Proposed new regulation pertaining to the community benefits authority under the Planning Act

ERO number
019-0183
Notice type
Regulation
Act
Planning Act, R.S.O. 1990
Posted by
Ministry of Municipal Affairs and Housing
Notice stage
Decision
Decision posted
Comment period
June 21, 2019 - August 21, 2019 (61 days) Closed
Last updated

This consultation was open from:
June 21, 2019
to August 21, 2019

Decision summary

A new regulation under the Planning Act would support the implementation of the new community benefits charge authority and parkland dedication to ensure that municipalities have the tools necessary to fund services that growing communities need while making the costs of building housing more predictable and increasing housing supply.

Decision details

Decision Details

This notice is linked to 3 other notices.

Decision on regulation

The new regulation under the Planning Act was filed on September 18, 2020 and came into force on September 18, 2020.

In support of the Housing Supply Action Plan, the More Homes, More Choice Act, 2019 (Bill 108) introduced legislative amendments to the Planning Act including the introduction of the community benefits charge authority. Bill 108 received royal assent on June 6, 2019.

To further support the objectives of the Housing Supply Action Plan and respond to stakeholder feedback, the COVID-19 Economic Recovery Act, 2020 (Bill 197) made further legislative changes to the Planning Act. Bill 197 received royal assent on July 21, 2020.

The new regulation is a Minister’s regulation under the Planning Act that prescribes additional details for the community benefits charge authority and parkland dedication.

The following decisions were made with respect to the proposals in ERO notice 019-0183 and are reflected in the details of the regulation.

Reporting on Community Benefits/Parkland

In order to ensure that community benefit charges (CBCs) and parkland dedication funds are collected and spent in a transparent manner, and for greater accountability, municipalities would be required annually to prepare reports for the preceding year that would provide information about the amounts in the community benefits charge special account and parkland dedication special account, such as:

  • Opening and closing balances of the special account
  • Transactions relating to the special account
  • A description of the capital acquired during the year with funds from the special accounts
  • Details on amounts spent during the year
  • For each asset acquired with funds from the special account, an account of how the asset was funded or will be funded if funds outside of the special account are used

Exemptions from Community Benefits

To help reduce the costs to build certain types of development that are in high demand/high need, the regulation provides that the following types of developments will be exempt from community benefits charges under the Planning Act

  • Long-term care homes
  • Retirement homes
  • Universities and colleges
  • Memorial homes, clubhouses or athletic grounds of the Royal Canadian Legion
  • Hospices
  • Non-profit housing

Community Benefits Prescribed Percentage

The community benefits charge authority established through the More Homes, More Choice Act, 2019, includes a mechanism to determine the maximum community benefits charge payable for any particular development. The community benefits charge payable cannot exceed the amount determined by applying a prescribed percentage to the value of the land under development.

The percentage of land value that would determine the maximum CBC would be 4%. This percentage was determined based on extensive feedback received throughout more than 300 days of consultation.

Appraisals for Community Benefits

The amendments to the Planning Act in Schedule 17 of the COVID-19 Economic Recovery Act, 2020 provide for the owner of land proposing to develop a site, to provide the municipality with an appraisal of the site if they are of the view that the community benefits charge exceeds what is legislatively permitted. Similarly, a municipality can also provide the owner of land with an appraisal if it is of the view that the owner of the land’s appraisal is inaccurate. If both appraisals differ by more than 5 percent, a third appraisal is prepared. The regulation establishes the following timeframes for these appraisals:

  • If the owner of land is of the view that the amount of a community benefits charge exceeds the amount legislatively permitted and pays the charge under protest, the owner has 30 days to provide the municipality with an appraisal of the value of land.
  • If the municipality disputes the value of the land in the appraisal provided by the owner, the municipality has 45 days to provide the owner with an appraisal of the value of the land.
  • If the municipality’s appraisal differs by more than 5 percent from appraisal provided by the owner of the land, the owner can select an appraiser from the municipal list of appraisers, that appraiser’s appraisal must be provided within 60 days.

