HomeMy WebLinkAbout2022-11-18Clarftwn
Electronic Council Communications Information
Package
Date: November 18, 2022
Time: 12:00 PM
Location: ECCIP is an information package and not a meeting.
Description: An ECCIP is an electronic package containing correspondence received by Staff for
Council's information. This is not a meeting of Council or Committee.
Alternate Format: If this information is required in an alternate format, please contact the
Accessibility Coordinator, at 905-623-3379 ext. 2131.
Members of Council: In accordance with the Procedural By-law, please advise the Municipal Clerk
at clerks@clarington.net, if you would like to include one of these items on the next regular agenda
of the appropriate Standing Committee, along with the proposed resolution for disposition of the
matter. Items will be added to the agenda if the Municipal Clerk is advised by Wednesday at noon
the week prior to the appropriate meeting, otherwise the item will be included on the agenda for the
next regularly scheduled meeting of the applicable Committee.
Members of the Public: can speak to an ECCIP item as a delegation. If you would like to be a
delegation at a meeting, please visit the Clarington website.
Electronic Council Communications Information Package (ECCIP)
November 18, 2022
Pages
1. Region of Durham Correspondence
2. Durham Municipalities Correspondence
3. Other Municipalities Correspondence
4. Provincial / Federal Government and their Agency Correspondence
4.1. Steve Clark, Minister of Municipal Affairs and Housing - Congratulations 3
Letter
5. Miscellaneous Correspondence
5.1. Watson & Associates Economists Ltd. - Assessment of Bill 23 (More 5
Homes Built Faster Act) - November 16, 2022
5.2. Minutes of the Newcastle BIA dates November 10, 2022 83
5.3. Minutes of the Solina Community Centre Board dated November 9, 2022 86
Page 2
From:
Minister (MMAH)
To:
Gallaaher. June
Subject:
Letter from Minister Steve Clark (4885)
Date:
November 15, 2022 1:15:27 PM
Attachments:
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EXTERNAL
Ministry of
Municipal Affairs
and Housing
Office of the Minister
777 Bay Street, 17th Floor
Toronto ON M7A 2J3
Tel.: 416 585-
7000
Ministere des
Affaires municipales
et du Logement
Bureau du ministre
777, rue Bay, 17e etage
Toronto (Ontario) M7A 2J3
Tel.: 416 585-7000
234-2022-4885
November 15, 2022
Your Worship
Mayor Adrian Foster
Municipality of Clarington
jgallagher@clarington.net
Dear Mayor Foster and Council:
Please accept my congratulations on your success in the recent municipal elections. I
want to thank you for your decision to serve the public, and I look forward to working
with you throughout the upcoming term.
As a former mayor, I know firsthand just how important municipal government is to
Ontarians. I also know your constituents expect local government to be effective and
responsive as you deliver critical local services, and that you expect the same in our
relationship.
Throughout my time as Minister of Municipal Affairs and Housing, I have been proud
Page 3
to work with mayors and councils across Ontario to deliver on our shared priorities. I
value the expertise and advice I have received from local governments, which has
helped shape our decision -making to date.
There is much work ahead of us. Our government is working hard to make living in
Ontario more affordable. Bill 23, the More Homes Built Faster Act, takes bold action
to advance our plan to address the housing crisis by building 1.5 million homes
across Ontario over the next 10 years. We will continue to work with all our municipal
partners to get shovels in the ground and build more homes faster.
As we work together to serve the people of our great province, I want to hear about
the challenges you face. I know that local representatives understand their
communities and that you can help us ensure that local government is working
harder, smarter and more efficiently. Best wishes to you and to council for success
over the next four years.
Sincerely,
Steve Clark
Minister
Page 4
Watson
& Associates
ECONOMISTS LTD.
November 11, 2022
To Our Development Charge Clients:
Re: Assessment of Bill 23 (More Homes Built Faster Act) —Development Charges
On behalf of our many municipal clients, we are continuing to provide the most up-to-
date information on the proposed changes to the Development Charges Act (D.C.A.) as
proposed by Bill 23 (More Homes Built Faster Act). As identified in our October 31,
2022 letter to you, our firm is providing an evaluation of the proposed changes to the
D.C.A. along with potential impacts arising from these changes. The following
comments will be included in our formal response to the Province, which we anticipate
presenting to the Standing Committee on Heritage, Infrastructure and Cultural Policy
next week.
Overview Commentary
The Province has introduced Bill 23 with the following objective: "This plan is part of a
long-term strategy to increase housing supply and provide attainable housing options
for hardworking Ontarians and their families." The Province's plan is to address the
housing crisis by targeting the creation of 1.5 million homes over the next 10 years. To
implement this plan, Bill 23 introduces a number of changes to the D.C.A., along with
nine other Acts including the Planning Act, which seek to increase the supply of
housing.
As discussed later in this letter, there are proposed changes to the D.C.A. which we
would anticipate may limit the future supply of housing units. For urban growth to occur,
water and wastewater services must be in place before building permits can be issued
for housing. Most municipalities assume the risk of constructing this infrastructure and
wait for development to occur. Currently, 26% of municipalities providing water/
wastewater services are carrying negative development charge (D.C.) reserve fund
balances for these services' and many others are carrying significant growth -related
debt. In addition to the current burdens, Bill 23 proposes to:
Phase in any new by-laws over five years which, on average, would reduce D.C.
revenues by approximately 10%;
Introduce new exemptions which would provide a potential loss of 10-15% of the
D.C. funding;
1 Based on 2020 Financial Information Return data.
2233 Argentia Rd. Office: 905-272-3600
Suite 301 Fax: 905-272-3602 H:\DCA-GEN\Bill 23\Letters to Clients\Assessment of Bill 23 (More Homes
Mississauga, Ontario www.watsonecon.ca Built Faster Act)— Development Charges.docx
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Remove funding of water/wastewater master plans and environmental
assessments which provide for specific planning and approval of infrastructure;
and
• Make changes to the Planning Act that would minimize upper -tier planning in
two-tier systems where the upper -tier municipality provides water/wastewater
servicing. This disjointing between planning approvals and timing/location of
infrastructure construction may result in inefficient servicing, further limiting the
supply of serviced land.
