministry CFP funding to eligible operators is set at up to 85% of eligible expenditures during the construction period:

• up to a funding maximum which varies depending on the project’s location (see Funding Maximums for more details)
• up to a maximum gross floor area equal to 800 square feet per new or redeveloped bed (see Funding Maximums for more details).

The eligible operator will be responsible for securing all remaining project costs that exceed the project’s eligible CFP funding.

Funding components

The total eligible CFP funding consists of 3 components. The amount for each component varies by operator type. The combined total amount of all 3 funding components cannot exceed the applicable funding maximum for the project (see Funding Maximums for more details).

Design and planning grant

Funding provided to eligible non-profit operators, municipal operators and Indigenous operators after executing a development agreement with the ministry. The grant is meant for planning and project-related professional and consultation services. The grant is 5% of the estimated CFP funding, up to a maximum of $500,000.

Note: For-profit operators are ineligible for the design and planning grant.

Construction progress payment

Funding provided between the start of construction and the first resident date (See Funding percentages and timing by operator type for when the funding will be provided).

Capital per diem payment

Funding provided to operators monthly (calculated on a per bed per day basis) over a consecutive 25-year period starting after the first resident date. This funding is to be used towards repaying costs of construction and financing related to the project.

Funding percentages and timing by operator type

The value of Ministry CFP funding to eligible operators is set at up to 85% of eligible expenditures during the construction period. The percentage breakdown of each funding component and timing of funding varies by operator type and is subject to applicable requirements set out in the project development agreement:

Non-profit operators and municipal operators

Design and planning grant: 5% of estimated CFP funding, up to a maximum of $500,000 provided once the development agreement is executed.

Construction progress payment: Up to 35% of eligible CFP funding (minus the design and planning grant), provided at the following schedule:

• 50% of the construction progress payment will be provided after the operator receives the ministry’s approval to start construction of the project.
• 50% of the construction progress payment (minus the design and planning grant) following the substantial completion of construction of the final phase of the project.

Capital per diem payment: 65% of eligible CFP funding, provided after the home’s first resident date for the final phase of the project.

Note:

• For phased projects, final construction progress payments and initial capital per diem payments are paid based on the final phase of the project or as approved by the ministry.
• Non-profit operators do not include for-profit associated not-for-profit operators (refer to Appendix A: Definitions).

Indigenous operators

• Design and planning grant: 5% of estimated CFP funding, up to a maximum of $500,000 provided once the development agreement is executed.
• Construction progress payment: CFP funding (valued at up to 85% of total eligible project expenditures minus the design and planning grant) is paid out by the first resident date with no more than 50% paid prior to the mid-point of construction. Payment will be made on a payment schedule that is customized to each individual project as approved by the ministry and set out in the development agreement.

For-profit operators

• Construction progress payment: 20% of eligible CFP funding, provided following the substantial performance of construction of the final phase of the project.
• Capital per diem payment: 80% of eligible CFP funding provided after the home’s first resident date for the final phase of the project.

Note: For phased projects, final construction progress payments and initial capital per diem payments are paid based on the final phase of the project or as approved by the ministry.

Funding maximums

Market segments

The funding maximum that is used to calculate CFP funding varies depending on the project’s location. For the purposes of this policy, the province is divided into 4 market segments. See Market segment map for long-term care development for more details. Specifically:

Greater Toronto and Hamilton area (GTHA): projects located within census subdivisions that are part of the Toronto, Durham, Peel, York, Halton and Hamilton census divisions.

North-urban: projects located in the following census metropolitan areas within the North-East or North-West Ontario Health Regions - Greater Sudbury, Thunder Bay, Sault Ste, Marie and North Bay.

North-remote: projects located within the North-East or North-West Ontario Health Regions outside of the North-Urban market segment.

Southern Ontario (rest of the province): projects located within census subdivisions that are part of the East, West or Central Ontario Health Regions outside of the GTHA market segment.

Maximum CFP funding

The table below shows the maximum amount of CFP funding that a project could receive. The ministry will not cover any project costs that exceed the funding maximums.

The amount of CFP funding may also be adjusted if applicable eligible costs are less than $370,000 per bed or in excess of $1,100 per square foot.

