Proposed regulatory matters pertaining to community benefits authority under the Planning Act, the Development Charges Act, and the Building Code Act

ERO number
019-1406
Notice type
Regulation
Act
Planning Act, R.S.O. 1990
Posted by
Ministry of Municipal Affairs and Housing
Notice stage
Decision Updated
Decision posted
Comment period
February 28, 2020 - April 20, 2020 (52 days) Closed
Last updated

Update Announcement

This notice was originally published on February 28, 2020 for a 31 day comment period ending March 30, 2020. The notice was republished on March 20, 2020 to extend the deadline to submit comments to April 20, 2020.

September 18, 2020

This consultation was open from:
February 28, 2020
to April 20, 2020

Decision summary

The new regulation under the Planning Act outlines details for the implementation of the community benefits charge authority and parkland dedication. This reg. is part of the framework that provides municipalities with the tools necessary to fund services that growing communities need while making the costs of building housing more predictable.

Decision details

This notice is linked to 3 other notices.

Decision on regulation

The new community benefits charges and parkland regulation under the Planning Act came into force on September 18, 2020.

Description of regulation

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.

Community benefits charges (CBCs) will work with development charges and parkland dedication to ensure that municipalities have the tools and resources they need to build complete communities. CBCs could be imposed 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 development charge 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.

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 in-force date of September 18, 2020 would start the two-year transition period for municipalities and the development sector to implement the new framework.

Key details set out in the new community benefits charges and parkland regulation under the Planning Act include:

  • The percentage of land value that would determine the maximum community benefits charge payable in any particular case;
  • The timelines for land value appraisals in cases where the CBC amount is disputed;
  • The types of development that would be exempt from community benefits charges;
  • The content requirements for a community benefits charge strategy;
  • The notice requirements for the passage of a CBC by-law and a parkland by-law;
  • The interest rate for CBC and parkland refunds upon successful appeals at the Local Planning Appeal Tribunal (LPAT).
  • The reporting requirements related to community benefits and parkland.

With regard to the proposals set out in the ERO 019-1406, the following decisions have been made:

Content requirements for a community benefits charge strategy

To provide greater clarity about the components of a community benefits charge strategy, a municipality would need to include the following content in their strategy:

  • The anticipated type, amount and location of development or redevelopment that would be subject to a community benefits charge
  • The anticipated increase in the need for a specific community service (for example, the acquisition of land for parks, affordable housing, child care, etc.) resulting from new development or redevelopment
  • The capital costs associated with the increased need for a specific community service resulting from new development or redevelopment
  • The excess capacity that exists in those specific services (for example, the extra capacity that exists in a service that is not currently being used)
  • Whether the increased provision of those specific services would also serve existing residents (for example, existing residents may also benefit from new child care facilities that are needed as a result of new development or redevelopment)
  • Any capital grants, subsidies, or contributions from other levels of government or other sources like donations that are anticipated to be made to support those specific services.

Services eligible to be funded through development charges

With regard to the proposal to prescribe five former soft services in regulation under subsection 2(4) of the Development Charges Act no amendments were made.

Feedback from this notice 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. The COVID-19 Economic Recovery Act, 2020, amended the Development Charges Act, to make the following services recoverable through development charges (in addition to the services that would have been recoverable based on the Bill 108 changes):

  1. Public libraries
  2. Long-term care
  3. Parks development
  4. Public health
  5. Recreation
  6. Child care
  7. Housing services (e.g., affordable housing and shelters)
  8. By-law enforcement services and municipally administered court services
  9. Emergency preparedness
  10. Airports, in the Region of Waterloo only.

Percentage of land value

The community benefits charge authority originally established through the More Homes, More Choice Act, 2019 and remade through the COVID-19 Economic Recovery Act, 2020, 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.

In any particular case, the community benefits charge levied by a local municipality could not exceed the amount determined by applying the applicable proposed percentage to the value of the land that is subject to development. The COVID-19 Economic Recovery Act, 2020 amended the Planning Act to provide that only local municipalities can levy community benefits charges.

Timeline to transition to the new community benefits charge regime

The regulation does not address transitional matters as these were addressed directly in legislation pursuant to amendments made in the COVID-19 Economic Recovery Act, 2020 based on feedback received on the government’s previous proposal. The transition to the new regime would be two years after the date the proposed community benefits charge authority comes into effect.

