St. Catharines reinstating development charges on residential and non-residential construction

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Ontario Construction News staff writer

Reintroducing development charges will “provide a more balanced approach where growth pays for growth, rather than the burden of growth-related infrastructure falling to the taxpayer, says the Mayor of St. Catharines.

After extensive public engagement – including the development industry and the development studies task force, city council approved a development charges background study and bylaw that reinstates development charges on Jan. 1, 2022.

Development charges on land development and redevelopment projects will help pay for the cost of infrastructure required to provide municipal services to new development, such as roads; transit; water and sewer infrastructure; fire services infrastructure; and park amenities and community centres, councillors said.

“Years ago, the City of St. Catharines made a smart decision to attract investment and redevelopment and now, the time has come for council to make another smart decision that better reflects the current state of investment attraction in St. Catharines,” said Mayor Walter Sendzik.

“This is a fair, balanced approached that will ensure that the costs of new development do not fall to the taxpayer and that growth will pay for growth in the future. Development charges will better position the city to invest in infrastructure and public realm improvements that benefit everyone.”

New charges – which will be applied to both residential and non-residential projects – will be city wide and will be lower than many municipal comparators and opportunities will exist for exemptions and grant programs to support projects such as affordable housing, employment creation and development in the urban core.

St. Catharines is currently the only municipality in Niagara Region that does not collect lower-tier development charges.

For 12 years, this put the municipality at a competitive advantage, however, most growth-related infrastructure built during that time was primarily funded from the tax levy and/or water/wastewater rates.

While the revenue will depend on development levels, a consultant hired to conduct the study has indicated the city could potentially collect millions of dollars in development charges on an annual basis to support infrastructure costs related to development and redevelopment.

The recently approved bylaw includes a transition period for developers with projects that are already underway. The charges themselves will be collectable beginning January 2022.

“Reinstating development charges is part of the city’s commitment towards better fiscal responsibility, stability and sustainability,” said Tami Kitay, director of planning and building services.

“This transformational shift corrects an unbalance whereby growth will pay for their fair share of growth and will assist with capital budget forecasting and financing, strategic decision making, and investment back into the community.”

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