Maximum gross floor area

Projects will be funded based on a maximum gross floor area equal to 800 square feet per bed. Refer to Appendix C: Floor space calculation on how to calculate the project’s per bed gross floor area. The project’s gross floor area calculation will be determined based on the final approved consolidated set of drawings.

A project may have a gross floor area over 800 square feet per bed, but all project costs for any additional square footage beyond this limit will be the responsibility of the operator. Any projects that exceed this limit will have their CFP funding adjusted to a gross floor area equal to 800 square feet per bed.

Projects may have a gross floor area that is less than 800 square feet per bed as long as the project complies with the requirements of the design standards.

Terms and conditions

For an operator to receive and retain CFP funding:

• there must be an executed development agreement between the ministry and the operator
• the operator must meet all conditions and requirements of the development agreement and this policy to the satisfaction of the ministry
• the project must comply with the design standards

Determination of funding

Only projects with an executed development agreement specifying this funding policy may be eligible for CFP funding.

Upon approval to begin construction of a CFP project, the ministry will inform the eligible operator in writing of the total expected ministry funding based on the approved design plans and cost estimates. Amounts may be adjusted later based on final approved total eligible project costs in the Final Statement of Disbursement and subject to applicable limitations and conditions, in accordance with the terms outlined in the development agreement.

Capital per diem payments

The ministry will commence to provide the capital per diem payments to an eligible operator, where applicable, when it is satisfied that all of the following terms and conditions have been met:

1. The project has been constructed in accordance with the applicable development agreement.
2. All terms and conditions set out in the development agreement and this policy have been complied with.
3. The operator has entered into or amended as required, a funding agreement with the ministry or an agency providing funding in respect of the eligible beds constructed under the development agreement.
4. The necessary licence(s) or approval(s) to operate the beds constructed under the development agreement has or have been obtained by the operator and is or are continuously maintained in accordance with applicable law.
5. A pre-occupancy review has been completed by the ministry and the operator has received occupancy approval from the ministry to admit residents to the beds constructed under the development agreement.
6. The first resident has been admitted to one of the long-term care beds constructed by the operator under the development agreement, under the final phase of the project where applicable.

Note: The capital per diem payment may be adjusted if any overpayments of the design and planning grant or construction progress payment are identified.

The operator shall first use any capital per diem payments towards the agreed scheduled repayment of any loans or other financing arrangements entered into by the operator to pay for the construction of the beds under the development agreement.

Design and planning grant

The ministry will provide the design and planning grant to an eligible operator for each home, where applicable, when it is satisfied that all the following terms and conditions have been met:

• The operator must enter a fully executed development agreement with the ministry.
• The ministry is satisfied that the operator has fulfilled all the requirements applicable at that time.
• The operator has fulfilled, to the ministry’s satisfaction, any other requirements that the ministry specifies to support the performance of obligations under this policy and the development agreement in respect of the design and planning grant (for example, registration on title of the requirement for ministry consent to any disposition of the property).

Construction progress payments

The ministry will provide construction progress payments to an eligible operator, where applicable, when it is satisfied that all of the following terms and conditions have been met:

• For construction progress payments based on substantial performance, the operator provides a certificate of substantial performance satisfactory to the ministry, signed by the operator’s architect for the project, certifying that all the construction contracts relating to the project have been substantially completed or such other evidence of substantial performance as is satisfactory to the ministry.
• For construction progress payments based on a set percentage of construction having been performed, the operator provides certification or evidence, satisfactory to the ministry, of having reached the applicable percentage of completion that is required with respect to the payment.
• The ministry is satisfied that the operator has fulfilled all the requirements applicable at that time in accordance with the development agreement.
• The operator must have tendered construction work representing at least 75% of the estimated total eligible project cost in accordance with applicable requirements for public or competitive tendering included in the project’s development agreement.
• The operator has fulfilled, to the ministry’s satisfaction, any other requirements that the ministry specifies to ensure the enforceability of the repayment and other obligations under this policy and the development agreement in respect of the construction progress payment (for example, registration on title of the requirement for ministry consent to any disposition of the property).

Market segments

• The applicable market segment, based on the categories set out in maximum CFP funding, will be specified in the development agreement for each project, which shall be considered definitive and final.
• The funding for the project (subject to all applicable requirements) will be based on the market segment that is specified in the development agreement.

