Development Charges

• When a developer applies to build housing or commercial spaces in Guelph, they pay development charges to the City. These development charges cover the costs of new infrastructure and services needed to support new homes and businesses.
• For instance, when you move into a newly built home, you probably assume you’ll be able to turn on your tap and get water to drink. You’ll rely on your toilet to flush and expect to have access to roads so you can travel to school, work, shopping or appointments. Additionally, when you call 911, you’ll rely on paramedics, police or firefighters to be there when you need them.
• The City of Guelph provides these services and more through the building of infrastructure that connects to newly built homes and businesses.
• Some of this infrastructure you may never see—like watermains, wastewater mains and stormwater mains. Other infrastructure and amenities you will see—like roads and sidewalks, paramedic stations, recreation centres, parks and libraries.
• As Guelph grows, development charges contribute to the costs of this new infrastructure, lessening the impact on current taxpayers and ratepayers. To see a full list of services supported by development charges, visit guelph.ca/dc.

• Every year, the City raises development charges to align with inflation. This adjustment helps cover regular increases in the costs of capital projects—such as new pipes, brick-and-mortar or asphalt—as well as wages for the people building infrastructure for the City.
• The Development Charges Act also requires municipalities to update their Development Charges Bylaw a minimum of once every 10 years. A Development Charges Background Study is required to support bylaw updates.

As of November 2024, Guelph’s development charges rates were at the lower end of municipalities in southern Ontario.

Recently, some people have asked about using property taxes and utility rates to cover the costs of new infrastructure needed to support growth.

• Development charges account for 27 per cent of the funding for the City’s 10-year capital budget—about $645 million.
• If the City removed development charges, this amount would need to be replaced by another source. The only sources of funding under the City’s direct control that could replace development charges are property tax and utility rate increases. These higher property taxes and utility rates would impact all residents, including low-income families and seniors.
• Additionally, it is unlikely to result in making housing more affordable. Banks and mortgage lenders do not just look at the cost of a home when considering whether someone qualifies for a mortgage; they also consider the property taxes and utility costs for the area. If the City raises property taxes and utility rates to pay for growth, it means housing may be less affordable, rather than improving from this change.
• It is also unlikely that lower development charges would reduce the final cost of the home. Previous studies in Ottawa and the GTA showed that areas with lower or no development charges did not have lower housing prices (Source: AMO. 2022).
• Housing is priced based on what home buyers are willing to pay (market price), so there is no assurance that lower building costs would result in lower prices in the short to medium term.

• To date, the City of Guelph’s policy has been that growth should pay for growth to the maximum extent possible under Ontario’s Development Charges Act, 1997.
• We are committed to providing both current and future residents and businesses with access to essential services and amenities—water, wastewater and roads, as well as parks, community centres and libraries—that ensure a high quality of life. Our policy has likewise been that extending these services to new homes and businesses should not come at the expense of current tax- and ratepayers, which include low-income residents and seniors.
• Sustainable growth over the long term will require predictable, reliable funding partnerships with all levels of government.