Subscribe to the OCN Daily Newsletter!
Receive a free update of the latest Ontario Construction News each morning
Ontario Construction News staff writer
Some City of Toronto officials and politicians have expressed concerns about the revenue and city planning implications of Bill 108, The More Homes, More Choices Act, and the provincial budget.
Under the new legislation, a new “community benefits charge” is to combine three separate tools cities have used to secure cash for services and infrastructure, child care space and parkland.
Toronto planners and lawyers have been “combing through the sometimes vaguely-written bill in order to understand the impact, with, they say, little additional information from the province,” the Toronto Star reports.
“In the absence of implementation details, city staff are unable to provide detailed conclusions regarding the impacts that Bill 108 will have on the city from a financial impact, planning approval and appeal process and longer-term city-building perspective,” says a May 9 memo sent to council members.
A Toronto city staff report about operating budget challenges from the provincial budget released on April 19, says that the “estimated pressure on the City of Toronto Council-approved 2019 budget (based on best available information to date is $177.65 million.”
These direct costs relating to the cancellation of planned provincial tax funding, and direct cuts in resources for Toronto Public Health, Children’s Services, and Toronto Paramedic Services, do not take into account the indirect costs implied by the Bill 108 provisions.
“Bill 108 proposes replacing Section 37 of the Planning Act with a new community benefits authority that would make upfront development costs more predicable,” the city staff report says. “Development costs of soft services and in some cases parkland dedication would also be included in this new community benefits authority. The proposed changes are a comprehensive re-think fo the current financial tools available to the city.”
“Further assessment of the financial impacts to the city will be required as details become available. The proposed new authority replaces key planning and benefits tools that have brought a great deal of community infrastructure to Toronto.”
The staff report also provides observations about Bill 108’s proposal to freeze development charge rates at an earlier point in time, with the charges continuing to be paid at the usual time (generally building permit issuance).
The staff memo notes:
- Developers already use early rate triggering options and phase-in of rate changes to avoid pending development charges rate increases (city’s scheduled phase-ins are Nov. 1, 2019 and Nov. 1, 2020), reducing how much the city is able to recover. This problem is expected to worsen under the new changes; and
- The deferred collection is effectively a loan from municipalities to developers. Municipal borrowing capacity is not unlimited. The cost or benefit will depend on the interest rates set by regulation.
Bill 108 would overwrite the Planning Act’s Section 37 (density bonusing) and Section 42 (parkland dedication funds), coupled with changes to development charges, which builders need to pay when they get their building permits.
Under the new rules, Sections 37 and 42 will be overwritten with a single “community benefits charge.” Meanwhile, general development charges will only be allowed to be applied to infrastructure such as sewers and subway lines, but not for facilities such as libraries and child care centres – these “soft services” will only be paid for out of the new community benefits charge.
Adding to the challenge for planners and municipal politicians, (and bringing relief to builders and developers), the new community benefits charge is to be capped at an as-yet-unspecified percentage of the development site’s land value.
“What i would say I’m confident of, is that the city overall will be shortchanged,” Coun. Kristyn Wong-Tam (Ward 13 Toronto Centre) told the Toronto Star. “The way we collect dollars today in the various steams of collection … all of that will be weakened.”
Councillor Joe Cressy (Ward 10 Spadina-Fort York) observed: “The city’s going to get less money very clearly, for social infrastructure and parkland, so there will be fewer parks and less funds for affordable housing, child care spaces and others.”
“That is a direct negative impact and we know that,” he said. “How we would then be able to manage growth and change in a bustling city . . . we don’t know the answers to that yet.”
The provincial government, of course, has a different perspective on its new legislation’s impact.
“Our government is taking the politics out of Toronto’s planning decisions,” it says in a statement. “Councillors are able to make deals directly with developers, out of public view, at times negotiating vanity projects, in exchange for more density.”
The statement describes the money as “slush funds that the councillor manages and spends with no oversight or accountability.”
In addition to the possibly massive Planning Act changes costs to the city budget, city staff reported on other elements in the provincial budget that could costly for the city’s infrastructure spending.
The most significant capital project described relates to the cancellation of provincial funding for the Creative City Campus for the OCAD University, which would have included adding 50,000 sq. ft. of new space and renovating 95,000 sq. ft. of existing space. The previous Liberal government had committed $27 million towards the total projected costs of $60 million.
“To date, the university has received $7 million toward the project,” the city staff memo says. “The university, which haas a student population of 4,700, has raised $33 million from private downers, the federal government and institutional funds. The university has indicated it intents to seek other funding sources and complete the project.”