Excluded Services For Community Benefits

Feedback from the notice in respect of this proposal and the second ERO notice (#019-1406) indicated that the development charges regime is one which is well established with rigorous rules; therefore, through Bill 197 much of the development charges regime has been left intact and the types of services funded under DCs has been expanded from what was established through Bill 108. In addition, the existing parkland provisions in the Planning Act have been maintained through Bill 197. These changes will provide municipalities clarity and revenues required to respond to the increased need for services resulting from new development.

CBCs will work with development charges and parkland dedication to ensure that municipalities will have the tools they need to build complete communities. CBCs could be charged to recover the capital costs of any service needed due to development. As specified in changes to the Planning Act made by Bill 197, eligible DC services or parkland could be recovered through CBCs provided that the capital costs that would be funded by the CBC are not the same costs funded by DCs or parkland contributions.

Community Planning Permit System

The community planning permit system is a framework that combines and replaces the individual zoning, site plan and minor variance processes in an identified area with a single application and approval process. O. Reg. 173/16 “Community Planning Permits” outlines the various components that make up the system, including the matters that must be included in the official plan to establish the system, the process that applies to establishing the implementing by-law and the matters that must or may be included in the by-law.

As the community planning permit system also allows conditions requiring the provision of specified community facilities or services, a community benefits charge by-law would not be available for use in areas within a municipality where a community planning permit system is in effect.

Other Details

Other details set out in the Minister’s regulation include:

  • The content requirements for a community benefits charge strategy;
  • The notice requirements for the passage of a CBC by-law; and
  • The interest rate for CBC refunds upon successful appeals at the Local Planning Appeal Tribunal (LPAT)

These details were proposed in ERO notice 019-1406.

Comments received

Through the registry

61

By email

13

By mail

0
View comments submitted through the registry

Effects of consultation

The following is a summary of feedback from extensive consultations that was taken into account in determining the final outcomes.

  • There was general support for the government’s objective to address Ontario’s housing challenges by increasing housing supply. However, there were different perspectives on the best way to address this crisis.
  • Proposals around reporting generally did not receive much concern; however, in some cases requests for more simplified reporting were encouraged and concerns around the administrative cost of additional reporting were made.
  • Regarding exemptions, some comments were made that municipalities should be allowed to determine exemptions and that definitions should be provided for each type of development, which are in line with current definitions.
  • Concern was raised that ambiguity in definitions of exemptions would make it difficult for municipalities to create and defend by-laws.
  • With respect to the prescribed percentage associated with community benefits charges, comments were made to ensure cost-recovery for municipalities and some concern was raised that revenue would be difficult to predict as land values can fluctuate.
  • Clarity around timelines regarding appraisals was sought such as who will bear the cost of the appraisal, how will land be appraised and how appraisals will work between upper-tier and lower-tier municipalities.

Supporting materials

Connect with us

Contact

Sign up for notifications

We will send you email notifications with any updates related to this consultation. You can change your notification preferences anytime by visiting settings in your profile page.

Follow this notice

Original proposal

ERO number
019-0183
Notice type
Regulation
Act
Planning Act, R.S.O. 1990
Posted by
Ministry of Municipal Affairs and Housing
Proposal posted

Comment period

June 21, 2019 - August 21, 2019 (61 days)

Proposal details

The More Homes, More Choice Act, 2019 received Royal Assent on June 6, 2019. Schedule 12 of the Act would, upon proclamation, make amendments to the Planning Act to provide the authority for municipalities to charge for community benefits in order to fund a range of capital infrastructure for community services that would benefit new development.

There are provisions in Schedule 12 that require additional details to be prescribed by regulation. The following are matters that the province is proposing to prescribe in regulation.