The loss in funding noted above must then be passed on to existing rate payers. This
comes at a time when municipalities must implement asset management plans under
the Infrastructure for Jobs and Prosperity Act to maintain existing infrastructure.
Significant annual rate increases may then limit funding to the capital budget and hence
delay construction of growth -related infrastructure needed to expand the supply of
serviced land.
The above -noted D.C.A. changes will also impact other services in a similar manner.
The removal of municipal housing as an eligible service will reduce municipalities'
participation in creating assisted/affordable housing units. Based on present D.C. by-
laws in place, over $2.2 billion in net growth -related expenditures providing for over
47,000 units (or 3.1 % of the Province's 1.5 million housing target) would be impacted by
this change.
The proposed changes to the D.C.A. result in a subsidization of growth by the existing
rate/taxpayer by reducing the D.C.s payable. Over the past 33 years, there have been
changes made to the D.C.A. which have similarly reduced the D.C.s payable by
development. These historical reductions have not resulted in a decrease in housing
prices; hence, it is difficult to relate the loss of needed infrastructure funding to
affordable housing. The increases in water/wastewater rates and property taxes would
directly impact housing affordability for the existing rate/taxpayer.
While the merits of affordable housing initiatives are not in question, they may be best
achieved by participation at local, provincial, and federal levels. Should the reduction in
D.C.s be determined to be a positive contributor to increasing the amount of affordable
housing, then grants and subsidies should be provided to municipalities to fund the
growth -related infrastructure and thereby reduce the D.C. In this way, the required
funding is in place to create the land supply. Alternatively, other funding options could
be made available to municipalities as an offset (e.g., the Association of Municipalities
of Ontario (AMO) has suggested municipalities have access to 1 % of HST,
consideration of a special Land Transfer Tax, etc.).
A summary of the proposed D.C.A. changes, along with our firm's commentary, is
provided below.
Watson & Associates Economists Ltd. PAGE 2
Assessment of Bill 23 (More Homes Built Faster Act) — Development Charges.do'Page 6
2. Changes to the D.C.A.
2.1 Additional Residential Unit Exemption: The rules for these exemptions are now
provided in the D.C.A., rather than the regulations and are summarized as follows:
Exemption for residential units in existing rental residential buildings — For rental
residential buildings with four or more residential units, the greater of one unit or
1 % of the existing residential units will be exempt from D.C.
Exemption for additional residential units in existing and new residential buildings
— The following developments will be exempt from a D.C.:
o A second unit in a detached, semi-detached, or rowhouse if all buildings
and ancillary structures cumulatively contain no more than one residential
unit;
o A third unit in a detached, semi-detached, or rowhouse if no buildings or
ancillary structures contain any residential units; and
o One residential unit in a building or structure ancillary to a detached, semi-
detached, or rowhouse on a parcel of urban land, if the detached, semi-
detached, or rowhouse contains no more than two residential units and no
other buildings or ancillary structures contain any residential units.
Analysis/Commentary
• For existing single-family homes, this change will not have an impact. For other
existing low/medium-density units and for all new units, however, this allowance
of a third additional unit that will be exempt from D.C.s adds a further revenue
loss burden to municipalities to finance infrastructure. This is of greatest concern
for water and wastewater services where each additional unit will require
additional capacity in water and wastewater treatment plants. This additional
exemption will cause a reduction in D.C.s and hence will require funding by water
and wastewater rates.
• Other services, such as transit and active transportation, will also be impacted as
increased density will create a greater need for these services, and without an
offsetting revenue to fund the capital needs, service levels provided may be
reduced in the future.
2.2 Removal of Housing as an Eligible D.C. service: Housing services would be
removed as an eligible service. Municipalities with by-laws that include a charge for
housing services can no longer collect for this service once subsection 2 (2) of
Schedule 3 of the Bill comes into force.
Analysis/Commentary
• The removal of housing services will reduce municipalities' participation in
creating assisted/affordable housing units and/or put further burden on municipal
Watson & Associates Economists Ltd. PAGE 3
Assessment of Bill 23 (More Homes Built Faster Act) — Development Charges.do Page 7
taxpayers. This service seeks to construct municipal affordable housing for
growing communities. The removal of this service could reduce the number of
affordable units being constructed over the next ten years, if the municipalities
can no longer afford the construction. Based on present D.C. by-laws in place,
over $2.2 billion in net growth -related expenditures providing for over 47,000
additional units (or 3.1 % of the Province's 1.5 million housing target) would be
impacted by this change.
2.3 New Statutory Exemptions: Affordable units, attainable units, inclusionary
zoning units and non-profit housing developments will be exempt from the payment of
D.C.s, as follows:
• Affordable Rental Units: Where rent is no more than 80% of the average market
rent as defined by a new bulletin published by the Ministry of Municipal Affairs
and Housing.
• Affordable Owned Units: Where the price of the unit is no more than 80% of the
average purchase price as defined by a new bulletin published by the Ministry of
Municipal Affairs and Housing.
• Attainable Units: Excludes affordable units and rental units; will be defined as
prescribed development or class of development and sold to a person who is at
"arm's length" from the seller.
o Note: for affordable and attainable units, the municipality shall enter into
an agreement that ensures the unit remains affordable or attainable for 25
years.
• Inclusionary Zoning Units: Affordable housing units required under inclusionary
zoning by-laws will be exempt from a D.C.
• Non -Profit Housing: Non-profit housing units are exempt from D.C. instalment
payments due after this section comes into force.
