‘Financially reckless’: Community projects at risk from housing bill, mayor says backstop funding from province needed

It should be up to the province to “backstop” a looming $342 million hole in Brampton’s budget due to changes in Ontario’s latest housing bill, Mayor Patrick Brown and members of Brampton City Council say.

Ontario’s Bill 17 received royal assent earlier this month, ushering in changes to rules under the Development Charges Act and Planning Act.

But council heard on Wednesday how the changes are expected to bring “significant near-term revenue shortfalls” to Brampton, putting the completion of some $567 million in community projects at risk.

The deferral of development charges could put a $342 million hole in Brampton’s current and future budgets – money that Brown says the province should have to cover.

“If it comes from provincial funding, it is a different conversation,” Brown said in Brampton City Council chambers on Wednesday. “But it’s financially reckless if there’s not a revenue source to replace the critical servicing that’s necessary.”

Some of the at-risk projects include the Embelton Community Centre, the widening of Goreway Drive, the Victoria Park Arena redevelopment and many others.

Development charges are one-time fees paid by developers to help finance the capital costs of new development projects, including infrastructure like roads, water, and sewers, community centres and more.

Bill 17 changes when developers are required to make the payment, deferring it from the application process to when occupancy permits are issued.

That tweak means Brampton will now have a delay in receiving development charges for future projects, leading to “uncertainty and inability to plan in the future,” staff told council on Wednesday.

“We won’t have certainty of what projects will get approved, and we won’t be able to really plan ahead, because we don’t have the certainty of exactly what we are receiving, when, and how much,” staff said.

Coun. Michael Palleschi said he wants to see the province commit to “backstop” funding to make up any development charge deficits.

The city could also use property tax revenue “to bridge funding gaps,” which could “increase tax burdens on existing residents,” according to a report.

The development charge changes will also put “financial pressure” on the Region of Peel, which is forecasting an estimated deficit “in the range of
$569 million by year-end 2027,” according to a report going to regional council on Thursday.

“This is not just about building housing and incentivizing housing, it’s also about building complete communities,” Coun. Rowena Santos said, adding that local MPPs need to be aware of “what is not going to be built in this city to support their residents if they don’t make us whole.”

A report on Bill 17’s expected impact shows Brampton could lose $84 million to $112 million in deferred development charges in the first year, and another $13 to $21 million annually.

“This reduced cash inflow will constrain the City’s ability to finance planned capital infrastructure investments — $567 million over 2025–2029, of which $342 million is expected to be funded from DCs,” the report reads.

The city also says the push to meet a massive housing target has “prioritized quantity over quality, leading to unintended negative City building outcomes.”

Brampton’s annual budget and capital funding plan banked on revenue from development charges, but the city now says that money “will not materialize for 2025, which necessitates a funding review of the existing capital program.”

Region of Peel council is expected to hear an update on the impacts of Bill 17 on Thursday.