Regulatory changes

1. Transition

The amendments to the Planning Act in Schedule 12 of the More Homes, More Choice Act, 2019 provide transitional provisions for section 37, and section 42 under the Planning Act, and development charges for discounted services (soft services) under the Development Charges Act to provide the flexibility necessary for municipalities to migrate to the community benefits charge authority.

An amendment to the Development Charges Act, 1997 provides for a date to be prescribed in regulation that would effectively establish a deadline as to when municipalities must transition to the community benefits authority if they wish to collect for the capital costs of community benefits from new development. Beyond the date prescribed in regulation:

  • Municipalities would generally no longer be able to collect development charges for discounted services
  • Municipalities would generally no longer be able to pass by-laws to collect funds under section 37 of the Planning Act
Proposed content

It is proposed that the specified date for municipalities to transition to community benefits is January 1, 2021.

2. Reporting on community benefits

The amendments to the Planning Act in Schedule 12 of the More Homes, More Choice Act, 2019 provide for municipalities that pass a community benefits by-law to provide the reports and information that may be prescribed in the regulation to persons prescribed in regulation.

Proposed content

In order to ensure that community benefit charges are collected and spent on community benefits in a transparent manner, and for greater accountability, the Minister is proposing to prescribe reporting requirements that are similar to existing reporting requirements for development charges and parkland under section 42 of the Planning Act.

Municipalities would be required annually to prepare a report for the preceding year that would provide information about the amounts in the community benefits charge special account, such as:

  • Opening and closing balances of the special account
  • A description of the services funded through the special account
  • Details on amounts allocated during the year
  • The amount of any money borrowed from the special account, and the purpose for which it was borrowed
  • The amount of interest accrued on money borrowed

3. Reporting on parkland

The amendments to the Planning Act in Schedule 12 of the More Homes, More Choice Act, 2019 provide that municipalities may continue using the current basic parkland provisions of the Planning Act if they are not collecting community benefits charges. Municipalities with parkland special accounts will be required to provide the reports and information that may be prescribed in the regulation to persons prescribed in regulation.

Proposed content

In order to ensure that cash-in-lieu of parkland is collected and used in a transparent manner, the Minister is proposing to prescribe reporting requirements for parkland.

Municipalities would be required annually to prepare a report for the preceding year that would provide information about the amounts in the special account, such as:

  • Opening and closing balances of the special account
  • A description of land and machinery acquired with funds from the special account
  • Details on amounts allocated during the year
  • The amount of any money borrowed from the special account, and the purpose for which it was borrowed
  • The amount of interest accrued on money borrowed

4. Exemptions from community benefits

To help reduce the costs to build certain types of development that are in high demand, amendments to the Planning Act in Schedule 12 of the More Homes, More Choice Act, 2019 provides for the Minister to prescribe such types of development or redevelopment in respect of which a community benefits charge cannot be imposed.

Proposed content

The Minister is proposing that the following types of developments be exempt from charges for community benefits under the Planning Act:

  • Long-term care homes
  • Retirement homes
  • Universities and colleges
  • Memorial homes, clubhouses or athletic grounds of the Royal Canadian Legion
  • Hospices
  • Non-profit housing

5. Community benefits formula

The amendments to the Planning Act in Schedule 12 of the More Homes, More Choice Act, 2019, provide the authority for municipalities to charge for community benefits at their discretion, to fund a range of capital infrastructure for community services needed because of new development.

This capital infrastructure for community services could include libraries, parkland, daycare facilities, and recreation facilities.

For any particular development, the community benefits charge payable could not exceed the amount determined by a formula involving the application of a prescribed percentage to the value of the development land. The value of land that is used is the value on the day before the building permit is issued to account for the necessary zoning to accommodate the development.

Proposed content

It is proposed that a range of percentages will be prescribed to take into account varying values of land.

In determining the prescribed percentages, there are two goals.

  • Firstly, to ensure that municipal revenues historically collected from development charges for “soft services”, parkland dedication including the alternative rate, and density bonusing are maintained.
  • Secondly, to make costs of development more predictable.

