Dear Mr. John Ballantine, …

Dear Mr. John Ballantine,

This letter contains comments from the Town of Innisfil on the proposed new regulation pertaining to the community benefits authority under the Planning Act.

Last year the Town updated it's Development Charges By-Law through a comprehensive background study and consultation process led by Hemson Consulting. Hemson has reviewed the changes contemplated by the Province and has identified several concerns related to municipal infrastructure funding that are shared by the Town.

Of particular concern to the Town is Hemson's overall conclusion that the Bill 108 legislation "will generally reduce the ability of municipalities to fund and deliver growth-related capital works by reducing cashflow, increasing pressure on debt levels and delaying the timing of infrastructure needed to service land and allow housing to be constructed."

Furthermore, the Town of Innisfil is similarly concerned that "the replacement of DCs with a 'community benefits charge' to fund 'soft' services, including libraries, park amenities, recreation facilities, and other local infrastructure that is critical to building vibrant and complete communities, would also make municipal financial planning more difficult."

Specific concerns shared by the Town of Innisfil and Hemson include:

- Since it is proposed that the amount of community benefits charge collected by a municipality will depend on the value of development sites, rather than the number of homes built or non-residential, this will be much less predictable and municipal long range financial planning efforts will suffer.

- Since a community benefits charge is proposed to be based on a prescribed percentage, unless this can vary to account for differences in land values across the Province, there will be inherent inequities in municipal revenue raising ability.

- Unless the new charges produce revenue similar to DCs for soft services and existing Planning Act contributions, the ability for the Town to raise revenue for growth-related infrastructure will be adversely affected.

- Given that revenue from community benefits charges depends on land values, which are uncertain and beyond municipal control, the risk associated with issuing debt to finance large facilities would increase under the proposed scheme.

- Since the community benefits charge is effectively replacing soft service DC's, density bonusing contributions and parkland dedication, unless the new charges are 'revenue neutral' in that the Town will not receive less revenue, then all of these services will need to 'compete' with each other for funds. This will negatively impact the Town's Official Plan place making goals to create vibrant communities.

- The changes to DC collection would potentially be a significant financial loss, as the DC's paid will no longer reflect the actual cost of services required for development.

- The changes to DC collection and administration proposed in Bill 108 is likely to result in a more costly and inefficient process with more red tape that will result in an overall negative impact on municipalities and developers alike.

Overall, the Town has concerns that though the proposed changes to the current system of municipal finance are very significant, they will do little to address the Government's concern about the predictability of development costs. They are also unlikely to create more housing supply or make homes more affordable. There is a greater likelihood that the changes will impair the ability of municipalities to raise funds for growth-related capital costs and make long range financial planning more challenging.

The Town therefore suggests that since a major intent of the Bill 108 changes has been to provide greater predictability in development costs, particularly as they relate to Section 37 density bonusing agreements under the Planning Act, that the Province should instead provide clear guidelines for the implementation of density bonusing agreements. These density bonusing agreements for the provision of community changes, and not changes to the collection of DC's for soft services, are better suited for a land value formula contemplated through the Bill 108 changes.

As such, the formula that the Province identifies should only be used to identify the value for community benefits identified through a Section 37 agreement under the Planning Act and the existing framework for the collection of DC's and parkland dedication should remain unchanged. A link to the Town of Innisfil's Density Bonusing Implementation Guidelines, which identify that community benefits should be provided in a value that equals 25% of the increase in land value from development, is attached as reference.

Thank you for the opportunity to provide comments.

Best regards,

Paul Pentikainen
Senior Policy Planner
Town of Innisfil