'Trajectory for a financial crisis': Newmarket mayor worries province putting municipalities on road to financial ruin

'Crumbling streets, sidewalks' in future as province demands housing without giving communities sustainable funding, John Taylor says

Yorkregion.com
Aug. 28, 2023
Lisa Queen

The provincial government is putting municipalities on “a trajectory for a financial crisis” as it pushes to build 1.5 million homes by 2031 while hamstringing municipalities’ ability to pay for needed infrastructure, Newmarket Mayor John Taylor says.

“I’m not saying they are doing it on purpose but they’re doing it,” he said.

Without giving municipalities a sustainable funding source, residents can look forward to “crumbling streets, sidewalks, parks and recreation centres in the decades to come,” Taylor said.

Last year, Bill 23, the More Homes Built Faster Act, saw the province cut some development charges, fees municipalities charge developers on new construction to pay for roads, sewers and more. The fees are passed on to new home buyers.

The Region of York is bracing for a $1.9-billion financial hit over the next decade as a result. That number doesn’t include the financial impact on towns and cities.

Then, the province set housing targets for municipalities as part of its campaign to build 1.5 million homes by 2031 to address the housing crisis, a list that was expanded at this month’s Association of Municipalities of Ontario conference.

Municipal Affairs and Housing Minister, Steve Clark, announced the $1.2 billion Building Faster Fund, which will provide up to $400 million a year for three years to municipalities that meet targets.

The fund doesn’t begin to compensate municipalities for lost development charges, only lasts three years with no indication how municipalities will provide needed infrastructure after that and is tied to housing targets that many municipalities will find impossible to meet, Taylor said.

The province has told Newmarket to add 12,000 new homes by 2031, or 1,500 annually. Over the last decade, Newmarket has added about 300 homes a year.

Meanwhile, the targets are “tying funding for something that’s as important as infrastructure to something that we don’t control. If the (housing) market is weak or builders decide not to build because interest rates are too high or there’s a shortage of skilled labour, this is all out of our control. We don’t build houses. We issue permits when they’re asked for. We don’t build the homes and we can’t make someone build them,” he said.

“The logical thing with these ambitious targets is to say ‘Here’s extra funding to build the infrastructure you need to support these homes.' But the opposite occurred. Our funding source through development charges was dramatically reduced. That defies logic.”

Taylor supports building more homes and affordable housing but says municipalities need the financial tools to do that.

Meanwhile, the province will appoint facilitators to review governance of York Region and other regions and has given communities strong mayor powers if they have pledged to meet Queen’s Park’s housing targets -- both with eye to pushing through development.

Taylor sees strong mayor powers as something that will override democracy and fracture communities.

“Frankly, enough with the funding with strings attached, enough with the regional governance reviews, enough with the municipal audits, enough with the strong mayor powers, can we just focus on building housing and building affordable housing and building rental housing?”