Bill 23 to cost City of Peterborough millions in development charges revenue: staff report

A staff report says the City of Peterborough will lose millions in development charges revenue due to Bill 23. Richard Buchan/The Canadian Press

A staff report estimates the City of Peterborough will lose up to $12 million over the next five years due to Ontario’s Bill 23 legislation.

Approved in late November 2022, the Ford government’s legislation aims to construct 1.5 million homes in Ontario, mainly in the Greater Toronto Area, over the next decade. Key components of the legislation include opening 7,400 acres of protected Greenbelt land, along with shifting responsibilities of conservation authorities to municipalities and cuts to development charges to promote construction.

Read more: Kingston city council unanimously votes to oppose Bill 23

Development fees are imposed by municipalities on new builds to help pay for new infrastructure.

In a staff report going to Peterborough city council on Monday, a number of staff members say Bill 23 will have “financial implications” for the city and “consequently the taxpayers.”

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The report evaluated three elements of Bill 23 and estimate the city will lose $7 million to $12 million in development charges over a five-year period.

Those funds will have to be “covered by taxpayers in the form of tax increases,” states the report submitted by Jasbir Raina, commissioner of infrastructure and planning services.

More than $9 million of additional lost development charges revenues are also at stake if the cost of land required to support growth-related infrastructure is no longer eligible for development charges, the report notes.

“The enactment of Bill 23 will shift a significant portion of the financial burden for growth from developers to existing taxpayers,” the report states.

“The longstanding premise of growth paying for growth is no longer applicable under Bill 23.”

The report follows a seven-page letter submitted by Mayor Jeff Leal in November expressing the city’s concerns with Bill 23.

“The city is not confident that the proposed amendments will constitute quicker time frames or result in the creation of more affordable housing,” stated Leal in his letter to Steve Clark, Ontario’s Minister of Municipal Affairs and Housing.

“Nothing in the amendments places any obligation on the development community to pass on any cost savings to homebuyers. If enacted, Bill 23 will shift the financial burden for growth from those who profit growth onto existing taxpayers.”

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Staff note that on Dec. 31, 2021 the city had a balance of $26.6 million in development charges reserve funds. However, it says there are $43.2 million of future commitments approved by council against the reserves. The city says the 2022 year-end entries have not been completed.

“To ensure the funds are not entirely depleted, the city is heavily reliant on issuing debt against these reserves to finance approved projects. At the end of December 31, 2021, debt outstanding to be financed by future DCs collected amounted to $28.0 million. Clearly the DCRF are over committed and will be more strained due to the Bill 23 amendments.”

Staff say while increasing the supply of housing is important, the changes under Bill 23 will “compromise other important objectives.”

“The City of Peterborough remains committed to working with the province to find mutually agreeable solutions to improve development timelines and enhance the supply of housing in a manner that supports livable and sustainable communities.”

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City council will receive the report during the general committee meeting on Jan. 23.

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