On June 6, 2019, the Provincial Legislature passed Bill 108: the More Homes, More Choice Act, 2019, into law. This legislation impacts the development process by changing development charge rules, introducing a new Community Benefits Charge Framework, amending the Heritage Act and by changing the rules governing the local planning appeal process. Many concerns and proposed solutions expressed by municipalities and citizens when the bill was introduced were not reflected in the Act at the time of passing
Changes to Development Charges
Notably, legislative amendments to development charges in Bill 108 go against the principle that growth should pay for growth. In particular, Bill 108:
- Eliminates development charges for ‘soft or social services,’ leading to a potential funding shortfall for services like recreation centers, libraries, social housing, long term care, paramedic services and more; and
- Defers when development charges are payable to the City for a variety of development types, leaving the property tax base to cover the cost of key municipal infrastructure in the interim. Notably, interest on deferred development charge payments can be charged.
These changes may lead to an increase in property taxes for existing local residents and businesses. Development charges are key in financing these infrastructure investments and services as Guelph continues to grow. Changes also put at risk planned community infrastructure projects like the South End Recreation Centre.
Bill 138, the Plan to Build Ontario Together Act, 2019, which received Royal Assent on December 10, responds to some municipal concerns with Bill 108 by reversing changes to development charge payment schedules for industrial and commercial developments. It also activates interim rules for parkland funding until further regulations are developed.
Numerous Bill 108 changes on development charges came into effect on January 1, 2020. Development charges for soft services remain in effect until the new Community Benefits Charge framework is implemented.
Community Benefit Charges
Bill 108 also introduced a new ‘Community Benefits Charge Framework’ to partially finance soft service costs no longer eligible under new development charge rules. Necessary regulations on this framework have yet to be posted. This means that the new framework is not currently in force.
Regulations will be key in determining whether community benefit charges are an adequate tool to cover increases in soft and social service costs resulting from growth. To date, there is concern that this new tool will be insufficient, resulting in increased property taxes. It is important that the way community benefit charges are calculated to reflect the cost of service provision.
Bill 138 also amends community benefit charges as introduced by Bill 108 by making community benefit charge bylaws appealable to the Local Planning Appeal Tribunal (LPAT). This change creates administrative burden and further financial risk for municipal governments like the City of Guelph.
- City of Guelph’s Council Information Report (June 21, 2019)
- City of Guelph’s submission to Minister of Municipal Affairs and Housing on proposed changes to Bill 108 (May 31, 2019)
- City of Guelph’s submission to the Standing Committee on DC Act Reforms (May 31, 2019)
- Statement from LUMCO Mayors (May 24, 2019)