Analysis/Commentary
• While this is an admirable goal to create additional affordable housing units,
further D.C. exemptions will continue to provide additional financial burdens on
municipalities to fund these exemptions without the financial participation of
senior levels of government.
• The definition of "attainable" is unclear, as this has not yet been defined in the
regulations.
• Municipalities will have to enter into agreements to ensure these units remain
affordable and attainable over a period of time which will increase the
administrative burden (and costs) on municipalities. These administrative
burdens will be cumbersome and will need to be monitored by both the upper -tier
and lower -tier municipalities.
• It is unclear whether the bulletin provided by the Province will be specific to each
municipality, each County/Region, or Province -wide. Due to the disparity in
Watson & Associates Economists Ltd. PAGE 4
Assessment of Bill 23 (More Homes Built Faster Act) — Development Charges.do Page 8
incomes across Ontario, affordability will vary significantly across these
jurisdictions. Even within an individual municipality, there can be disparity in the
average market rents and average market purchase prices.
2.4 Historical Level of Service: Currently, the increase in need for service is limited
by the average historical level of service calculated over the ten year period preceding
the preparation of the D.C. background study. This average will be extended to the
historical 15-year period.
Analysis/Commentary
For municipalities experiencing significant growth in recent years, this may
reduce the level of service cap, and the correspondingly D.C. recovery. For
many other municipalities seeking to save for new facilities, this may reduce their
overall recoveries and potentially delay construction.
This further limits municipalities in their ability to finance growth -related capital
expenditures where debt funding was recently issued. Given that municipalities
are also legislated to address asset management requirements, their ability to
incur further debt may be constrained.
2.5 Capital Costs: The definition of capital costs may be revised to prescribe services
for which land or an interest in land will be restricted. Additionally, costs of studies,
including the preparation of the D.C. background study, will no longer be an eligible
capital cost for D.C. funding.
Analysis/Commentary
• Land
o Land costs are proposed to be removed from the list of eligible costs for
certain services (to be prescribed later). Land represents a significant
cost for some municipalities in the purchase of property to provide
services to new residents. This is a cost required due to growth and
should be funded by new development, if not dedicated by development
directly.
Studies
o Studies, such as Official Plans and Secondary Plans, are required to
establish when, where, and how a municipality will grow. These growth -
related studies should remain funded by growth.
o Master Plans and environmental assessments are required to understand
the servicing needs development will place on hard infrastructure such as
water, wastewater, stormwater, and roads. These studies are necessary
to inform the servicing required to establish the supply of lands for
development; without these servicing studies, additional development
cannot proceed. This would restrict the supply of serviced land and would
be counter to the Province's intent to create additional housing units.
Watson & Associates Economists Ltd. PAGE 5
Assessment of Bill 23 (More Homes Built Faster Act) — Development Charges.do Page 9
2.6 Mandatory Phase -in of a D.C.: For all D.C. by-laws passed after June 1, 2022,
the charge must be phased -in annually over the first five years the by-law is in force, as
follows:
• Year 1 — 80% of the maximum charge;
• Year 2 — 85% of the maximum charge;
• Year 3 — 90% of the maximum charge;
• Year 4 — 95% of the maximum charge; and
• Year 5 to expiry — 100% of the maximum charge.
Note: for a D.C. by-law passed on or after June 1, 2022, the phase -in provisions would
only apply to D.C.s payable on or after the day subsection 5 (7) of Schedule 3 of the Bill
comes into force (i.e., no refunds are required for a D.C. payable between June 1, 2022
and the day the Bill receives Royal Assent). The phased -in charges also apply with
respect to the determination of the charges under section 26.2 of the Act (i.e., eligible
site plan and zoning by-law amendment applications).
Analysis/Commentary
Water, wastewater, stormwater, and roads are essential services for creating
land supply for new homes. These expenditures are significant and must be
made in advance of growth. As a result, the municipality assumes the
investment in the infrastructure and then assumes risk that the economy will
remain buoyant enough to allow for the recovery of these costs in a timely
manner. Otherwise, these growth -related costs will directly impact the existing
rate payer.
The mandatory phase -in will result in municipalities losing approximately 10% to
15% of revenues over the five-year phase -in period. For services such as water,
wastewater, stormwater, and to some extent roads, this will result in the
municipality having to fund this shortfall from other sources (i.e., taxes and rates).
This may result in: 1) the delay of construction of infrastructure that is required to
service new homes; and 2) a negative impact on the tax/rate payer who will have
to fund these D.C. revenue losses.
Growth has increased in communities outside the Greater Toronto Area (G.T.A.)
(e.g. municipalities in the outer rim), requiring significant investments in water
and wastewater treatment services. Currently, there are several municipalities in
the process of negotiating with developing landowners to provide these treatment
services. For example, there are two municipalities within the outer rim (one is
10 km from the G.T.A. while the other is 50 km from the G.T.A.) imminently about
to enter into developer agreements and award tenders for the servicing of the
equivalent of 8,000 single detached units (or up to 20,000 high -density units).
This proposed change to the D.C.A. alone will stop the creation of those units
due to debt capacity issues and the significant financial impact placed on
Watson & Associates Economists Ltd. PAGE 6
Assessment of Bill 23 (More Homes Built Faster Act) — Development Charges.d gage 10
ratepayers due to the D.C. funding loss. Given our work throughout the
Province, it is expected that there will be many municipalities in similar situations.
Based on 2020 Financial Information Return (F.I.R.) data, there are 214
municipalities with D.C. reserve funds. Of those, 130 provide water and
wastewater services and of those, 34 municipalities (or 26%) are carrying
negative water and wastewater reserve fund balances. As a result, it appears
many municipalities are already carrying significant burdens in investing in water/
wastewater infrastructure to create additional development lands. This proposed
change will worsen the problem and, in many cases, significantly delay or inhibit
the creation of serviced lands in the future.
Note that it is unclear how the phase -in provisions will affect amendments to
existing D.C. by-laws.
