Hamilton Ont., councillors say residents could soon be picking up a $54-million tab now that developers are no longer saddled with charges nixed by Ontario’s legislation to speed up the building of homes.
City staff suggested in an outline the province’s development charge exemptions would impact taxpayers via property tax and water rate hikes, equating to increases of 2.8 per cent and 8.7 per cent respectively for 2024.
Councillors want the increase to be articulated to taxpayers in great detail on their bills.
“I believe there’s municipalities across Ontario that are also doing the same thing to articulate exactly how much the provincial government is costing municipal taxpayers directly on both their levy property taxes and also their rate bills,” Ward 8 Coun. John-Paul Danko explained during Wednesday’s council meeting.
In late October, Ontario’s housing minister, Steve Clark, revealed the Ford government’s plan to eliminate and reduce development charges even though some municipalities warned of a significant increase in local taxes to compensate for shortfalls.
The Ford government’s Bill 23: More Homes Built Faster Act, which passed in late November, curtails the fees municipalities can charge developers for the cost of building city infrastructure, like roads, sewers and parks, to support new communities.
A promise to make municipalities “whole” with a dollar-for-dollar replacement on the loss of those charges has seen little to no movement.
Mike Zegarac, general manager of finance and corporate services, said correspondence with the housing ministry hasn’t revealed any provincial program or “mechanism” whereby municipalities could recoup “the associated forgone revenues.”
Other than by hiking taxes, Stoney Creek Coun. Brad Clark notes that the Ford government has not yet provided an alternative way for municipalities to make up the funding gap.
“It’s very frustrating because they told us, they told our residents that you’re going to be made whole,” Clark said.
“We have no choice but to do what we’re doing here, which means our residents, our taxpayers are going to be paying much more as a result of this stealthful downloading.”
Municipal Affairs and Housing Minister Steve Clark has expressed some skepticism about the impacts, saying the municipalities hold billions in development charge reserves.
In late November he announced a third-party audit of “select” municipalities “to get a factual understanding of their finances.”
“Together, we can use this process to get the facts, make improvements, and better serve taxpayers by exploring alternative tools for growth to appropriately pay for growth rather than continuing to raise development fees on new homebuyers,” Clark wrote to the Association of Municipalities of Ontario.
City Manager Janette Smith told councillors the province has begun audits in Toronto, Peel Region, and Markham and that her understanding is financial impacts of development charges will be assessed in the examinations.
– with files from the Canadian Press