Re: ERO 019-0183 Purpose…

Re: ERO 019-0183

Purpose

This letter is in response to the request for comments on ERO 019-0183 regarding
proposed new regulation pertaining to the community benefits authority under the
Planning Act.

Background

Bill 108, More Homes, More Choice Act, 2019 (Bill 108) received Royal Assent on June
6, 2019. Bill 108 included changes to the Development Charges Act and the creation of
a new Community Benefits Authority with the intent of making housing more affordable
and development costs more predictable.

The Minister of Municipal Affairs and Housing indicated in a letter to municipalities dated
June 7, 2019 that the intent of the new legislation is to maintain municipal revenues.
On June 21, 2019 draft proposed regulatory guidelines were made available by the
province for the Development Charges Act, Planning Act and the new Community
Benefits Authority. Municipalities have been invited to provide feedback on these
proposed regulations by August 21, 2019.

Discussion

The Town of Whitby is one of the fastest growing municipalities in the province.
Whitby's population is expected to grow by 56% in the next 12 years.
Under the existing Development Charge legislation, growth does not fully pay for the
cost of growth. The current cost of growth for our residents is an increase in property
taxes of 1.5% each and every year. This has an impact on both affordability and quality
of life for our residents.

Any further growth related pressures will have an impact on Whitby, and our ability to
build a complete and vibrant community. Residents are struggling with the existing cost
of growth and will object to any increased tax burden shifted from development to the
taxpayer. As such, the Town is pleased by the province's commitment to maintain
municipal revenues and not shift any additional cost of growth to Whitby taxpayers.
The Town has participated in the analysis of the proposed regulations with the
Municipal Finance Officers' Association of Ontario (MFOA) and supports the submission
made by MFOA.

As noted in MFOA's submission "the proposal summaries, written in general terms, do
not provide adequate information to understand the full impact of changes introduced
under Bill 108". As such, complete draft regulations and adequate time to understand
and test a completely new unprecedented CBC regime is required to ensure revenue
neutrality is maintained for each municipality; given, it appears the amount to be
collected through the CBC will be calculated by applying a percentage to the value of
the developed land, up to a maximum/capped percentage.

"Soft services" does not mean unnecessary services. "Soft services" help define the
community and add to the quality of life in a local community. Parks, recreation, libraries
etc. are all part of a healthy and positive lifestyle that brings economic benefit and is one
of the main reasons people want to locate in Whitby.

As a result, it is a significant concern that there is no longer a connection between the
cost for infrastructure needs defined at the local level and a methodology to recover for
them. Additional costs for administration and technology related to the new regime, as
well as the acquisition of parkland and provision of other services previously provided
by development under local services needs within each municipality add to the
municipal burden.

It needs to be recognized that revenue neutrality and the ability to collect the funds
necessary may vary significantly between municipalities depending on a municipality's:
• current stage of development (slow grow, high growth)
• current market conditions and value for land,
• the type of development occurring (greenfield or infill),
• existing policies for dedication of park lands or services received in lieu,
• costs of administration of the complex CBC regime, and
• service level needs defined by local Councils.

When the proposal summaries were released on June 21, 2019, the Minister of
Municipal Affairs and Housing stated "Growth must pay for growth and it's important that
municipalities have the resources to support complete communities. By working with
municipalities, we will develop a formula that protects vital revenue streams". It is
hoped that this commitment to revenue neutrality means each municipality remains
whole while considering all the additional costs in addition to existing lost revenues.

If not, local choices will need to be made impacting the timing of service delivery. This
could include a further shift of cost from the developers to the taxpayers, deferral or
cancelation of needed infrastructure, or reduced levels of service, since shifting more
growth related costs to the taxpayer will be difficult.

Subject to clarity on the definitions included in the proposed changes and a review of
the complete draft regulations yet to be released; the Town of Whitby has provided the
following additional comments.

1. Transition - Details on the requirements for the Community Benefits Charge
Strategy needs to be known in order to determine if the prescribed date of January 1,
2021 is achievable. Given internal administrative constraints and limited external
expertise available, this timeframe could be unachievable in some municipalities.
Municipalities will also incur additional administrative costs to convert existing systems
and processes.

