established interest rates for developments that qualify for freezing and deferral of DC Fees under Bill 138. This interest provision, along with the ability for developers to request and enter into agreements for the payment of DCs before or after they would otherwise be payable under section 26.1(11) or section 26.2(7), and section 27 of the DCA are authorized by the provisions of the new DC Bylaw.
On September 18, 2020, further changes to the Development Charges Act (DCA) came into force through Bill 197, the COVID-19 Economic Recovery Act, building on amendments previously proposed through Bill 108, the More Homes, More Choices Act. The changes brought a number of services, including parks, recreation, and library services, among others, back into the DCA. The removal of the 10% legislated discount for “soft” services, as previously proposed through Bill 108, was also enacted. As such, the Consolidated DC Background Study Report includes the development charges for Park Development, Recreation, and Public Libraries, and is compliant with all recent amendments to the DCA.
Parking services remain excluded from the amended DCA and can be transferred to the new Community Benefits Charge (CBC) regime, however the City may continue to collect Parking services DCs through its previous DC By-law 60-2015 until the earlier of September 18, 2022, or enactment of a CBC by-law.
This Consolidated Report of November 5, 2020 updates the Development Charges (DC) Background Study released on March 5, 2020. Following the release of that report, the 2020 DC Background Study was put on hold due to COVID-19 restrictions and the provincial emergency order, which extended until July 23, 2020.
More information on CBCs will be reported separately to City Council.
Discussion:
Purpose of the DC Background Study
As a municipality grows, it requires capital expenditures for a variety of infrastructure such as new or expanded roads, sewers, fire stations, parks, libraries, etc. These expenditures can be financed by way of development charges or alternatively by the general taxpayers. It should be noted that these fees do not replace subdivision agreements with developers that ensure that local services are provided; development charges cover citywide/specific area services.
Financing by way of development charges is consistent with the user pay principle in that the individuals/corporations responsible for, and benefiting from, the growth related expenditures pay for those costs. These fees are typically paid at the time a building permit is issued. Conversely, financing growth related expenditures from the general tax base forces existing taxpayers (who have already paid for the existing infrastructure) to pay again for the new, growth related expenditures . Therefore, the municipality’s choice is to forego needed capital expenditures or fund the shortfall from existing taxpayers. Raising the total shortfall from property taxes would increase taxes on the average home and would likely result in much needed capital projects being postponed due to lack of funds being available to undertake the work.
The Development Charges Act, 1997 (DCA), and its associated Ontario Regulation 82/98 (O.Reg. 82/98), allow municipalities in Ontario to recover development-related capital costs from new development. This City of Windsor Development Charges Background Study is presented