Notice requirements for the passage of a community benefits charges and parkland by-law

To implement the appeal mechanism that was originally added to the community benefits charge regime by the Plan to Build Ontario Together Act, 2019 and was paralleled for parkland by the COVID-19 Economic Recovery Act, 2020, upon passage of a community benefits charge by-law or parkland dedication by-law containing alternative parkland rates, a municipality would be required to comply with the following notice provisions. These provisions are similar to the notice provisions under the Development Charges Act regarding the passage of a development charges by-law:

  1. Notice would be required to be given through newspaper or to every land owner in the area covered by the by-law through personal service, fax, mail or email.
  2. Notice would also be required to be provided by personal service, fax, mail or email to those individuals who specifically request notice, the clerk of the lower or upper-tier municipality (if and as applicable), and the secretary of every school board having jurisdiction in the area covered by the by-law.
  3. In order to facilitate public awareness of the passage of a community benefits charge by-law or parkland dedication by-law containing alternative parkland rates, notice would include the following:
    1. A statement that the council of the municipality has passed a by-law.
    2. A statement setting out when the by-law was passed and the number of the by-law.
    3. A statement that any person or public body may appeal the by-law to the Local Planning Appeal Tribunal by filing with the clerk of the municipality a notice of appeal setting out the objection to the by-law and the reasons supporting the objection.
    4. A statement setting out the last day for appealing the by-law.
    5. An explanation of requirements imposed by the by-law.
    6. A description of the lands to which the by-law applies, a key map showing the lands to which the by-law applies, or an explanation why no description or key map is provided.
    7. An explanation of where and when persons may examine a copy of the by-law.

The date on which notice would be deemed to have been given would be:

  • the newspaper publishing date if the notice is published by a newspaper
  • the date the fax is sent, if the notice is faxed
  • the date the email is sent, if the notice is emailed
  • the date the notice is mailed, if the notice is sent by mail

Interest rate for CBC and parkland refunds upon successful appeal

If the LPAT amends or repeals a community benefits charge or parkland by-law on an appeal, the municipality must issue a refund for amounts collected prior to the resolution of the appeal.

The minimum interest rate prescribed in regulation is the Bank of Canada rate. This is consistent with the rate for refunds of development charges already in effect and is therefore familiar to both municipalities and builders.

Building Code

The Building Code was amended to add the community benefits charge authority to the list of items under Division A - Article 1.4.1.3 Definition of Applicable Law. This amendment establishes a mechanism for ensuring the payment of community benefits charges prior to the issuance of a building permit.

Comments received

Through the registry

184

By email

88

By mail

6
View comments submitted through the registry

Effects of consultation

Submissions were made by members of the public, municipalities and a range of interested stakeholders, including community groups, development industry, municipal and professional sectors as well as environment and resource-based sectors.

Stakeholders were supportive of the objectives of the Housing Supply Action Plan, specifically to increase housing supply and affordability and provide enhanced certainty and transparency.

Comments were generally supportive of the existing mechanisms to fund the costs of growth and provide parkland in Ontario communities. This included general support to move former ‘soft’ services back to the development charge regime as well as strong support to maintain the basic parkland provisions of the Planning Act with respect to residential and commercial and industrial development.

With regard to returning some former ‘soft’ services to the development charges regime, there was support that this proposal could enable growth to pay for growth. However, concerns were raised about certain types of services being added, such as civic improvements, which some felt could not directly be attributed to new development. Some feedback suggested that the list of eligible services be expanded to include services such as childcare and subsidized housing. The government has listened to this feedback and expanded the list to include these and other services through the COVID-19 Economic Recovery Act, 2020.

Concerns were raised about introducing the community benefits charge during the COVID-19 pandemic and the potential impact this would have on long-established mechanisms to fund the costs of growth and provide parkland in growing communities. A number of comments noted the importance of parkland, especially in light of the pandemic. Some comments noted that the tools to fund growth and provide parkland should be flexible to accommodate different types of development, such as residential greenfield development and high-density development in urban centres.

Concerns were raised that the proposed CBC percentages might have disproportionately increased costs for community benefits for lower density greenfield developments.

The government listened to the feedback and brought forward legislative amendments to the Planning Act through Bill 197 so that single and lower-tier municipalities can only apply the community benefits charges to developments with 10 or more residential units, and 5 or more storeys.

Based on the feedback related to parkland, the government maintained the existing parkland dedication rates set out in the Planning Act. The COVID-19 Economic Recovery Act, 2020 maintained the basic and alternative parkland dedication rates and provided authority for municipalities to apply the parkland dedication provisions and community benefits charges with respect to the same development.