2.7 D.C. By-law Expiry: A D.C. by-law would expire ten years after the day it comes
into force. This extends the by-law's life from five years, currently. D.C. by-laws that
expire prior to subsection 6 (1) of the Bill coming into force would not be allowed to
extend the life of the by-law.
Analysis/Commentary
The extension of the life of the D.C. by-law would appear to not have an
immediate financial impact on municipalities. Due to the recent increases in
actual construction costs experienced by municipalities, however, the index used
to adjust the D.C. for inflation is not keeping adequate pace (e.g., the most recent
D.C. index has increased at 15% over the past year; however, municipalities are
experiencing 40%-60% increases in tender prices). As a result, amending the
present by-laws to update cost estimates for planned infrastructure would place
municipalities in a better financial position.
As a result of the above, delaying the updating of current D.C. by-laws for five
more years would reduce actual D.C. recoveries and place the municipalities at
risk of underfunding growth -related expenditures.
2.8 Instalment Payments: Non-profit housing development has been removed from
the instalment payment section of the Act (section 26.1), as these units are now exempt
from the payment of a D.C.
Analysis/Commentary
• This change is more administrative in nature due to the additional exemption for
non-profit housing units.
2.9 Rental Housing Discount: The D.C. payable for rental housing development will
be reduced based on the number of bedrooms in each unit as follows:
• Three or more bedrooms — 25% reduction;
Watson & Associates Economists Ltd. PAGE 7
Assessment of Bill 23 (More Homes Built Faster Act) — Development Charges.d gage 11
Two bedrooms — 20% reduction; and
All other bedroom quantities — 15% reduction.
Analysis/Commentary
Further discounts to D.C.s will place an additional financial burden on
municipalities to fund these reductions.
The discount for rental housing does not appear to have the same requirements
as the affordable and attainable exemptions to enter into an agreement for a
specified length of time. This means a developer may build a rental development
and convert the development (say to a condominium) in the future hence
avoiding the full D.C. payment for its increase in need for service.
2.10 Maximum Interest Rate for Instalments and Determination of Charge for
Eligible Site Plan and Zoning By-law Amendment Applications: No maximum
interest rate was previously prescribed. Under the proposed changes, the maximum
interest rate would be set at the average prime rate plus 1 %. How the average prime
rate is determined is further defined under section 9 of Schedule 3 of the Bill. This
maximum interest rate provision would apply to all instalment payments and eligible site
plan and zoning by-law amendment applications occurring after section 9 of Schedule 3
of the Bill comes into force.
Analysis/Commentary
Setting the maximum interest rate at 1 %+ the average prime rate appears
consistent with the current approach for some municipalities but is a potential
reduction for others.
It appears a municipality can select the adjustment date for which the average
prime rate would be calculated.
The proposed change will require municipalities to change their interest rate
policies, or amend their by-laws, as well as increase the administrative burden on
municipalities.
2.11 Requirement to Allocate Funds Received: Similar to the requirements for
community benefits charges, annually, beginning in 2023, municipalities will be required
to spend or allocate at least 60% of the monies in a reserve fund at the beginning of the
year for water, wastewater, and services related to a highway. Other services may be
prescribed by the regulation.
Analysis/Commentary
This proposed change appears largely administrative and would not have a
financial impact on municipalities. This can be achieved as a schedule as part of
the annual capital budget process or can be included as one of the schedules
Watson & Associates Economists Ltd. PAGE 8
Assessment of Bill 23 (More Homes Built Faster Act) - Development Charges.clNge 12
with the annual D.C. Treasurer Statement. This, however, will increase the
administrative burden on municipalities.
2.12 Amendments to Section 44 (Front -ending): This section has been updated to
include the new mandatory exemptions for affordable, attainable, and non-profit
housing, along with required affordable residential units under inclusionary zoning by-
laws.
Analysis/Commentary
• This change is administrative to align with the additional statutory exemptions.
2.13 Amendments to Section 60: Various amendments to this section were required
to align the earlier described changes.
Analysis/Commentary
• These changes are administrative in nature.
We will continue to monitor the legislative changes and advise as the Bill proceeds.
Yours very truly,
WATSON & ASSOCIATES ECONOMISTS LTD.
Gary Scandlan, BA, PLE, Managing Partner
Andrew Grunda, MBA, CPA, CMA, Principal
Jamie Cook, MCIP, RPP, PLE, Managing Partner
Peter Simcisko, BA (Hons), MBE, Managing Partner
Sean -Michael Stephen, MBA, Managing Partner
Jack Ammendolia, BES, PLE, Managing Partner
Watson & Associates Economists Ltd. PAGE 9
Assessment of Bill 23 (More Homes Built Faster Act) - Development Charges.clNge 13
Watson
& Associates
ECONOMISTS LTD.
November 16, 2022
To Our Municipal Clients:
Re: Assessment of Bill 23 (More Homes Built Faster Act) — Community Benefits
Charges
On behalf of our many municipal clients, we are continuing to provide the most up-to-
date information on the proposed changes to the Planning Act related to community
benefits charges (C.B.C.$), as proposed by Bill 23 (More Homes Built Faster Act). As
identified in our October 31, 2022 letter to you, our firm is providing an evaluation of the
proposed changes to C.B.C.s along with potential impacts arising from these changes.
The following comments will be included in our formal response to the Province, which
we anticipate presenting to the Standing Committee on Heritage, Infrastructure and
Cultural Policy later this week.
1. Overview Commentary
The Province has introduced Bill 23 with the following objective: "This plan is part of a
long-term strategy to increase housing supply and provide attainable housing options
for hardworking Ontarians and their families." The Province's plan is to address the
housing crisis by targeting the creation of 1.5 million homes over the next 10 years. To
implement this plan, Bill 23 introduces several changes to the Planning Act, along with
nine other Acts including the Development Charges Act (D.C.A.) and the Conservation
Authorities Act, which seek to increase the supply of housing.
