DC ACT 1. Proposed Changes:…

DC ACT

1. Proposed Changes: Mandatory and Retroactive Phase-in of DC Rates for any DC By-law Passed on or After June 1, 2022
Potential City Impacts:
- This would have an immediate detrimental financial impact to the City. Focusing solely on this proposal alone, the revenue loss to the City would be over $56 million over a four-year period.
- The lost DC revenue would impact the City in various ways; if the capital project were to go forward in the time frame as planned, there would be property tax increase implications. Should property tax rate increases not be viable, the timing of the delivery of service could be delayed. As a worst case scenario, the lack of DC funding could make a project completely unviable and the City may experience declines in its service levels.
- This proposal impacts the City unfairly, given that the City’s DC by-law was passed only 21 days after the retroactive date the Province has chosen. It is noted that municipalities that passed their DC by-law one day before the June 1, 2022 date are not impacted by this proposal. As such, the date seems fairly arbitrary.
Comments to the Province:
- Generally speaking, City staff are supportive of proposals contained in Bill 23 that would affect meaningful change to the overall affordability and supply of housing. City staff are of the view that the retroactive and mandatory phase-in does not achieve the Province’s stated goal.
- City staff are unclear why the blanket reduction also applies to the non-residential sector. It is unclear how this would help support affordable housing.
- Request to the Province:
- Remove the application of the mandatory retroactive phase-in of DC rates to the non-residential DCs.
- Continue to allow municipalities to set their own policies on phasing-in rate increases and not include any mandatory discounts in the DCA.
- Alternative Suggestions:
- Any mandatory phase-in provisions included in the DCA should only apply to DC by-laws passed after Royal Asset of the Bill.
- A mandatory phase-in only applies if the proposed DC rate increase is greater than 20%.
The phase-in period be reduced from 4 years to 2 years.

2. Proposed Changes: Changes to Eligible DC Costs (e.g. removal of land, studies, housing)
Potential City Impacts:
- The potential revenue loss stemming from removing land as an eligible cost would be approximately $34 million on an annual basis.
- Without land, or the funding to purchase land, the project itself would become unviable or unfunded.
- This is an area of significant concern for City staff.
- The potential revenue loss stemming from removing studies as an eligible capital cost would be $800,000 on an annual basis.
- The Region is the Housing Service Manager and therefore would be impacted if Housing was removed from the list of eligible DC services. The Region’s 2020 DC study projected $200M over the next ten years for critical affordable housing initiatives such as the housing master plan. The change to the DC Act puts projects in Mississauga such as East Avenue, Brightwater, and others at risk.
Comments to the Province:
- Land plays an integral part in the delivery of City services to its residents – whether it be the land for a library, community centre or arena, fire station, transit facility or land for the road network.
- Again, City staff are concerned that the removal of land as an eligible capital cost is punitive and serves only to reduce the City’s revenues.
- Request to the Province:
- Not remove or limit eligibility of “costs to acquire land” for DC collection.
- Studies play an integral part on how the City plans for future infrastructure and service delivery to its future residents. Restore studies as an eligible capital cost
- Restore Housing as eligible DC service

3. Proposed Changes: Discounts for Purpose Built Rental Units
Potential City Impacts:
- The potential revenue loss stemming from this change alone would be roughly $850,000 on an annual basis.
- This proposed discount would be in addition to the statutory deferral of the DCs over a six-year period, stemming from the change to the DC Act that came into effect on January 1, 2020.
Comments to the Province:
- Staff are supportive of these changes as it could provide an incentive to build purpose built rental units, particularly larger units.
- It is suggested the province consider using grants such as the Housing Accelerator Fund to offset lost revenue.

4. Proposed Changes: Change to the Historic Service Level Calculation
Potential City Impacts:
- This particular proposal, again, seems arbitrary and affects each municipality differently
- The preliminary high level sensitivity analysis performed by City staff shows an overall neutral effect on the DC rates, with the exception of Fire Services where the City has utilized non-DC funding sources to increase its service levels and this proposal would see a decrease to the Fire DC rates.
Comments to the Province:
- This particular proposal, again, seems arbitrary and affects each municipality differently
- The preliminary high level sensitivity analysis performed by City staff shows an overall neutral effect on the DC rates, with the exception of Fire Services where the City has utilized non-DC funding sources to increase its service levels and this proposal would see a decrease to the Fire DC rates.

5. Proposed Changes: Cap on the Interest Charged by Municipalities
Potential City Impacts:
- The City and Region currently have a Council approved policy which levies an interest rate of 5.5%.
- Subsequently, Council approved a policy that set the interest rate at 0% for rental housing developments.
- By prescribing the maximum interest rate to the prime lending rate would more closely align with borrowing rates should the City need to debt finance growth-related capital projects.
Comments to the Province:
- City staff have a neutral position towards this particular change in the legislation.

6. Proposed Changes: Requirement to Spend or Allocate 60% of DC reserve funds
Potential City Impacts:
- The City has plans to utilize the Roads DC reserve fund balance through the City’s long-term financial planning and annual budgeting exercises.
- Depending on how stringent the Province is on their definition of “allocate”, this requirement may make it difficult to plan for larger capital projects, and the ability to change the capital forecast annually.
Comments to the Province:
- City staff have an overall neutral position towards this particular change in the legislation.

7. Proposed Changes: Expiration of DC By-law in 10 years
Potential City Impacts:
- This proposal seems fairly arbitrary and seemingly has the desired effect to stagnate the DC rates for a period of ten years.
Comments to the Province:
- Given that it is not a mandated ten year shelf life of the DC by-law, City staff have an overall neutral position towards this particular change in the legislation.