The changes made to the community benefits charges, development charges and parkland dedication framework increase accountability and transparency and enable municipalities to use these three tools together to enable growth to pay for growth.

Stakeholders noted the potential administrative burden and implementation challenges associated with community benefits charges, and highlighted the need for a longer transition period. The government heard this feedback and introduced legislative changes to provide for a transition timeline of two years after the date that the community benefits charge authority is proclaimed.

Feedback on content for a community benefits charge strategy was mixed. Some submissions recommended that community benefits charges should be calculated based on the same prescribed methodology as applied to the calculation of development charges and that these charges should be detailed in a CBC strategy. Other feedback suggested that municipalities have greater flexibility to develop their strategy and the community benefits charges.

With regard to the proposal related to the provision of notice upon the passage of a CBC by-law notice, stakeholders were generally neutral or supportive. With regard to minimum interest for CBC refunds upon successful appeals, some stakeholders proposed alternative approaches, while other stakeholders were generally supportive. The comments on the proposed amendments to the Building Code were generally supportive and/or neutral.

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Original proposal

ERO number
019-1406
Notice type
Regulation
Act
Planning Act, R.S.O. 1990
Posted by
Ministry of Municipal Affairs and Housing
Proposal posted

Comment period

February 28, 2020 - April 20, 2020 (52 days)

Proposal details

Introduction

In May 2019, the Minister of Municipal Affairs and Housing released More Homes, More Choice: Ontario’s Housing Supply Action Plan. In support of the Action Plan, the Minister of Municipal Affairs and Housing introduced the More Homes, More Choice Act, 2019 (Bill 108) which received Royal Assent on June 6, 2019. Schedule 12 of the Act, once proclaimed, establishes a new authority under the Planning Act for municipalities to charge for community benefits with respect to land to be developed or redeveloped. Community benefits charges are intended to fund municipal infrastructure for community services, such as land for parks, affordable housing and child care facilities, that are needed to support new residents and businesses associated with new development.

On November 6, 2019, amendments to the community benefits charge provisions under the Planning Act were introduced through the Plan to Build Ontario Together Act, 2019. The Bill received Royal Assent on December 10, 2019. The amendments, set out under Schedule 31 of the Act, include new transition provisions for alternative parkland dedication and a mechanism to appeal a municipality’s community benefits charge by- law to the Local Planning Appeal Tribunal.

The community benefits charge authority has not been proclaimed and is not in effect at this time.

This is the second regulatory proposal that the government has posted for public feedback on the proposed components of a new community benefits charge authority. The initial regulatory proposal was posted on the Environmental Registry of Ontario on June 21, 2019 (“Proposed new regulation pertaining to the community benefits authority under the Planning Act”, ERO 019-0183).

This proposal outlines additional matters for public input to inform the further development of the community benefits charge authority and regulation under the Planning Act.

Proposal for public comment

This proposal outlines several matters related to the community benefits charge authority under the Planning Act.

The changes made by the More Homes, More Choice Act, 2019 will mean that municipalities will have two primary funding streams to pay for the increased need for services due to new development.

Development charges are a mechanism for municipalities to pay for the capital costs of infrastructure like roads and sewers associated with new development. The government is also seeking feedback in this proposal on changes to the types of services that could be funded through development charges. It is proposed that development charges could also pay for the capital costs of certain community services such as public libraries, parks development (other than acquiring land for parks) and recreational facilities (see Section #2).

The new community benefits charge would complement development charges by giving municipalities the flexibility to fund growth-related capital infrastructure costs of other community services. For example, funds generated through community benefits charges could be used to support community priorities such as acquiring land for parks, supporting affordable housing or building child care facilities which will be needed due to growth.

A municipality could choose to collect development charges to fund the development of new park facilities or enhance existing parks such as playgrounds and splash pads. To acquire the land needed to build new parks, a municipality would have the option of using one of the following tools under the Planning Act:

  1. A municipality could apply the basic parkland dedication rate in which a maximum of either 5% (for example, for a residential development) or 2% (for a commercial or industrial development) of a proposed development is dedicated as parkland or cash-in-lieu is provided (section 42 “Conveyance of land for park purposes” and section 51.1 “Parkland” under the Planning Act).
  2. Alternatively, a municipality could establish a community benefits charge by-law to collect funds to acquire land for parks as well as other community services such as affordable housing and child care. If both a developer and municipality agree, a developer could provide land for parks (rather than a payment). The agreed-upon value attributed to the in-kind parkland contribution would be applied toward the community benefits charge payable.

If a municipality has a community benefits charge by-law in place it cannot apply the basic parkland dedication provisions of the Planning Act.

