City staff are warning that the loss of development charges mandated in the Ontario government’s housing plan could have a serious impact on Toronto's ability to implement its Housing Action Plan.
Released Tuesday, the plan lays out a roadmap for achieving or exceeding the provincial housing target of 285,000 new homes in Toronto over the next 10 years. The plan aims to increase housing supply, housing choice and affordability through a range of actions and policies and recommends that key staff report back annually on the progress of the plan, with the first report expected to be tabled before the end of this year.
However city staff note in the report that achieving any of the plan’s goals will be extremely difficult without recouping some of the city revenues handed to developers by the provincial government as a way to hopefully spur the building of some types of housing, such as rental and affordable units.
The move is projected to cost the city $200 million a year in revenue. The province has said, however, that it will make Toronto ”whole" for any loss of revenue arising from the new law. However the province has at the same time said that they want to send in auditors to make sure that the city isn't wasting money and Premier Doug Ford has said that much of the lost revenue can probably be found in reducing wasteful spending. Though he has offered no evidence of waste so far.
“It is critical to note that the city's ability to continue to deliver on the HousingTO Plan and HAP, and to fund other housing programs plus the needed community infrastructure to support new housing, is currently at high risk due to the significant financial impacts arising from the recently enacted provincial Bill 23, More Homes Built Faster Act, 2022 ('Bill 23’),” city staff wrote in their report. “Specifically, Bill 23 has removed the city's ability to collect development charges for housing services, resulting in an approximate $1.2 billion in lost revenues over 10 years.”
Staff go on to say that if Toronto is not fully reimbursed for the loss of revenue, and in the absence of any new revenue tools, “the city will not be able to provide the services and investments essential to support growth even in the short term, deliver housing programs necessary to scale up supply, and plan for complete communities.”
Speaking with reporters at Toronto City Hall Tuesday morning, Deputy Mayor Jennifer McKelvie said she would be having a conversation today with Ontario Finance Minister Peter Bethlenfalvy.
“I will remind him of that promise around Bill 23,” McKelvie said. “We are working with them around the audit and the terms of that audit. They have said that they want to have a full accounting, a full look at the costs that we think will be incurred by us, the lost revenue. They have made that commitment to keep us whole and we're going to try to hold them to that as much as we can.”
Asked if she has concerns about whether the province will come through on its commitment, she said "not yet" and noted that the provincial government came through for Toronto in 2022 to provide hundreds of millions of dollars to help with the “COVID hangover” which resulted in a major whole in the city’s budget.”
Following the meeting Tuesday, Bethlenfalvy said in a tweet that he was “happy” to host McKelvie at his office.
“We discussed how we can keep working together on shared priorities including building more homes, supportive housing, and key infrastructure including hospitals and subways,” he wrote.
However he did not provide any specific commitments from their discussions.