Projects from previous policies

Projects approved under previous capital development programs with an executed development agreement that have not received ministry approval to construct prior to May 1, 2025, may be eligible for CFP funding, subject to ministry approval.

If the ministry approves such a project for funding under the CFP:

• A new development agreement under the CFP would need to be executed, replacing any previous executed development agreements related to the same project.
• Any ministry funding paid to the operator under a previous development agreement would either need to be deducted from any funds provided under the CFP or repaid, as determined by the ministry.

Funding repayment

The ministry may cease any CFP funding (including the design and planning grant, construction progress payments or capital per diem payments) and require the operator to repay any CFP funding they received in respect of the project, in accordance with the applicable development agreement, including if:

• the project development agreement is terminated before all the conditions for receiving all applicable project CFP funding are met.
• the operator does not operate the project beds as long-term care beds in accordance with the project development agreement for 30 years from the date that the first resident moves into the final phase of the project.
  • Where the project was completed and the beds were operated for a portion of the 30 years, the operator will only need to repay a pro-rated portion of the CFP funding, based on how much time is left in the 30-year term from when they stopped operating the project beds as long-term care beds.
• the actual project costs do not meet the requirements in the development agreement or this policy, in which case the amount of funding will be adjusted accordingly and any overpayment recovered.
• the conditions for receiving or retaining the design and planning grant (if eligible) and construction progress payments are not met within the period agreed to in the development agreement.
• the operator closes any beds funded by the CFP within 30 years of the beds commencing operation, without replacing them with ministry approval with beds that meet the same standards (subject to prorating according to how much time is left in the 30-year term from when they stopped operating the beds).

If the ministry determines that a non-profit operator is considered a for-profit-associated not-for-profit operator, the ministry may charge interest on the amount that it determines to be an overpayment from the time it was paid until such a time the operator becomes eligible to receive the funds.

Beds transfer to another operator

If beds are transferred to a new operator with all required approvals and the new operator assumes all the former operator’s obligations, by way of an agreement between the former operator, the new operator and the ministry, the new operator maybe eligible to receive the outstanding applicable remainder of the CFP funding, subject to all applicable conditions and requirements and the terms of that agreement.

Obligations that the new operator would assume would include:

• Operation of the long-term care beds constructed under the development agreement or replacement beds, subject to all required approvals, that meet the same standards, as determined by the ministry.
• Repayment of any CFP funding, where applicable, in accordance with the development agreement to the satisfaction of the ministry.

An operator cannot meet financial obligations

Where an operator cannot meet its financial obligations, the operator or home may be placed under receivership, subject to applicable laws and agreements. Typically, the receiver, in conjunction with a ministry-approved management firm, will continue to operate the home in the name of the existing operator until a new operator is approved. This is subject to approval under Ontario Regulation, section 110 of the Fixing Long-Term Care Act (FLTCA) and may continue until such time as a new operator, also subject to approval under the act, assumes control of the home. (See Bed transfer to another operator). Ministry funding continues during this interim period if the home continues to be operated in the name of the Operator in accordance with applicable requirements.

If no new eligible operator is found and approved or the home is converted to another use, residents may be relocated and the home may be closed, all subject to applicable requirements. All funding would end and the operator may need to repay CFP funding in accordance with the development agreement and applicable law.

Limitations and clarifications

This policy does not create any legal obligations for the ministry, except to the extent that it may be incorporated as part of a development agreement. Any such legal obligations will be subject to the terms in the development agreement.

This policy does not apply to long-term care construction under development agreements under other ministry funding policies, unless the development agreement has been amended or replaced to state that this policy applies.

Everything in this policy and any contingencies referred to and any others that arise, are subject to applicable law and agreements.

The ministry may occasionally provide clarifications, interpretation bulletins or forms related to this policy.

Other relevant funding programs

Basic transition support

The basic transition support funding provides eligible operators that have an executed development agreement under this policy with $300 per bed one-time funding for incidental, non-construction costs that are associated with relocating residents and equipment while redeveloping long-term care beds.

Eligible costs

Eligible costs include:

• helping move residents and their belongings or the home’s equipment (such as medical, dietary and laundry equipment)
• hiring a moving coordinator, extra staffing for the move or professional movers
• supplying transportation for the move (such as non-emergency patient transportation)

This funding is only provided for operators redeveloping beds that were in operation immediately prior to redevelopment.

