Regional councillor wants provincial housing legislation paused to measure negative impacts on municipalities

Region of Waterloo set to lose $535 million in development charges over 10 years

Thestar.com
De. 2, 2022
Liz Monteiro

Rookie regional Coun. Colleen James wants the province to hit pause on its recently passed housing legislation that will cut the fees municipalities say they need to build infrastructure to serve the new housing.

James wants the province to have more “purposeful dialogue” with local municipalities and the region on next steps for Ontario’s More Homes Built Faster Act, passed earlier this week.

“The reality is that there has been no consultation with municipalities in the creation of this bill and addressing its impacts,” she said in an interview Thursday.

James is bringing a motion to next week’s planning and works committee, telling the Doug Ford government that Waterloo Region, as well as other municipalities, will be hurt by the legislation, which the province says will see more houses built. But it also cuts the development charges municipalities collect to pay for sewer and water infrastructure for those new housing developments.

The region will lose up to $535 million in development charges over 10 years, James said. The Association of Municipalities of Ontario estimates there will be a $5.1 billion revenue shortfall in municipalities across the province.

“We really have to stop and say, ‘Wait a second now. If we’re not getting those development charges, this does impact the taxpayers and that is not OK in this climate,’ ” James said.

Municipal leaders across the province say the loss in revenue will mean costs are downloaded to the taxpayer.

Without access to development charges, “we will have to turn to the property tax rate, or in some case, water and wastewater rates,” said Craig Dyer, the region’s chief financial officer.

All this comes at a time when municipalities, including the Region of Waterloo, are facing tough budget shortfalls.

And that isn’t OK, said James, who sat through a budget strategy meeting on Wednesday where councillors were told to brace themselves for a hefty tax hike in 2023.

Regional staff are projecting a 9.8 per cent tax hike, due to skyrocketing inflation, rising fuel prices and higher borrowing rates.

Housing Minister Steve Clark has said the intent of Bill 23 is to build more homes -- 1.5 million over 10 years.

“That is why our decision to rein in unsustainable and out-of-control municipal fees on new homebuyers is the right thing to do, and that is why our position on Bill 23 will not waver,” Clark said in a recent letter to Ontario’s Big City Mayors.

Clark said the province will launch a third-party audit of some Ontario municipalities to better understand development charges and how housing growth can be paid for without further impacting taxpayers.

Nearly everyone agrees more houses are needed, James said. A housing crisis across the province is fuelling demand for more housing as well as affordable housing for those on limited incomes.

Critics and housing advocates say the housing bill doesn’t compel developers to build affordable housing units or supportive housing for those experiencing chronic homelessness.

James said the region has received about 300 emails from people concerned with Bill 23.

“There should be some scaling back here and taking a deep dive into where there can be changes within this legislation,” she said.

In a finance report coming to regional councillors next week, staff say the new law will mean “municipalities will need to consider delaying the construction of infrastructure needed to accommodate new housing and assume additional risk by taking on more long-term debt and the associated debt financing costs.”

The housing legislation will not result in houses being built faster, the report said. In fact, housing prices will increase with higher property taxes and user rates.

“To the contrary, housing supply could be slowed as infrastructure projects are deferred due to restricted municipal cash flow,” the report said.