To implement the new community benefits charge authority, the province is seeking feedback on the following regulatory matters under the Planning Act, the Development Charges Act and the Building Code Act:

  1. Required content of a community benefits charge strategy
  2. Services eligible to be funded through development charges
  3. Percentage of land value for determining a maximum community benefits charge
  4. Timeline to transition to the new community benefits charge regime
  5. Community benefits charge by-law notice
  6. Minimum interest rate for community benefits charge refunds where a by-law has been successfully appealed
  7. Building code applicable law

1. Required content of a community benefits charge strategy

Before passing a community benefits charge by-law, a municipality must prepare a community benefits charge strategy. The strategy must identify the items that a municipality intends to fund through community benefits charges. It must also comply with any requirements that may be prescribed in regulation regarding the mandatory content that a strategy should address. In preparing a community benefits charge strategy, a municipality must consult, but has the flexibility to determine their consultation approach.

Proposal

To provide greater clarity about the components of a community benefits charge strategy, it is proposed that a municipality would need to include the following content in their strategy:

  1. The anticipated type, amount and location of development or redevelopment that would be subject to a community benefits charge
  2. The anticipated increase in the need for a specific community service (for example, the acquisition of land for parks, affordable housing, child care, etc.) resulting from new development or redevelopment
  3. A parks plan that examines the need for parkland in the municipality
  4. The amount of parkland per person currently being provided in the municipality, and if this is planned to increase, decrease or stay the same
  5. The capital costs associated with the increased need for a specific community service resulting from new development or redevelopment
  6. The excess capacity that exists in those specific services (for example, the extra capacity that exists in a service that is not currently being used)
  7. Whether the increased provision of those specific services would also serve existing residents (for example, existing residents may also benefit from new child care facilities that are needed as a result of new development or redevelopment)
  8. Any capital grants, subsidies, or contributions from other levels of government or other sources like donations that are anticipated to be made to support those specific services

2. Services eligible to be funded through development charges

The Development Charges Act provides authority for municipalities to impose development charges to pay for the increased capital costs of specific services that are needed as a result of new growth.

The services that are eligible to be funded through development charges are listed under subsection 2(4) of the Development Charges Act. The list includes a provision for other services that may be prescribed in regulation. The Planning Act stipulates that services funded by development charges may not be funded by community benefits charges.

When proclaimed, the More Homes, More Choices Act, 2019 will make waste diversion and ambulance services fully recoverable through development charges.

The government is proposing to prescribe additional services to be funded under the Development Charges Act, through regulation.

Proposal

It is proposed that the following services would be identified in regulation under subsection 2(4) of the Development Charges Act:

  1. Public libraries, including library materials for circulation, reference or information purposes
  2. Long-term care
  3. Parks development, such as playgrounds, splash pads, equipment and other park amenities (but not the acquisition of land for parks)
  4. Public health
  5. Recreation, such as community recreation centres and arenas

Development charges may be imposed to fully recover the capital costs related to the provision of these proposed services due to new growth. These proposed services would be ineligible to be funded through community benefits charges.

3. Percentage of land value for determining a maximum community benefits charge

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 ministry is seeking feedback on the proposed prescribed percentages through this posting.

Proposal

The proposed percentages of land value that would be prescribed in regulation under the Planning Act would be structured as follows:

  • single-tier municipalities: 15%
  • lower-tier municipalities: 10%
  • upper-tier municipalities: 5%

In any particular case, the community benefits charge levied by a municipality could not exceed the amount determined by applying the applicable proposed percentage to the value of the land that is subject to development. The land value would be calculated as of the valuation date, which is the day before the date the building permit is issued in respect of the development or redevelopment.

The community benefits charges levied by municipalities would support the growth- related capital costs of acquiring land for parks, and other community benefits required because of development, such as child care facilities, affordable housing, social services, parking and by-law enforcement. There would need to be a connection between the community benefits charge levied and the increased need for community services associated with new development.

Different percentages are being proposed for single, upper and lower-tier municipalities to reflect the varying service delivery requirements of each tier of municipality to service new growth with community amenities. This percentage structure ensures that the combined percentage for upper and lower-tier municipalities would be equal to the percentage for single tier municipalities.

4. Timeline to transition to the new community benefits charge regime

The date by which municipalities must transition to the community benefits charge authority, if they wish to collect funds for community benefits, would be prescribed in regulation under the Development Charges Act, 1997.  The prescribed date would be the deadline for establishing a community benefits charge strategy and by-law in order to charge for the capital costs of services funded through community benefits charges. 

