Development Charges Reform and Community Benefit Charge
Bill 197, The COVID-19 Economic Recovery Act, 2020 received Royal Assent in July 2020. This omnibus bill made changes to the Development Charges Act, 1997 and Planning Act, 1990 by introducing a new “all in one” regime for Development Charges (DCs) and the Community Benefit Charge (CBCs). Amendments will further expand the list of eligible services funded and allows for blended use with CBCs. These services include:
- long-term Care
- park development (excluding parkland acquisition)
- public housing
- child care
- housing services (e.g. affordable housing & shelters)
- by-law enforcement and court services
- emergency preparedness
- airports (specific to Waterloo Region)
AMO is pleased that 10% discounting for the above services will be eliminated. In addition, existing parkland provisions will be maintained and can now be used in conjunction with community benefit charges for the same development. With added services to DCs, the CBC is now a flexible tool for use by single and lower-tier municipalities. It can fund any municipal service that is not being recovered another way, so long as it is applied to higher-density residential developments of buildings with at least 10 units and five storeys or greater.
AMO and municipal partners advocated for many of the improvements in Bill 197. However, AMO is monitoring to ensure that “growth pays for growth” and that the changes achieve intended policy objectives and maintain municipal revenues. Further, the percentage of land value cap for the CBC will be set by a future regulation. AMO and other municipal stakeholders are keen to provide analysis and feedback to the government on the development of this regulation.
Development charges are a municipal revenue tool used to recover the costs of new municipal infrastructure needed to serve new neighbourhoods or developments. Provincial rules determine how these charges are calculated. Municipalities have sought provincial rules which serve the principle of “growth paying for growth” to recognize the service demands of new development on the existing property tax base.