2. Reporting on Community Benefits and Parkland - The proposed regulation
indicates the reporting requirements would be similar to those already reported on
under the Development Charges Act and Planning Act, as such it is anticipated to have
a minimal administrative impact to the Town.

3. CBC and Revenue Neutrality - It is the intention of the Town of Whitby to
collect the Community Benefit's charge. As a rapidly growing municipality, the tax base
cannot bear the cost of growth alone; it has been Whitby's past practice to have growth
pay for growth to the greatest extent possible, recognizing that based on the current
legislation growth will never fully pay for growth. Municipalities should not be
disadvantaged under the new CBC regime.

4. Exemptions from Community Benefits - The proposed exemption list for most
types of institutional development (long- term care homes, hospices, universities,
colleges, Royal Canadian Legion) and non-profit housing is similar to the DC deferrals
being proposed in the DC Act. The Town of Whitby supports an exemption for nonprofit
housing and non-profit institutional development, but requests that any for profit
institutional development not be exempt. In addition, Whitby requests definition
clarification on the eligible types of development and seeks protection and the ability to
collect should there be a change of use of the development within a defined period after
occupancy.

5. Community Benefits Formula - It is the Town of Whitby's position that no two
developments are the same, and no two municipalities are the same. The value of land
is not the best determining factor when attempting to determine the community benefit's
charge. A flat charge is not equitable across various types of development within a
municipality or across multiple municipalities
In addition, some developments may not be fully developing the land; i.e. residential
flood plain, industrial (phased development) etc.

We welcome the inclusion of municipalities in the Provincial Technical Working
Committee that is seeking to determine the rate, and encourage the Province to
establish different rates based on type of development i.e. residential I non-residential,
greenfield I intensification in-fill, low I medium I high density, etc.
Every municipality within Ontario is unique and their populations and need for services
vary. As such the community benefits charge should not be a "one size fits all" model
based on land values without some methodology or connection to the cost of providing
the services.

The additional burden from administrative costs to manage the process, land
appraisals, the requirement to deduct the cost of all parkland and previously provided in
lieu local services from the CBC revenues, further shifts the cost of development from
the developer to the taxpayer. These additional costs should be considered eligible
under a CBC regime and when determining revenue neutrality.

The proposed regulations have not currently defined when the community benefits
charge would be payable or how the community benefits charge is allocated between
upper and lower tier municipalities in a two tier system.

6. Appraisals of Community Benefits - It is assumed in order to get the best and
most accurate land value at the time of determining the community benefits charge an
appraisal will need to be completed by the municipality. This will not only increase the
administrative burden and costs to the taxpayer, it will also increase the process "red
tape" time.

The Town of Whitby appreciates the proposed regulation that the owner is responsible
for all additional appraisal costs should they dispute the land value in the community
benefits charge, but recognizes that any disputes will increase the administrative burden
to the municipality.

It would be important for a municipality to develop and regularly update standard land
values to minimize disputes. A methodology accepted by the development community
would provide more certainty and avoid time consuming and costly disputes related to
appraisal values.

7. Exclusions from Community Benefits - Although the proposed ineligible
service list for the community benefits charge is identical to the current list under the DC
Act, the Town of Whitby is asking for consideration to change that list.

The Town of Whitby respectfully requests that general administration headquarters of
municipalities be removed from this list. As the municipality grows, the administrative
need of that municipality grows. Municipal buildings are being used more as community
hubs and it is the Town of Whitby's position that a municipal building is a community
benefit that should be paid for by some extent by development.

In addition, the Town of Whitby believes that cultural facilities play a vital benefit to a
community, and as such should be eligible to be funded in part by the community
benefits charge. Likewise, hospitals should be an eligible service to help offset the cost
to the taxpayer for a municipality's share of a hospital. Whitby recognizes that
restrictions should be set on when hospital money could be allocated; the Town of
Whitby is recommending that once a future hospital site has been approved by the
Province a municipality should be allowed to proceed.

8. Community Planning Permit System - The Town of Whitby currently does not
have a community planning permit system, but supports the idea that it has the authority
and choice to do so if deemed appropriate by Council, and should not be prescribed.

Thank you for the consideration.

Sincerely,
Matthew Gaskell, Chief Administrative Officer, Town of Whitby
Ken Nix, Commissioner of Corporate Services/Treasurer, Town of Whitby