The community benefits charge by-law would set out the charge payable in any particular instance, any municipal exemptions, and other details.

Proposal

It is proposed that the specified date for municipalities to transition to the community benefits charges regime would be one year after the date the proposed community benefits charge regulation comes into effect.

This transition period would allow municipalities to prepare community benefits charge strategies and pass by-laws if they choose to implement a community benefits charge regime.

5. Community benefits charge by-law notice

The Plan to Build Ontario Together Act, 2019 amended the Planning Act to establish a mechanism by which a municipality’s community benefits charge by-law could be appealed to the Local Planning Appeal Tribunal. A municipality would be required to provide notice to the public when it passes a community benefits charge by-law. To implement the by-law appeal mechanism, requirements associated with how to provide public notice would be prescribed in regulation.

Proposal

To implement the appeal mechanism, it is proposed that upon passage of a community benefits charge by-law, a municipality would be required to comply with the following notice provisions. These provisions are similar to the notice provisions under the Development Charges Act regarding the passage of a development charges by-law:

  1. Notice would be required to be given through newspaper or to every land owner in the area covered by the by-law through personal service, fax, mail or email.
  2. Notice would also be required to be provided by personal service, fax, mail or email to those individuals who specifically request notice, the clerk of the lower or upper-tier municipality (if and as applicable), and the secretary of every school board having jurisdiction in the area covered by the by-law.
  3. In order to facilitate public awareness of the passage of a community benefits charge by-law, notice would include the following:
    • i. A statement that the council of the municipality has passed a community benefits charge by-law.
    • ii. A statement setting out when the by-law was passed.
    • iii. A statement that any person or public body may appeal the by-law to the Local Planning Appeal Tribunal by filing with the clerk of the municipality a notice of appeal setting out the objection to the by-law and the reasons supporting the objection.
    • iv. A statement setting out the last day for appealing the by-law.
    • v. An explanation of the charges imposed by the by-law.
    • vi. A description of the lands to which the by-law applies, a key map showing the lands to which the by-law applies, or an explanation why no description or key map is provided.
    • vii. An explanation of where and when persons may examine a copy of the by-law.

The date on which notice would be deemed to have been given would be:

  • the newspaper publishing date if the notice is published by a newspaper
  • the date the fax is sent, if the notice is faxed
  • the date the email is sent, if the notice is emailed
  • the date the notice is mailed, if the notice is sent by mail

6. Minimum interest rate for community benefits charge refunds where a by-law has been successfully appealed

The mechanism to appeal a community benefits charge by-law includes a requirement for municipalities to provide full or partial refunds in the event of a successful appeal. The interest rate paid on amounts refunded must not be less than the prescribed minimum interest rate.

Proposal

It is proposed that the minimum interest rate a municipality would be required to pay on amounts refunded after successful appeals would be the Bank of Canada rate on the date the by-law comes into force. Alternatively, if the municipality’s by-law so provides, the minimum interest rate would be the Bank of Canada rate updated on the first business day of every January, April, July and October.

This proposal aligns with the prescribed minimum interest rate for refunds of development charges after successful appeals under the Development Charges Act.

7. Building Code applicable law

The Building Code is a regulation under the Building Code Act, 1992. The Building Code sets out minimum administrative and technical requirements for the construction, renovation, demolition and change of use of buildings. It also establishes a list of applicable law that must be satisfied in order to receive a building permit. Municipalities enforce the Building Code and are responsible for issuing building permits for the construction, renovation, demolition or change of use of buildings.

Proposal

It is proposed that the Building Code be amended to add the community benefits charge authority to the list of items under Division A - Article 1.4.1.3 Definition of Applicable Law. This amendment would establish a mechanism for ensuring the payment of community benefits charges prior to the issuance of a building permit.

Public comment

Your feedback on the implementation of the community benefits charge authority will inform government decisions on the development of a new community benefits charge regulation under the Planning Act and amendments to regulations under the Development Charges Act and Building Code Act.

Submissions may be made online or provided via email to the contact below.

Supporting materials

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Important notice: Due to the ongoing COVID-19 pandemic, viewing supporting materials in person is not available at this time.

Please reach out to the Contact listed in this notice to see if alternate arrangements can be made.

Municipal Finance Policy Branch
Address

College Park 13th flr, 777 Bay St
Toronto, ON
M7A 2J3
Canada

Office phone number

Comment

Commenting is now closed.

This consultation was open from February 28, 2020
to April 20, 2020

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