One of the proposed amendments to the Planning Act seeks to exempt affordable
housing units (ownership and rental) and attainable housing units from C.B.C.s. While
the creation of affordable housing units is an admirable goal, there is a lack of robust
empirical evidence to suggest that reducing development -related fees improves housing
affordability. Municipalities rely on C.B.C. funding to emplace the critical infrastructure
needed to maintain livable, sustainable communities as development occurs.
Introducing additional exemptions from the payment of these charges results in further
revenue losses to municipalities. The resultant shortfalls in capital funding then need to
be addressed by delaying growth -related infrastructure projects and/or increasing the
burden on existing taxpayers through higher property taxes (which itself reduces
housing affordability). If the additional exemptions from C.B.C.s are deemed to be an
important element of increasing the affordable housing supply, then adequate transfers
from the provincial and federal governments should be provided to municipalities to
offset the revenue losses resulting from these policies.
2233 Argentia Rd. Office: 905-272-3600
Suite 301 Fax: 905-272-3602 https://watsonecon.sharepoint.com/sites/Bi1123/Shared
Documents/General/Assessment of Bill 23 (More Homes Built Faster Act)
Mississauga, Ontario www.watsonecon.ca Community Benefits Charges - November 16, 2022.docx
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A summary of the proposed C.B.C. changes, along with our firm's commentary, is
provided below.
2. Changes to the Planning Act— C.B.C.s
2.1 New Statutory Exemptions: Affordable residential units, attainable residential
units, and inclusionary zoning residential units will be exempt from the payment of
C.B.C.s., with definitions provided as follows:
• Affordable Residential Units (Rented): Where rent is no more than 80% of the
average market rent as defined by a new bulletin published by the Ministry of
Municipal Affairs and Housing.
• Affordable Residential Units (Ownership): Where the price of the unit is no more
than 80% of the average purchase price as defined by a new bulletin published
by the Ministry of Municipal Affairs and Housing.
• Attainable Residential Units: Excludes affordable units and rental units; will be
defined as prescribed development or class of development and sold to a person
who is at "arm's length" from the seller.
• Inclusionary Zoning Units: Affordable housing units required under inclusionary
zoning by-laws.
The exemption is proposed to be implemented by applying a discount to the maximum
amount of the C.B.C. that can be imposed (i.e., 4% of land value, as specified in section
37 of the Planning Act). For example, if the affordable, attainable, and/or inclusionary
zoning residential units represent 25% of the total building floor area, then the maximum
C.B.C. that could be imposed on the development would be 3% of total land value (i.e.,
a reduction of 25% from the maximum C.B.C. of 4% of land value).
Analysis/Commentary
While this is an admirable goal to create additional affordable housing units,
further C.B.C. exemptions will continue to provide additional financial burdens on
municipalities to fund these exemptions without the financial participation of
senior levels of government.
The definition of "attainable" is unclear, as this has not yet been defined in the
regulations.
Under the proposed changes to the D.C.A, municipalities will have to enter into
agreements to ensure that affordable units remain affordable for 25 years and
that attainable units are attainable at the time they are sold. An agreement does
not appear to be required for affordable/attainable residential units exempt from
payment of a C.B.C. Assuming, however, that most developments required to
pay a C.B.C. would also be paying development charges, the units will be
covered by the agreements required under the D.C.A. These agreements should
be allowed to include the C.B.C. so that if a municipality needs to enforce the
Watson & Associates Economists Ltd. PAGE 2
Assessment of Bill 23 (More Homes Built Faster Act) Community Benefits CharPsaNNovvem%16, 2022
provisions of an agreement, both development charges and C.B.C.s could be
collected accordingly.
o These agreements will increase the administrative burden (and costs) on
municipalities. Furthermore, the administration of these agreements will
be cumbersome and will need to be monitored by both the upper -tier and
lower -tier municipalities.
It is unclear whether the bulletin provided by the Province will be specific to each
municipality, each County/Region, or Province -wide. Due to the disparity in
incomes across Ontario, affordability will vary significantly across these
jurisdictions. Even within an individual municipality, there can be disparity in the
average market rents and average market purchase prices.
Where municipalities are imposing the C.B.C. on a per dwelling unit basis, they
will need to ensure that the total C.B.C. being imposed for all eligible units is not
in excess of the incremental development calculation (e.g., as per the example
above, not greater than 3% of the total land value).
2.2 Limiting the Maximum C.B.C. in Proportion to Incremental Development:
Where development or redevelopment is occurring on a parcel of land with an existing
building or structure, the maximum C.B.C. that could be imposed would be calculated
based on the incremental development only. For example, if a building is being
expanded by 150,000 sq.ft. on a parcel of land with an existing 50,000 sq.ft. building,
then the maximum C.B.C. that could be imposed on the development would be 3% of
total land value (i.e., 150,000 sq.ft. / 200,000 sq.ft. = 75% x 4% maximum prescribed
rate = 3% of total land value).
Analysis/Commentary
With municipal C.B.C. by-laws imposing the C.B.C. based on the land total land
value or testing the C.B.C. payable relative to total land value, there will be a
reduction in revenues currently anticipated. At present, some municipal C.B.C.
by-laws have provisions excluding existing buildings from the land valuation used
to calculate the C.B.C. payable or to test the maximum charge that can be
imposed. As such, this proposal largely seeks to clarify the administration of the
charge.
Watson & Associates Economists Ltd. PAGE 3
Assessment of Bill 23 (More Homes Built Faster Act) Community Benefits CharPsaNNovvemie616, 2022
We will continue to monitor the legislative changes and will keep you informed as the
Bill proceeds.
Yours very truly,
WATSON & ASSOCIATES ECONOMISTS LTD.