8. Proposed Changes: Exemptions from DCs for > 1 unit or 1% of existing units in an existing purpose-built rental building, and residential intensification (additional dwelling unit and ancillary units)
Potential City Impacts:
- The potential financial impacts would be nominal, given the changes made to the Regulations in 2020 which exempt additional dwelling units that are within or ancillary to a primary unit.
Comments to the Province:
- City staff are general supportive of financial relief to units supporting gentle densification.

9. Proposed Changes: Exemptions from DCs for Non-profit Housing
Potential City Impacts:
- Many municipalities provide a grant-in-lieu of fees and charges to true non-profit housing providers.
- The potential financial impact would be nominal
Comments to the Province:
- Staff support fee exemptions (DCs, CBC, Parkland Dedication) for non-profit housing developments.

10. Proposed Changes: Full Exemptions from DCs, CBCs and Parkland Dedication (for affordable units, attainable units and inclusionary zoning units)
Potential City Impacts:
- The City has already passed a by-law with respect to DC grants for Affordable Rental Housing, but it differs from the proposal in a few ways:
- The grant would only be available to non-profit rental housing units
- Only the City’s portion of DCs would be eligible for a grant
- The value of the grant would be determined based on the proposed rents relative to AMR where rents up to 100% AMR would be eligible for up to a 100% grant and rents up to 125% AMR would be eligible for up to a 50% grant
- The proposed changes are likely to support the creation of more housing units and increase supply, but is unlikely to have a true impact on creating (and preserving) affordable housing units.
Comments to the Province:
- More information is requested to understand how “average resale price” and “average market rent” be set. Will the Province be setting these rates on an annual basis? Will this be done on a municipality-by-municipality basis and by unit type?
- Additional details regarding the information that will be included in the MMAH bulletin supporting determination of eligibility for exemptions is required to understand implementation and impacts.
- Further clarification is required for the definition(s) of “attainable housing units” and/or “development designated through regulation” to understand the magnitude and scope of DC fee exemptions.
- Staff support the requirement to enter into an agreement registered on title, to secure the exemptions. However, it’s preferable to see an arrangement where the DCs are paid in full by the developer, then refunded to the purchaser, much like existing programs for first-time homebuyer tax rebates – this would help ensure that the cost savings are in fact passed on to the homebuyer.

PLANNING ACT

1. Proposed Changes: Changes to Parkland Dedication Requirements
Potential City Impacts:
- The proposed reductions in the amount of parkland/ CIL that can be required of new development significantly impacts the City’s ability to achieve parkland goals set out in the Parks Plan. Parkland requirements included in the recently approved Parkland Conveyance By-law accounted for the amount of parkland needed to 2041 to support new growth and ensure the provision of complete communities.
- The proposed new legislation would have the effect of reducing CIL revenues by approximately 70% - 80% thereby significantly impacting the City’s ability to provide the amount of parkland needed in Mississauga neighbourhoods. The result would be less new parkland where it is needed and increased pressure on the existing parkland supply.
Comments to the Province:
- The proposed changes could result in lower standards for parkland provision and less access to parkland. The proposed caps in Bill 23 would undermine the principle that growth pays for growth. Funding shortfalls will be transferred onto the tax base reducing overall affordability in the city.
- The City is requesting that the Province restore the former rates, or that it remove the funding cap.

2. Proposed Changes: Parkland Dedication Exceptions for Additional Units and Non-profit Housing
Potential City Impacts:
- The recently approved Parkland Conveyance By-law includes an exemption for up to two additional residential units (ARUs).
- The recently approved Parkland Conveyance By-law includes an exemption for any development or redevelopment undertaken by the Region of Peel, which could include some non-profit housing. The proposed new legislation proposes exemptions for affordable housing, IZ units, non-profit housing and attainable housing, which is beyond the by-law exemptions. The impact to the City is a decreased ability to provide parkland, as part of a complete community, to support these types of developments.
Comments to the Province:
- Staff support fee exemptions (DCs, CBC, Parkland Dedication) for additional residential units as it encourages additional density in existing residential neighbourhoods to make better use of existing infrastructure and services.

3. Proposed Changes: Requirement for a Parks Plan
Potential City Impacts:
- The 2022 Parks Plan was approved by Council earlier this year. It is unclear if the proposed new legislation will require a new Parks Plan every time a Parkland Conveyance By-law is passed or an update to the existing Parks Plan.
Comments to the Province:
- Seek clarification on the need for a new Parks Plan.

4. Proposed Changes: Landowners can Select Portion of Lands for Parkland
Potential City Impacts:
- This proposed change that allows developers to identify the lands they intend to convey could result in dedication of small sections of undevelopable lands or parcels that are unsuitable for functional parkland.
- The proposed change that requires full parkland credit for encumbered parkland (strata and POPS for example), will result in less unencumbered parkland in growth areas. Encumbered parkland does not provide the same level of park service as a publicly owned and operated park. POPS have limited park programming ability, are subject to maintenance and operational restrictions and will not support mature trees. The financial burden for maintenance and capital investments for POPS would be that of the private landowner. Credits for POPS are financially beneficial to the developer but could cause financial hardship for the future private landowner/s, particularly in the case of residential buildings that would be responsible for maintaining these spaces.
Comments to the Province:
- Request that Province roll back ability for landowners to determine park locations, or at least ensure dedications are contiguous, link into the existing parkland network and have public street frontage and visibility.
- Request that Province remove 100% credit for encumbered lands or POPS, or at least roll it back to some lesser amount to disincentivize developers providing encumbered parkland or POPS over a public park.

5. Proposed Changes: Requirement for Minimum Spending of Parkland Monies
Potential City Impacts:
- The City already allocates CIL funds through the CIL Continuity 10 Year Plan forecast.
Comments to the Province:
- Seeking more information from the Province regarding the meaning of “allocation” to determine if there are any impacts.