Durham Region cities concerned about Canada-Ontario development charges program

All five of Durham Region’s urban Lake Ontario towns have said yes – though not without some concerns – to the Canada-Ontario Development Charges reduction program, an $8.8 billion application-based initiative available to more than 200 municipalities that levy development charges.

Funded jointly by the federal and provincial governments, the program is intended to support municipal housing-enabling infrastructure by reducing development charges to expedite new housing construction.

The downside is opting in requires communities to reduce residential development charges – one-time fees paid by developers to help fund roads, parks, recreation facilities and other growth-related infrastructure needed to support new communities – by 30 per cent for three years.

Whitby Mayor Elizabeth Roy said while there is “no single solution” to the housing crisis, increasing housing supply “must be part of the answer.”

“By reducing development charges on residential projects, this program is intended to encourage new housing construction, support a wider range of housing options, and help accelerate the delivery of homes that families need,” she said. “At the same time, it’s important to recognize that development charges play a critical role in funding the infrastructure required to support growth.”

While the federal and provincial governments have committed to covering a portion of the revenue municipalities will forgo through this program, local governments will still be required to absorb a share of these costs, Roy noted.

“At a time when municipalities across Ontario are facing unprecedented financial pressures and continued downloading of responsibilities from other levels of government, I remain concerned about the potential impact on property taxpayers who are already struggling with rising costs.”

Ajax is ready to go, with council supporting a staff recommendation last week to submit an application for $122 million in grant funding through the Development Charge Reduction Program (DCRP).

Mayor Shaun Collier acknowledged that the program is not without “risks,” and that residents will have plenty of questions as the long-term effects.

“An agreement of this magnitude will come with conditions and risks, including the potential reduction of development charges by up to 50 per cent and municipal contribution requirements. However, staff believe that, at this time, the overall financial impact on taxpayers will be low, as the town is already required to contribute toward these capital projects,” he said.

The town is looking to secure upfront funding for five “critical infrastructure projects” through the program, including Rossland Road, Harwood Avenue North and Hunt Street, at a time when development charge revenues have been impacted by slower-than-anticipated growth.

Council has directed staff to proceed with the application and negotiate an agreement that is “responsible and financially prudent” and in the best interests of taxpayers, he added.

“The objective is to help address funding gaps that could otherwise delay critical infrastructure needed to support new housing and serve existing residents.”

Oshawa Mayor Dan Carter called the initiative a “bold and cooperative approach” to tackle the housing supply and affordability crisis.

The announcement demonstrated a “shared commitment” by all three levels of government to support faster housing supply and affordability, he added.

“The City of Oshawa has and will continue to share this commitment to accelerate housing and infrastructure development to support housing affordability and economic growth.”

With growing communities in Kedron and Columbus planned to accommodate a population of 46,000, 1,600 residential units currently in the development pipeline downtown and at least 2,800 more units city-wide that could potentially be built within the next two years, Oshawa is also prepared to put forward a list of projects to support infrastructure growth and accelerate construction of housing throughout the municipality.

“Oshawa is ready to put shovels in the ground.”

Clarington councillors also approved a recommendation to apply to the program this month, with some concerns raised at a June 12 special council meeting about the benefits to taxpayers and the future ability to pay for services.

The municipality is hoping to secure the funding to offset a slowdown in local development caused in part by development charges.

Applications for Canada-Ontario Development Charge Reduction program funding were submitted by Pickering as well, with the grant application including housing-enabling infrastructure projects, such as Seaton Fire Station #3.

Whitby Council also approved an amendment calling on the mayor to write to Prime Minister Mark Carney and Premier Doug Ford requesting a “collaborative dialogue” between all three levels of government to refine the Canada-Ontario Partnership to Build framework.

“We all share the same goal: building more homes and improving affordability. However, we must ensure that municipalities can support housing growth without shifting additional costs onto existing residents through higher property taxes.”

Municipalities had until June 19 to submit projects for funding consideration. Final transfer payment agreements between individual municipalities and the province will lock in a 3-year development charges reduction and secure federal/provincial funding to offset a portion of the lost revenue.

The province committed to also making Canada-Ontario Partnership to Build funding available for rural, small and northern municipalities.