Andrew Grunda, MBA, CPA, CMA, Principal
Gary Scandlan, BA, PLE, Managing Partner
Jamie Cook, MCIP, RPP, PLE, Managing Partner
Peter Simcisko, BA (Hons), MBE, Managing Partner
Sean -Michael Stephen, MBA, Managing Partner
Jack Ammendolia, BES, PLE, Managing Partner
Watson & Associates Economists Ltd. PAGE 4
Assessment of Bill 23 (More Homes Built Faster Act) Community Benefits CharPsaNNovveV16, 2022
Watson
& Associates
ECONOMISTS LTD.
November 16, 2022
To Our Parkland Dedication By -Law Clients:
Re: Assessment of Bill 23 (More Homes Built Faster Act)
On behalf of our many municipal clients, we are continuing to provide the most up-to-
date information on the proposed changes to the parkland dedication requirements of
the Planning Act, as proposed by Bill 23 (More Homes Built Faster Act). As identified in
our October 31, 2022 letter to you, our firm is providing an evaluation of the proposed
changes to section 42 of the Planning Act, along with potential impacts arising from
these changes. The following comments will be included in our formal response to the
Province, which we anticipate presenting to the Standing Committee on Heritage,
Infrastructure and Cultural Policy later this week.
1. Overview Commentary
The Province has introduced Bill 23 with the following objective: "This plan is part of a
long-term strategy to increase housing supply and provide attainable housing options
for hardworking Ontarians and their families." The Province's plan is to address the
housing crisis by targeting the creation of 1.5 million homes over the next 10 years. To
implement this plan, Bill 23 introduces a number of changes to the Planning Act (along
with nine other Acts, including the Development Charges Act (D.C.A.)), which seek to
increase the supply of housing.
As discussed later in this letter, the proposed changes to parkland dedication would
significantly reduce the amount of parkland conveyance and payments -in -lieu (P.I.L.) of
parkland to municipalities. The proposed changes under Bill 23 would impact
municipalities by:
• Reducing the amount of development subject to parkland dedication by
exempting affordable, attainable, non-profit and additional residential dwelling
units;
• Reducing P.I.L. revenues for some developments by grandfathering in charges
by up to 2 years, reflecting land values at the time of Site Plan and Zoning By-law
Amendment applications;
• Reducing and capping the alternative requirements for parkland dedication,
which results in significant reductions in parkland conveyance and P.I.L.
revenues, particularly for high -density developments;
• Increasing the administrative burden on municipalities by requiring the
preparation of and consultation on a parks plan with the passage of a parkland
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dedication by-law, whether utilizing the standard or alternative requirements, and
by requiring the allocation and reporting on funds annually; and
Limiting local decision -making by allowing the Province to prescribe criteria for
municipal acceptance of incumbered lands and privately owned public space
(POPs) for parks purposes.
It is anticipated that the resultant loss in parkland dedication from development will
result in either a cross -subsidization from existing taxpayers having to provide increased
funding for parks services to maintain planned levels of service in their community, or
an erosion of service levels over time. The timing of these changes, and others
proposed in Bill 23 to limit funding from development, is occurring at a time when
municipalities are faced with increased funding challenges associated with cost inflation
and the implementation of asset management plans under the Infrastructure for Jobs
and Prosperity Act.
A summary of the proposed parkland dedication changes under section 42 of the
Planning Act, along with our firm's commentary, is provided below.
2. Changes to Section 42 of the Planning Act
2.1 New Statutory Exemptions: Affordable residential units, attainable residential
units, inclusionary zoning residential units, non-profit housing and additional residential
unit developments will be exempt from parkland dedication requirements. For
affordable, attainable, and inclusionary zoning residential units, the exemption is
proposed to be implemented by:
discounting the standard parkland dedication requirements (i.e., 5% of land)
based on the proportion of development excluding affordable, attainable and
inclusionary zoning residential units relative to the total residential units for the
development-, or
where the alternative requirement is imposed, the affordable, attainable and
inclusionary zoning residential units would be excluded from the calculation.
For non-profit housing and additional residential units, a parkland dedication by-law (i.e.,
a by-law passed under section 42 of the Planning Act) will not apply to these types of
development:
Affordable Rental Unit: as defined under subsection 4.1 (2) of the D.C.A., where
rent is no more than 80% of the average market rent as defined by a new bulletin
published by the Ministry of Municipal Affairs and Housing.
Affordable Owned Unit: as defined under subsection 4.1 (3) of the D.C.A., where
the price of the unit is no more than 80% of the average purchase price as
defined by a new bulletin published by the Ministry of Municipal Affairs and
Housing.
Watson & Associates Economists Ltd. PAGE 2
Assessment of Bill 23 (More Homes Built Faster Act) - Parkland Dedication - Noyg age 1 g
• Attainable Unit: as defined under subsection 4.1 (4) of the D.C.A., excludes
affordable units and rental units, will be defined as prescribed development or
class of development and sold to a person who is at "arm's length" from the
seller.
• Inclusionary Zoning Units: as described under subsection 4.3 (2) of the D.C.A.
• Non -Profit Housing: as defined under subsection 4.2 (1) of the D.C.A.
• Additional Residential Units, including:
o A second unit in a detached, semi-detached, or rowhouse if all buildings
and ancillary structures cumulatively contain no more than one residential
unit;
o A third unit in a detached, semi-detached, or rowhouse if no buildings or
ancillary structures contain any residential units; and
o One residential unit in a building or structure ancillary to a detached, semi-
detached, or rowhouse on a parcel of urban land, if the detached, semi-
detached, or rowhouse contains no more than two residential units and no
other buildings or ancillary structures contain any residential units.
Analysis/Commentary
While reducing municipal requirements for the conveyance of land or P.I.L. of
parkland may provide a further margin for builders to create additional affordable
housing units, the proposed parkland dedication exemptions will increase the
financial burdens on municipalities to fund these exemptions from property tax
sources (in the absence of any financial participation by senior levels of
government) or erode municipalities' planned level of parks service.
