Niagara calculates the cost of Bill 23

Ontario promises to make municipalities ‘whole’ if they can’t fund housing infrastructure, services due to controversial move

Niagara municipalities are hoping the province comes through with a promise this week to keep them “whole” if they are financially impacted by Bill 23, but are still awaiting details on how that will happen.

Municipalities across Ontario have raised concerns that the bill reduces, freezes or exempts fees they charge to developers for growth-related services like roads and infrastructure, transferring the costs to taxpayers.

If the Ontario government does not compensate municipalities for the lost revenue they will incur due to Bill 23, it could mean a doubledigit regional property tax increase annually to make up the difference, warned Niagara Region Chair Jim Bradley.

“Our early calculation is it would increase our property taxes by11per cent per year,” he said, adding the tax hike would be needed to cover the $122-million annual loss in revenue, due to development charges being waived or reduced by the legislation.

“We are encouraged the minister is talking about at least providing some compensation if indeed they were to proceed with reducing or eliminating development charges,” Bradley said, referring to a letter from Municipal Affairs and

Housing Minister Steve Clark to the Association of Municipalities of Ontario on Wednesday that said there should be no cost shortfall for housing infrastructure as a result of Bill 23 if they meet targets for new developments.

“If the province were to step in and provide the funds that were previously provided by developers, in terms of development charges, we would be in a reasonable position,” Bradley said.

While the government also intends to audit some municipalities looking at their finances and reserve funds, Bradley said that money is “not just sitting there in a kitty waiting to be raided.”

He said Niagara Region’s reserves are intended to pay “for future costs that are going to be there in a variety of fields.”

For instance, the construction of a new wastewater treatment plant in Niagara Falls with an estimated cost of more than $300 million is one future project that will help support further development in Niagara, he said.

“We would love to see development charges contributing to that,” in addition to contributions from upper-tier governments, Bradley said.

How the bill will affect the bottom line at each of Niagara’s three biggest cities is still being calculated.

Welland’s chief administrative officer Steve Zorbas said staff is currently getting ready to provide an update to council on Bill 23 and development charges at a Dec. 20 meeting.

With the bill recently receiving royal assent, city staff want to look at the regulations and determine the impact on Welland.

“We’re doing our research. We know there will be some impact,” he said.

In 2021, the city collected $5 million in development charges and, to date, $5.8 million this year.

The funds help offset the increase in capital costs attributed to the growth in such things as transit, parks and recreation, government, fire services, public works, roads, stormwater management, water, wastewater and library services.

Earlier this year, Welland increased its development charges and Zorbas said the city needs to understand how Bill 23 will be phased in.

The city also needs to understand what background studies will no longer be required when it comes to new development and how those will be backed out of the development charge bylaw.

“There are more questions than answers,” he said.

St. Catharines only adopted development charges in the last year, along with community benefits and parkland dedication charges.

Mayor Mat Siscoe said city staff is crunching numbers to determine how the bill will impact what the city was expecting to collect.

But Siscoe said the overall impact on the city goes beyond those fees. The bill effectively downloads some of the planning functions from Niagara Region to lower-tier municipalities making it harder to calculate the true impact on the city.

“For some of the bigger cities that are one-tier municipalities, it’s a little bit easier because they already have all of the planning function in house, so they are really just looking at the development changes, but for us it’s a little bit more complicated than that,” he said.

“And it’s going to be a little more complicated regionwide because we just don’t have certainty yet as to how that planning function will change.

“The reality is that any planning function that’s taken away from the region has to be taken up by the city.”

Siscoe said he sent a letter to Clark and the premier last week saying if they are going through with the changes, there needs to be some help to make municipalities financially whole, so he was encouraged by the letter the letter the ministry sent to AMO.

“I know I wasn’t the only one saying that. I’m heartened by the fact that they’ve been listening. The devil is always in the details but ultimately we share the same goal as the province does. We want to get housing built and we want to get it built quickly,” Siscoe said.

Jason Burgess, chief administrative officer for City of Niagara Falls, said he’s “pleased” the Ontario government is promising to make municipalities “whole” if they can’t fund housing infrastructure and services due to the controversial bill.

Burgess said without provincial support, Bill 23 would put more pressure on the tax levy, adding there’s “still going to be pressures on the tax levy.”

“This is helpful news — we’ll have to find (more of) the details. (City staff and council) did have concerns about (the bill), we raised those to the province in our official comments.”

“I think this council was actually quite smart, I will say, because I think what this council did (during last week’s meeting) was they said, ‘OK, these are concerns, let’s not throw the baby out with the bath water, let’s make sure that we continue the dialogue.’

“I think that was actually a positive because I think that’s what they did — the government put some stuff out, they got some bold plans and they got some feedback and now they’re looking to make some changes to that to accommodate it.”

Burgess said he was “nervous” about the bill but was confident the city would “figure out a way to continue to provide good services.”

“It just might be more money on the levy. But at the end of the day, you have to remember, everyone only has one wallet, whether it’s going to be provincial tax or federal tax or your property taxes, if you want affordable housing, if you want certain programs, it’s going to get taxed out of your wallet and it really shouldn’t matter which one it comes from.”