Ineligible costs

This funding is not available for:

• new long-term care beds that were not previously in operation but have been approved to be added to a redevelopment project or that are being developed separately.
• beds that immediately prior to their redevelopment were beds in abeyance or beds that were receiving Occupancy Reduction Protection.

Eligible operators will automatically be considered for Basic Transition Support funding and do not have to apply separately. If approved, funding will be provided after the first resident date.

Occupancy reduction protection

Eligible operators that have a development agreement under this policy are eligible to apply for occupancy reduction protection for beds that are temporarily or permanently closed. For the purposes of the CFP, occupancy reduction protection would be for projects that are redeveloping existing long-term care beds.

For more information on the Occupancy Reduction Protection program, please contact the ministry.

Appendix A: Definitions

• Bed: accommodation for one resident in a long-term care home that complies with applicable law and the design standards.
• Beds in abeyance: licensed or approved long-term care home beds that are unavailable for occupancy as per ministry approval and are not receiving Occupancy Reduction Protection.
• CFP: the Capital Funding Program (the program under this policy).
• CFP funding: funding provided under the Capital Funding Program.
• Cost eligibility guide: Appendix B: Cost eligibility guide specifies in detail what is included and not included as eligible project costs.
• Design standards: the design standards set out in the Long-term care design manual, as referred to in the development agreement.
• Development agreement: an agreement entered into between the Minister of Long-Term Care and the operator in respect of the development or redevelopment of beds and the provision of CFP funding in respect of that development or redevelopment.
• Eligible project costs: the project costs that are identified as eligible in the Cost Eligibility Guide (Appendix B). 
   
• First resident date: the day that the operator admits the first resident to one of the beds that have been developed or redeveloped, subject to applicable requirements.
• FLTCA: means the Fixing Long-Term Care Act, 2021 or successor act.
• For-profit-associated non-profit operator (NFP) operator: an Operator, other than an Indigenous Operator, that is a non-profit entity as defined in the Ontario Regulation, section 317 and that is, in the determination of the ministry,
  • controlled directly or indirectly by a for-profit entity or under substantially the same control, directly or indirectly, as a for-profit entity
  • affiliated with a for profit entity
• For-profit entity: a for-profit entity as defined in Ontario Regulation, section 317.
• For-profit operator: an operator that is a for-profit entity or a for-profit associated NFP operator, but does not include an Indigenous operator.
• Funding maximum: maximum amount of CFP funding per bed provided towards a project based on project location.
• Gross floor area: for the purposes of this policy, is the gross floor area of the long-term care home project, as determined in accordance with Appendix C: Floor space calculation.
• Indigenous operator: an operator that is eligible to establish and maintain a First Nations home under Ontario Regulation, section 132 of the Fixing Long-Term Care Act (FLTCA) and also includes any other operator that aims to primarily serve Indigenous residents where the operator is recognized by the ministry in writing as an Indigenous operator.
• Long-term care home: a long-term care home under FLTCA.
• Market segment: an area of the province that has a specific funding maximum, as set out in funding maximums.
• Ministry: the Ministry of Long-Term Care.
• Municipal operator: an operator that is eligible to establish and maintain a municipal home under Part IX of FLTCA.
• Non-profit operator(s): means an operator that is a non-profit entity as defined the Ontario Regulation, section 317 and that is not:
  • a municipal operator
  • an Indigenous operator
  • a for-profit associated not-for-profit operator
• Ontario Health (OH): an agency of the Government of Ontario that oversees health care planning and delivery across the province.
• Ontario Health (OH) regions: There are 6 Ontario health regions. For the purposes of this policy, the Ontario Health regions are one of the parameters used to define the market segments, which include North-East region, North-West region, East region, Central region, Toronto region and West region.
• Operator: a person (legal entity) that operates a long-term care home pursuant to a licence under Part VIII of FLTCA or pursuant to an approval under Part IX of FLTCA or a person (legal entity) with whom the ministry contracts to develop and operate a long-term care home, subject to applicable requirements, including the FLTCA. 
   