The definition of "attainable" is unclear, as this has not yet been defined in the
regulations to the D.C.A.
Under the proposed changes to the D.C.A, municipalities will have to enter into
agreements to ensure these units remain affordable and attainable over a period
of time, which will increase the administrative burden (and costs) on
municipalities. An agreement does not appear to be required for affordable/
attainable units exempt from parkland dedication. Assuming, however, that most
developments required to convey land or provide P.I.L. of parkland would also be
required to pay development charges, the units will be covered by the
agreements required under the D.C.A. As such, the Planning Act changes
should provide for P.I.L. requirements if the status of the development changes
during the period.
It is unclear whether the bulletin provided by the Province to determine if a
development is affordable will be specific to each municipality or aggregated by
County/Region or Province. Due to the disparity in incomes across Ontario,
affordability will vary significantly across these jurisdictions. Even within an
individual municipality there can be disparity in the average market rents and
average market purchase prices.
Watson & Associates Economists Ltd. /��7 PAGE 3
Assessment of Bill 23 (More Homes Built Faster Act) - Parkland Dedication - Nopnbber 116, 2V
• While the proposed exemptions for non-profit housing and additional residential
units may be easily applied for municipalities imposing the alternative
requirement, as these requirements are imposed on a per residential unit basis, it
is unclear at this time how a by-law requiring the standard provision of 5% of
residential land would be applied.
2.2 Determination of Parkland Dedication: Similar to the rules under the D.C.A., the
determination of parkland dedication for a building permit issued within two years of a
Site Plan and/or Zoning By-law Amendment approval would be subject to the
requirements in the by-law as at the date of planning application submission.
Analysis/Commentary
• If passed as currently drafted, these changes would not apply to site plan or
zoning by-law applications made before subsection 12 (6) of Schedule 9 of the
More Homes Built Faster Act comes into force.
• For applications made after the in -force date, this would represent a lag in P.I.L.
value provided to municipalities, as it would represent the respective land value
up to two years prior vs. current value at building permit issuance. For
municipalities having to purchase parkland, this will put additional funding
pressure on property tax funding sources to make up the difference, or further
erode the municipality's planned level of parks service.
2.3 Alternative Parkland Dedication Requirement: The following amendments are
proposed for the imposition of the alternative parkland dedication requirements:
The alternative requirement of 1 hectare (ha) per 300 dwelling units would be
reduced to 1 ha per 600 dwelling units where land is being conveyed. Where the
municipality imposes P.I.L. requirements, the amendments would reduce the
amount from 1 ha per 500 dwelling units to 1 ha per 1,000 net residential units.
Proposed amendments clarify that the alternative requirement would only be
calculated on the incremental units of development/redevelopment.
The alternative requirement would be capped at 10% of the land area or land
value where the land proposed for development or redevelopment is 5 ha or less;
and 15% of the land area or land value where the land proposed for development
or redevelopment is greater than 5 ha.
Analysis/Commentary
If passed as currently drafted, the decrease in the alternative requirements for
land conveyed and P.I.L. would not apply to building permits issued before
subsection 12 (8) of Schedule 9 of the More Homes Built Faster Act comes into
force.
Most municipal parkland dedication by-laws only imposed the alternative
requirements on incremental development. As such, the proposed amendments
Watson & Associates Economists Ltd. PAGE 4
Assessment of Bill 23 (More Homes Built Faster Act) - Parkland Dedication - Nopnluer 116, 2T
for net residential units seek to clarify the matter where parkland dedication by-
laws are unclear.
Section 42 previously imposed the alternative requirement caps of 10% and 15%
of land area or value, depending on the respective developable land area, for
developments only within designated transit -oriented communities. By repealing
subsection 42 (3.2) of the Planning Act, these caps would apply to all
developable lands under the by-law.
As illustrated in the figure below, lowering the alternative parkland dedication
requirement and imposing caps based on the developable land area will place
significant downward pressure on the amount of parkland dedication provided to
municipalities, particularly those municipalities with significant amounts of high -
density development. For example:
o Low -density development of 20 units per net ha (uph), with a person per
unit (P.P.U.) occupancy of 3.4, would have produced a land conveyance
of 0.98 ha per 1,000 population. The proposed change would reduce this
to 0.74 ha, approximately 75% of current levels.
o Medium -density development of 50 uph, with a P.P.U. of 2.6 would
produce land conveyance at 50% of current levels (0.64 vs. 1.28 ha/1,000
population).
o Low-rise development of 150 uph, with a P.P.U. of 2.6 would produce land
conveyance at 20% of current levels (0.43 vs. 2.15 ha/1,000 population).
P.I.L. would be approximately 1/3 of current levels.
o High-rise development of 300 uph, with a P.P.U. of 2.6 would produce
land conveyance at 10% of current levels (0.22 vs. 2.15 ha/1,000
population). P.I.L. would be approximately 17% of current levels.']
N Low-rise and high-rise developments with sites larger than 5 ha would only be
marginally better under the proposed changes, at 30% and 15% of land conveyance
and 50% and 25% P.I.L., respectively.
Watson & Associates Economists Ltd. PAGE 5
Assessment of Bill 23 (More Homes Built Faster Act) - Parkland Dedication - NopnIer 116, 22
Maximum Achievable Parkland Dedication (hectares per 1,000 population)
Development Sites e 5 hectares
High Density
Average PPU = 1.55
Medium Density
Average PPU = 2.60 1
Low Density
Average PPU = 3.40 {
300
units per ha Land"
P.E,L.—
150
units per ha Land"
50
units per ha Land-
P.I.L.'
