Guelph, Ont., July 21, 2023 – On Wednesday, July 19, Guelph City Council participated in a two-part meeting about development charges. The first part of the meeting was a workshop that served as an orientation and education session. The second part was a special council meeting where the preliminary results of the ongoing Development Charges Background Study were presented to gather early feedback from Council.
“Development charges are critical to funding the capital costs to accommodate growth,” says Shanna O’Dwyer, manager, Financial Strategy and Long-Term Planning, City of Guelph. “Before development can begin, water pipes, sewers, and roads must be built. Once people start living in new developments, we need to provide emergency services, waste collection, new parks and recreation spaces.”
For decades in Ontario, governments have operated under the principle that growth in population should pay for growth in infrastructure, but in reality, this has not been the case. With the changes to development charges in 2022 as part of Bill 23, the Province’s More Homes, Built Faster Act, municipalities like Guelph are left with a significant gap in revenues. The City’s 2024-2027 Multi-year Budget will need to consider gaps in funding resulting from exemptions, discounts, and phase-in requirements from Bill 23.
To maximize the City’s ability to support the cost of growth under current development charge legislation, residential development charges would need to increase by 44 per cent to $68,902 for a single/semi-detached unit. Non-residential development charge rates would need to increase by 68 per cent to $27.25 per square foot to maximize the City’s ability to support the growth-related costs of these developments.
These numbers represent the full rate increases available under the legislation, but rates would be subject to new provincial phase-in requirements which provide a 20 per cent discount in the first year of adopted increases. This discount is phased out over five years. The draft rates are competitive with development charge rates in nearby cities.
“Despite the proposed increases to development charge rates, the total amount of revenue collected from these charges is estimated to be $227 million less than it would have been before Bill 23 introduced the new mandatory phase-in, discounts, and exemptions,” says Tara Baker, general manager of Finance and City Treasurer. “More tax dollars and fee-based revenues from the water, wastewater, and stormwater utilities will be needed to fund the gap and will directly impact the City’s ability to support growth.”
The background study, which began in fall 2022, will continue through 2023 with the final proposed development charge rates expected to be released in October. The City’s current Development Charges Bylaw and rates will expire on March 2, 2024. The provincial Development Charges Act requires the City to complete a background study at least every ten years to forecast future residential and non-residential growth and determine related infrastructure needs and costs. Information from the study is used to calculate updated development charge rates. The City’s last background study took place in 2018 and the Development Charges Bylaw was updated in 2021 to align with provincially legislated changes.
To learn more about development charges and the background study visit the Development Charges page linked from guelph.ca/finance.
How Bill 23 More Homes Built Faster Act impacts development charges
The most recent set of changes to the Development Charges Act are the result of the Bill 23 More Homes Built Faster Act, 2022.
Impacts of Bill 23 include:
- Removal of housing services as a development charge eligible service
- Removal of certain studies as an eligible cost
- Removal of land as an eligible cost for some services (not currently in effect as provincial regulations have not yet been released)
- Extension of the maximum bylaw expiration date from five to 10 years
- Creation of mandatory phase-in of development charge rates over five years with a rate discount starting a 20 per cent, decreasing by five per cent each remaining year
- Exemptions for affordable and attainable housing, non-profit housing, and inclusionary zoning residential units (affordable and attainable housing exemptions are not currently in effect as provincial regulations have not yet been released)
- Percentage-based rate discounts for rental housing development based on the number of bedrooms
Join the City for educational engagement opportunities
Want to learn more about development charges in the City of Guelph and the proposed development charge rate charges?
Have your say
Watch a recording of the special council presentation, review the background study, and ask questions or submit feedback at haveyoursay.guelph.ca until August 13, 2023.
A statutory public meeting is expected to be held in October where people and businesses in Guelph can provide feedback on the proposed development charge rates through delegations.
Draft 2023 Development Charges Background Study
Government of Ontario: Bill 23 More Homes, Built Faster Act
Guelph’s Growth Management Strategy
Clair-Maltby Secondary Plan
Understanding provincial legislation
Housing in Guelph: an interactive storymap
Housing in Guelph: Special Council presentation
Shanna O’Dwyer, Manager, Financial Strategy and Long-Term Planning
City of Guelph
519-822-1260 extension 2300