• Present value : the current value of a future sum of money as determined by the ministry.
• Regulation: Ontario Regulation 246/22, under the FLTCA or successor regulation.
• Structural classification: existing long-term care beds have structural classifications that have been determined previously by the ministry, based on which design manual or regulatory requirements they complied with at that time. Some homes have different structural classifications for beds in different parts of the home. The structural classifications that the ministry has determined reflect the following:
  • ‘New’ beds: Beds that comply with a Ministry approved Long-term care design manual dated 1999 or later (as identified in a development agreement with respect to the beds).
  • ‘A’ Beds: Beds that substantially comply with the 1999 Long-Term Care Facility Design Manual
  • ‘B’ Beds: Beds that substantially exceed the structural standards of the 1972 Nursing Homes Act Regulation
  • ‘C’ Beds: Beds that meet the structural standards of the 1972 Nursing Homes Act Regulation
  • ‘Upgraded D’ Beds: Beds that do not meet the structural standards of the 1972 Nursing Homes Act Regulation but were upgraded under the 2002 D Bed Upgrade Option Guidelines.

Appendix B: Cost eligibility guide

The sum of all eligible project costs (referred to as the total eligible project costs), in conjunction with the funding maximums and the maximum eligible funding for floor space, is used to determine how much CFP funding a project would receive, subject to applicable conditions.

This section will assist operators to:

• identify which long-term care capital development project costs would be considered an eligible project cost as part of an approved CFP project
• complete the CFP application form, as well as the Initial Estimate of Cost (IEC), Final Estimate of Cost (FEC) and Final Statement of Disbursement (FSD) forms at various stages of the project.

The following tables outline the eligible direct and indirect construction costs, as well as land costs that are eligible for funding under the CFP only (excludes self-funded beds).

Notes:

• Projects under existing development agreements (DAs) that are not eligible for CFP funding would continue to use the costs that are identified in the DA applicable to the project.
• Paid taxes should be included as part of eligible project costs.
• If non-long-term care construction costs are included in project tender documents, the operator must identify the percentage of the construction costs attributable to the long-term care project only.
• Project costs must align with the scope of the project to the ministry’s satisfaction and the ministry may request additional supporting documentation to substantiate project costs.

Contact your ministry project management team if you have any questions about eligible project costs. If you have not been assigned a project manager, please email LTCdevelopment@ontario.ca.

Appendix C: Floor space calculation

The gross floor area per bed under this policy is calculated by taking the sum of the total area of each floor level of the project (measured from the exterior side of every exterior wall) and dividing that by the number of beds being developed or redeveloped as part of the project. Ensure to include the following as part of the gross floor area calculation:

• Shafts, stairs and elevators
• Basements, except for parking
• Rooftop interior amenity spaces
• Shared service areas between the long-term care home and co-located spaces (such as shared staff rooms between co-located long-term care and retirement home)
• Enclosed mechanical penthouse spaces
• Any renovations of existing long-term care infrastructure which will be needed for meeting increased resident capacity demands

Excluded in gross floor area calculation

• All outdoor spaces, such as courtyards, balconies, terraces, decks, spaces under canopies and sunrooms
• All parking for vehicles and bicycles
• Open air rooftop HVAC units
• Exterior loading bays and docks
• Crawlspaces
• Any co-located spaces (such as retirement home, pharmacy, etc.)
• Any existing long-term care infrastructure that will not be redeveloped as part of this project
• Any renovations of existing long-term care infrastructure which will not be needed for meeting increased resident capacity demands

Note: Although long-term care parking is eligible for CFP funding, it is not included in the calculation of the gross floor area per bed for this purpose.

Appendix D: Guidance for hospitals

A hospital operator is:

• A separate long-term care entity recognized by the ministry with its own governing board and, while having a connection to a corporation that operates a public hospital, is funded and makes decisions independently from that hospital.
• A corporation that operates a public hospital under the Public Hospitals Act, 1990 and is the licensee of a long-term care home.

For clarity, an long-term care operator leasing land from a public hospital corporation is not a hospital operator.

All elements of this policy are applicable for hospital operators (as defined above), with the exception of funding percentages and timing.

Hospital operators may be subject to additional financial and organizational oversight and due diligence during the allocation review process and may be eligible for CFP funding valued at up to 85% of total eligible project expenditures during the construction period if located in a higher-cost market segment (for example, GTHA, North-Remote, North-Urban). Payment will be made on a payment schedule that is customized to each individual project as approved by the ministry and set out in the development agreement.