Ontario cancels municipal audits launched to understand impacts of its housing laws

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‘Stop Whining’: Premier Doug Ford targets Mississauga mayor over Bill 23 spat
RELATED: A war of words has broken out between Mississauga Mayor Bonnie Crombie and Premier Doug Ford over Bill 23, which eliminates the development charges cities rely on to build critical infrastructure. Colin D’Mello reports – Dec 7, 2022

The Ford government is cancelling audits it ordered into the finances of some Ontario cities to find out if its housing policy changes would lead to local tax increases.

In an announcement on Wednesday, the government said it was “terminating” audits into the finances of several Toronto-area cities and will engage in new consultations to understand the impacts of legislation it introduced more than a year ago.

The announcement came alongside confirmation the Ford government would reverse its decision to dissolve the Region of Peel and revoke some minister’s zoning orders.

“Looking ahead, we’ll continue to work with our municipal partners to ensure that they have the tools and revenue streams needed to get shovels in the ground,” Housing Minister Paul Calandra said.

“As we do, we need the federal government to be a willing and able partner in supporting our province’s growth.”

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The audits were introduced in six cities after the province made changes to the fees homebuilders have to pay to cities in a 2022 law, Bill 23.

The changes under Bill 23 meant the amount builders would need to pay in development fees — designed to ensure new roads, libraries, sewage and other local services are paid for by developers — dropped for some buildings.

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The amount of parkland — or money to build new parks — also fell away.

Six cities were singled out for the audit: Toronto, Newmarket, Peel Region, Mississauga, Caledon and Brampton.

The changes to development charges were forcefully protested by cities across Ontario, with some suggesting they could face “staggering” losses as a result of the legislation.

At the heart of the criticism was a fear the proposed changes would lead to dramatic property tax increases or a gutting of public services.

“Without other funding sources to make up this shortfall, the financial burden will fall on the property tax base,” a Markham staff report previously said, estimating property taxes could increase between 50 and 80 per cent just to maintain existing services.

In response to the municipal outcry, then-housing minister Steve Clark said cities would be “made whole” for any losses they suffered as a result of the changes.

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The province ordered a series of audits of the finances of certain cities to investigate if development charges were being misused or hoarded, and determine if they would need to be made whole.

The consulting and auditing firm Ernest and Young was selected to probe the finances of the cities.

The first portion of the audits — looking into the impact changes to development changes would have — wrapped up in October and was submitted to Queen’s Park.

Cities were expecting to see a draft report of the findings, but have not yet had one shared. The second part of the audit was a more general value-for-money probe and has not been completed.

On Wednesday, Calandra said the audits would be terminated.

He said new consultations would be launched ahead of its next round of housing legislation, expected to be tabled in the new year.

The Canadian Taxpayers Alliance blasted the decision to scrap the audits, calling it a “huge mistake” by the Ford government.

“There is no good reason for the province to cancel these important city audits,” Ontario Director Jay Goldberg said.

“If cities are spending taxpayers’ money well, they should have nothing to hide. The fact that these audits are being scrapped should deeply concern every Ontario taxpayer.”

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A news release from the province said new legislation could include more changes to development charges.

“Development charge exemptions and reductions for non-profit, affordable and purpose-built rental homes will remain unchanged,” the release said.

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