This Ministry is not providing prescribed percentages at this time. However, the Ministry would welcome feedback related to the determination of these percentages. There will be further consultation on the proposed formula in late summer.

6. Appraisals for community benefits

The authority to charge for community benefits under the Planning Act would enable municipalities, at their discretion, to fund a range of capital infrastructure for community services needed because of new development.

For any particular development, the community benefits charge payable could not exceed an amount determined by a formula involving the application of a prescribed percentage to the value of the development land on the day before the building permit is issued.

The amendments to the Planning Act in Schedule 12 of the More Homes, More Choice Act, 2019 provide for the owner of land proposing to develop a site, to provide the municipality with an appraisal of the site they are of the view that the community benefits charge exceeds what is legislatively permitted. Similarly, a municipality can also provide the owner of land with an appraisal if it is of the view that the owner of the land’s appraisal is inaccurate. If both appraisals differ by more than 5 percent, a third appraisal is prepared.

Proposed content

The Minister is proposing the following:

  • If the owner of land is of the view that the amount of a community benefits charge exceeds the amount legislatively permitted and pays the charge under protest, the owner has 30 days to provide the municipality with an appraisal of the value of land.
  • If the municipality disputes the value of the land in the appraisal provided by the owner, the municipality has 45 days to provide the owner with an appraisal of the value of the land.
  • If the municipality’s appraisal differs by more than 5 percent from appraisal provided by the owner of the land, the owner can select an appraiser from the municipal list of appraisers, that appraiser’s appraisal must be provided within 60 days.

7. Excluded services for community benefits

Amendments to the Planning Act in Schedule 12 of the More Homes, More Choice Act, 2019 provide that community benefits charges cannot be imposed for facilities, services or matters associated with services eligible for collection under the Development Charges Act, 1997. It also provides for the province to prescribe facilities, services or matters in respect of which community benefit charges cannot be imposed.

Proposed content

The Minister is proposing to prescribe that the following facilities, services or matters be excluded from community benefits:

  • Cultural or entertainment facilities
  • Tourism facilities
  • Hospitals
  • Landfill sites and services
  • Facilities for the thermal treatment of waste
  • Headquarters for the general administration of municipalities and local boards

This would be consistent with the ineligible services list currently found under the Development Charges Act.

8. Community planning permit system

The community planning permit system is a framework that combines and replaces the individual zoning, site plan and minor variance processes in an identified area with a single application and approval process. O. Reg. 173/16 “Community Planning Permits” outlines the various components that make up the system, including the matters that must be included in the official plan to establish the system, the process that applies to establishing the implementing by-law and the matters that must or may be included in the by-law.

Proposed content

Amendments to the Planning Act in the More Homes, More Choice Act, 2019 establish a new authority for municipalities to levy charges for community benefits to make requirements in this regard more predictable. As the community planning permit system also allows conditions requiring the provision of specified community facilities or services, it is proposed that a community benefits charge by-law would not be available for use in areas within a municipality where a community planning permit system is in effect.

In considering making a proposed new regulation and changes to existing regulations under the Planning Act, the government will continue to safeguard Ontarians’ health and safety, support a vibrant agricultural sector, and protect environmentally and culturally sensitive areas, including the Greenbelt.

Supporting materials

View materials in person

Some supporting materials may not be available online. If this is the case, you can request to view the materials in person.

Get in touch with the office listed below to find out if materials are available.

Municipal Finance Policy Branch
Address

Municipal Affairs and Housing
13th Floor, 777 Bay St.
Toronto , ON
M5G 2E5
Canada

Office phone number

Comment

Commenting is now closed.

This consultation was open from June 21, 2019
to August 21, 2019

Connect with us

Contact

John Ballantine, Manager

Phone number
Office
Municipal Finance Policy Branch
Address

Municipal Affairs and Housing
13th Floor, 777 Bay St.
Toronto , ON
M5G 2E5
Canada

Office phone number