RE: Bill 185 (Cutting Red…

RE: Bill 185 (Cutting Red Tape to Build More Homes Act, 2024) – Schedule 6. changes to the Development Charges Act, 1997 - ERO #019-8371

Thank you for the opportunity to provide comment on some of the provisions contained in Bill 185. This letter and the enclosed Council report (CA-11-24/FN-14-24 Re: April 10 Provincial Announcements) is the Regional Municipality of Halton’s ( the Region) submission to ERO #019-8371 posted on the Environmental Registry of Ontario, being the proposed changes to the Development Charges Act, 1997 (DCA).

The Region has a shared objective with the Province and its Local Municipalities to advance housing supply and support the Local Municipalities in meeting their housing pledges by proactively planning for, financing and delivering infrastructure. Regional Council has committed to support the planned growth, while protecting its taxpayers from the financial impact of growth.

On April 17, 2024, Regional Council endorsed Report No. CA-11-24/FN-14-24. A summary of the section of the report related to the changes to the DCA and the Region’s submission to ERO #019-8371 are outlined below.

Bill 185, Schedule 6 – Regional Municipality of Halton Submission (ERO #019-8371)

A number of the changes in Schedule 6 of Bill 185 build off the DCA changes initially introduced through Bill 23 More Homes Built Faster, 2022, and in some cases repeal the legislation that was introduced through Bill 23.

Reinstating studies as an eligible capital cost for DCs

Under Bill 23 the Province eliminated the ability to apply costs to undertake studies such as growth studies and background studies as a Development Charge (DC) capital expense that is chargeable. The Region is fully supportive of reinstating studies as an eligible capital cost as outlined in Bill 185.
However, Bill 23 also eliminated social housing as an eligible DC service. These DCs supported the delivery of assisted housing for the Region’s most vulnerable populations. Bill 185 does not reinstate housing services as an eligible service. The Region continues to request that social housing be reinstated as an eligible service.

Repealing the mandatory 5 year phase-in of DC rates

Bill 23 introduced a mandatory 5 year phase-in of DC rates imposed in by-laws, retroactive to June 1, 2022 which impacted the Regional DC by-law 25-22.

• Year 1 (80%), Year 2 (85%), Year 3 (90%), Year 4 (95%), Year 5 (100%).

The Region fully supports repealing the 5 year phase-in of the DC rates and appreciates that the Province has listened to municipal input in this regard.

It is important to highlight however that the recently announced Canada Housing Infrastructure Fund indicates that the Province can only access that fund if they commit to key actions, including a 3-year freeze on DCs from April 2, 2024, in municipalities greater than 300,000, which includes Halton Region.

The Region is not supportive of this position. Municipalities have limited funding tools available and rely on DC’s to fund growth related infrastructure. A reduction in DC’s could impact the delivery of housing which is a top priority for municipalities.

Should the Province agree to these conditions, municipalities would require that the April 2, 2024 DC rate freeze would be at 100% of the rate initially calculated by the municipal DC by-law (and not at the phase-in rate at that time).

Streamlined process for extending DC By-laws

Under Bill 23 the DCA was amended to allow DC by-laws to be updated at least every 10 years rather than every 5 years. This timing was to reflect the phase-in provision discussed above which would reduce the DC rates for the first 5 years.

Bill 185 provides a streamlined approach for undertaking minor amendments to DC by-laws that had incorporated items that are being considered for reinstatement. This amendment does not impact Region’s DC by-laws. The Region is supportive of this amendment.

Reduce the time limit on the DC rate freeze

Bill 108, More Homes, More Choices Act, 2019, included the requirement to freeze the DCs imposed on developments when a site plan application (or zoning application if no site plan application) was submitted. The DC rates for these developments are frozen at the application date (subject to interest). Once the application is approved the frozen DC is applicable for 2 years.

Bill 185 proposes to reduce the 2 year timeframe to 18 months to incentivize developments to proceed. The Region is supportive of this amendment.

Additional comments regarding the June 1, 2024 proclamation date for section 4.1

Further, although not part of the ERO 019-8371, the pending proclamation date of section 4.1 of the DCA continues to be of concern as municipalities have not been consulted on the bulletin and should be given an opportunity to provide comments prior to it being posted.

Halton does not believe that discounting or reducing DCs is an appropriate incentive to encourage affordable housing ownership/rental particularly in a high growth municipality. These restrictions on DC collections could result in higher property taxes and/or the delay of key infrastructure thereby potentially impacting existing property owners’ affordability and delivery of new housing required to achieve the housing targets.

As outlined in it’s October 27, 2023 submission regarding ERO-019-7669, the Region continues to request that subsection 4.1 be removed from the DCA and that the Province provide financial assistance to promote affordability through grant/incentive/rebate programs that be administered by the municipalities. A grant program also provides flexibility to alter terms and conditions if objectives are not being met, financial capacity is too burdensome or resident’s economic circumstances change.

Should the Province proceeds with the June 1, 2024 proclamation date, it is requested that consideration be given to:

1. Precluding the impact to water and wastewater DC’s, which are strictly tied to capacity and infrastructure delivery and therefore should not be included in the exemption.

2. Providing exemptions only to Affordable Rental units and not Home Ownership units, which is consistent with the Federal Government GST rental rebate.

3. A guarantee on a yearly repayment from the Province to municipalities for the full shortfall in DCs the new legislation would generate.

The DCA is an important tool for Halton to recover growth-related costs in order to provide infrastructure in a timely way to support growth and more importantly support the Provincial Growth Plan.

If you have any questions or concerns regarding our submission or the DCA, the Region would be pleased to meet to review and discuss.