August 2018
Backgrounder
Development charges are a municipal revenue tool used to recover the costs of new municipal infrastructure needed to serve new neighbourhoods. But Ontario’s communities continue to struggle with financing the full cost of new development. Provincially-imposed limits to what can be included in development charges have reduced their effectiveness and transferred the costs of growth onto the existing property tax base.

Currently, development charges only cover about 80% of the costs of growth-related capital. These shortfalls mean that municipal governments must look to other revenue sources to manage the lack of funds and maintain service levels.

Changes made in 2015 expanded items that are eligible for full cost recovery, yet, municipalities remain concerned that some services that are vital to growth remain excluded from development charge calculations. This includes recreation facilities, libraries, childcare facilities, waste management and energy-from-waste.    

AMO supports changes to ensure growth pays for growth. This includes:
  • making landfills and energy-from-waste facilities eligible for cost recovery;
  • removing the ten percent reduction on all “soft” services;
  • applying forward looking service level calculations for all services; and,
  • reducing the list of services that are ineligible for cost recovery.
AMO will continue to press the case that development charges should be calculated in a way that will fully cover the costs of new development and growth.