The transition board that has been working on the dissolution will instead focus on finding efficiencies in the upper−tier government and improving regional services such as policing, paramedics and public health, the province said.

"While we originally thought that the best way to achieve our goals of better services and lower taxes was through dissolution, we’ve since heard loud and clear from municipal leaders and stakeholders that full dissolution would lead to significant tax hikes and disruption to critical services," Housing Minister Paul Calandra wrote in a statement.

"This is something our government will never support."

Calandra has reversed several big government moves since he took over the housing portfolio in September after his predecessor resigned amid the Greenbelt scandal.

The government passed the Hazel McCallion Act in the spring to dissolve Peel Region, which is made up of Mississauga, Brampton and Caledon.

The act fulfilled a promise Premier Doug Ford made to the former longtime mayor of Mississauga that it would stand as an independent city

Brampton Mayor Patrick Brown recently said the dissolution would cost more than $1 billion and leave his city with no choice but to raise taxes.

Mississauga mayor and new Ontario Liberal Party Leader Bonnie Crombie wants Peel to dissolve and has questioned the accuracy of Brown’s figures.

The new mandate for the transition board asks it to bring forward recommendations to remove the "duplicative layer of regional bureaucracy" to help build housing faster.

Ontario is also cancelling audits of six municipalities launched earlier this year to determine whether local governments are facing a revenue shortfall as a result of a provincial law that cuts some of the fees developers pay.

Municipalities use the money from those fees to fund housing−enabling infrastructure, and the Association of Municipalities of Ontario has said the provincial changes will leave those communities $5 billion short.

The former municipal affairs and housing minister had contended that municipalities were sitting on billions of dollars in reserve funds and launched those audits with a promise to make them "whole" if there was indeed a shortfall.

Calandra also said he is considering revoking or amending several Minister’s Zoning Orders, which override local bylaws, for lack of action or lack of water or wastewater servicing for sites.

As well, the government said that measures it introduced earlier to spur the creation of "attainable" homes will be amended to incentivize the development of modular homes.

This report by The Canadian Press was first published Dec. 13, 2023.

Allison Jones and Liam Casey, The Canadian Press