Grey Highlands council is anticipating that the Ford government’s Bill 23 will cause big headaches and financial pressures for the municipality.
At its meeting on Jan. 18, Grey Highlands council held a public meeting to consider comments and feedback about its new draft development charges bylaw. While the focus of the meeting was development charges, a good portion of the proceedings were taken up by discussions about the impacts Bill 23 will have on development charges and the municipality’s revenue loss as a result of the changes in the legislation.
Grey Highlands engaged Hemson Consulting to prepare a new development charges bylaw for the municipality. The current Grey Highlands bylaw expires in February. Full details about what the bylaw proposes for development charges can be found here.
“(Bill 23) will certainly change how you go about imposing development charges in Grey Highlands,” said Hemson consultant Stefan Krezeczunowicz. “It has targeted reductions in development charges as a way of stimulating growth.”
The Ford government passed Bill 23 in November in an effort to address the housing affordability issue in Ontario. The legislation creates a number of exemptions and discounts to development charges for rental, affordable and attainable housing. It also changes how municipalities can spend their development charges revenue.
It also requires municipalities to phase-in their development charges over a period of five years. In year one of a new development charges bylaw, a municipality can collect 80 per cent of its maximum charge, that discount drops by five per cent a year until the full charge can be levied in year six. In addition, development charges bylaws can now be in place for 10 years before an update is required. Municipalities do have the authority to update their bylaws at any time should the need arise.
Bill 23 also requires that municipalities administer various agreements with the development community to govern the development charges exemptions mandated by the legislation.
Precise details about the financial impacts on municipalities of Bill 23 are not available, as the government has not yet released the regulations and definitions for the legislation. However, municipalities - with few sources of revenue - are not anticipating good news as they face lower revenue and increased costs.
Krezeczunowicz told council that under Bill 23 the municipality faced “potentially significant revenue loss.”
Municipalities collect development charges from new construction in their communities under the theory that “growth should pay for growth.” The charges are justified by an extensive background report that outlines anticipated future growth and infrastructure needs and expenses that will be required in the future to service that growth.
“The municipality is going to be burdened with all these extra administrative costs. That will affect our staffing costs,” said Coun. Tom Allwood. “The principle of growth paying for growth seems to have been thrown to the curb here.”
Mayor Paul McQueen agreed.
“We’re getting squeezed,” he said, noting that, on one hand, the government is limiting development charges revenue, while, at the same time, it has changed the planning act to force municipalities to process development applications sooner. “It’s very prescribed. Our hands are tied to a certain degree. We are a creation of the province.”
Allwood asked Krezeczunowicz if the province has proposed any mitigation measures to help municipalities make up the lost development charges revenue.
“It’s unrealistic for small and rural municipalities to make up that deficit on the backs of existing (ratepayers),” said Allwood.
Krezeczunowicz said he had not seen any plan from the province and said, barring provincial intervention, the reality for municipalities is clear.
“The funding required to make up the difference is going to have to come from the property tax or the ratepayers through their water and wastewater rates,” he said.
Members of the public that spoke about the bylaw expressed similar concerns as members of council.
“Frankly, you’re getting kneecapped,” said local resident Peter French. “The tools you need are being removed from your tool kit.”
Markdale resident David Trudell said shifting some growth-related costs from development to taxpayers is fundamentally unfair.
“There is going to be a cost to providing future infrastructure,” said Trudell. “The people buying water now are going to subsidize development. How can that be fair?”
Grey Highlands council will consider a final draft version of the development charges bylaw at a special meeting on Feb. 6.
CAO Karen Govan said Grey Highlands requested a delegation meeting at the upcoming Rural Ontario Municipalities Association conference with Minister of Municipal Affairs and Housing Steve Clark. Their request was denied.
“We are very concerned about the ramifications this will have on Grey Highlands,” Govan noted.
