The Ontario government’s Bill 23 cost the Municipality of Grey Highlands nearly $250,000 in lost development charges revenue.
At its meeting on July 3, Grey Highlands council received a staff report that detailed the final tally of the government’s ill-fated Bill 23, which tried to spur more housing construction in the province.
A staff report outlined that the municipality lost $200,000 in general development charges revenue as a result of Bill 23’s requirement that municipality’s phase-in new development charges. In addition, the legislation removed the ability of municipalities to collect development charges for administrative studies, which cost Grey Highlands a further $46,000.
“That was the kind of impact Bill 23 was having on small municipalities,” said Coun. Tom Allwood, who noted that the lost revenue is “not recoupable."
"When Bill 23 came in, it meant the shortfalls were going to have to be funded by the (tax) levy,” he said.
Bill 23 was an effort by the province to spur more housing construction by placing restrictions on how municipalities collected development charges. Municipalities levy development charges on new building activity in their communities under the premise of “growth pays for growth.”
Bill 23, which was implemented in the fall of 2023, forced municipalities to phase-in new charges over five years (from 80 per cent to 100 per cent) and removed administrative studies from the list of items that are eligible for development charges collection. The province later walked back the changes via Bill 185, which received royal assent in June 2024.
Grey Highlands found itself in the unfortunate position of approving its new development charges bylaw in February 2023 just after Bill 23 was implemented. The municipality spent the rest of that year and the first part of 2024 collecting reduced development charges under the Bill 23 rules.
A report from Treasurer/Director of Finance Anna McCarthy showed that Grey Highlands collected $854,112 in development charges in 2023, down significantly from the $1,142,095 collected in 2022. Some of the revenue loss was due to slower growth in 2023, while a significant portion was caused by the impacts of Bill 23.
“The reality is, because of Bill 23, we’re now down $250,000,” said CAO Karen Govan. “That moves directly to the (tax levy). That has to be funded by the levy. Any discount we give for development charges is just a shift. It’s a shift from development and growth to the (tax) levy.”
With Bill 185 now in place, Grey Highlands is now charging its full development charges. Council also directed staff to bring forward an amendment to its development charges bylaw to once again include administrative studies as eligible development charges items.