20
units per ha Land -
0.00 0.50 1.00 1.50 2.00 2.50
Hectares per 1.000 population
■ Max imum achievable parkland dedication based on Bill 23 proposed changes
❑AddWonat parkland dedication achievable under current Planning Act provisions
Oe
' Using standard requirement (5% of land
area or land value)
" Using alternative requirement of 1 hectare
of land per 300 units-
- Using alternative P.I.L. requirement of 1
hectare per 500 units.
Watson & Associates Economists Ltd. PAGE 6
Assessment of Bill 23 (More Homes Built Faster Act) - Parkland Dedication - November 16, 2022
Page 23
Based on the proposed alternative requirement rates and land area caps,
municipalities would be better off:
o For land conveyance, imposing the alternative requirement for densities
greater than 30 units per ha.
■ Sites of 5 ha or less, land conveyance would be capped at 10% of
land area at densities greater than 60 units per ha.
■ Sites greater than 5 ha, land conveyance would be capped at 15%
of land area at densities greater than 90 units per ha.
o For P.I.L. of parkland, imposing the alternative requirement for densities
greater than 50 units per ha.
■ Sites of 5 ha or less, land conveyance would be capped at 10% of
land area at densities greater than 100 units per ha.
■ Sites greater than 5 ha, land conveyance would be capped at 15%
of land area at densities greater than 150 units per ha.
o For densities less than 30 units per ha, imposing the standard requirement
of 5% of land area for land conveyance and P.I.L. of parkland.
2.4 Parks Plan: The preparation of a publicly available parks plan as part of enabling
an Official Plan will be required at the time of passing a parkland dedication by-law
under section 42 of the Planning Act.
Analysis/Commentary
The proposed change will still require municipal Official Plans to contain specific
policies dealing with the provision of land for parks or other public recreational
purposes where the alternative requirement is used.
The requirement to prepare and consult on a parks plan prior to passing a by-law
under section 42 would now appear to equally apply to a by-law including the
standard parkland dedication requirements, as well as the alternative parkland
dedication requirements. This will result in an increase in the administrative
burden (and cost) for municipalities using the standard parkland dedication
requirements.
Municipalities imposing the alternative requirement in a parkland dedication by-
law on September 18, 2020 had their by-law expire on September 18, 2022 as a
result of the COVID-19 Economic Recovery Act amendments. Many
municipalities recently undertook to pass a new parkland dedication by-law,
examining their needs for parkland and other recreational assets. Similar
transitional provisions for existing parkland dedication by-laws should be
provided with sufficient time granted to allow municipalities to prepare and
consult on the required parks plan.
2.5 Identification of Lands for Conveyance: Owners will be allowed to identify
lands to meet parkland conveyance requirements, within regulatory criteria. These
lands may include encumbered lands and privately owned public space (POPs).
Watson & Associates Economists Ltd. PAGE 7
Assessment of Bill 23 (More Homes Built Faster Act) - Parkland Dedication - Nopnbber 116, 24
Municipalities may enter into agreements with the owners of the land regarding POPs to
enforce conditions, and these agreements may be registered on title. The suitability of
land for parks and recreational purposes will be appealable to the Ontario Land Tribunal
(OLT).
Analysis/Commentary
• The proposed changes allow the owner of land to identify encumbered lands for
parkland dedication consistent with the provisions available to the Minister of
Infrastructure to order such lands within transit -oriented communities. Similar to
the expansion of parkland dedication caps, these changes would allow this to
occur for all developable lands under the by-law. The proposed changes go
further to allow for an interest in land, or POPs.
• The municipality may refuse the land identified for conveyance, providing notice
to the owner with such requirements as prescribed. The owner, however, may
appeal the decision to the OLT. The hearing would result in the Tribunal
determining if the lands identified are in accordance with the criteria prescribed.
These "criteria" are unclear, as they have not yet been defined in the regulations.
• Many municipal parkland dedication by-laws do not except encumber lands or
POPs as suitable lands for parkland dedication. This is due, in part, to
municipalities' inability to control the lands being dedicated or that they are not
suitable to meet service levels for parks services. Municipalities that do accept
these types of lands for parkland or other recreational purposes have clearly
expressed such in their parkland dedication by-laws. The proposed changes
would appear to allow the developers of the land, and the Province within
prescribed criteria, to determine future parks service levels in municipalities in
place of municipal council intent.
2.6 Requirement to Allocate Funds Received: Similar to the requirements for
C.B.C.s, and proposed for the D.C.A. under Bill 23, annually beginning in 2023,
municipalities will be required to spend or allocate at least 60% of the monies in a
reserve fund at the beginning of the year.
Analysis/Commentary
• This proposed change appears largely administrative, increasing the burden on
municipalities. This change would not have a fiscal impact and could be
achieved as a schedule to annual capital budget. Moreover, as the Province
may prescribe annual reporting, similar to the requirements under the D.C.A. and
for a C.B.0 under the Planning Act.
Watson & Associates Economists Ltd. PAGE 8
Assessment of Bill 23 (More Homes Built Faster Act) - Parkland Dedication - Nopnbber 116,
We will continue to monitor the legislative changes and will keep you informed as the
Bill proceeds.
Yours very truly,
WATSON & ASSOCIATES ECONOMISTS LTD.
Andrew Grunda, MBA, CPA, CMA, Principal
Gary Scandlan, BA, PLE, Managing Partner
Jamie Cook, MCIP, RPP, PLE, Managing Partner
Peter Simcisko, BA (Hons), MBE, Managing Partner
Sean -Michael Stephen, MBA, Managing Partner
Jack Ammendolia, BES, PLE, Managing Partner
Watson & Associates Economists Ltd. PAGE 9
Assessment of Bill 23 (More Homes Built Faster Act) - Parkland Dedication - Nopnler 116, 26
Watson
& Associates
ECONOMISTS LTD.
November 14, 2022
To Our Conservation Authority and Municipal Clients:
Re: Assessment of Bill 23 (More Homes Built Faster Act) — Conservation Authorities
Act
On behalf of our many conservation authority and municipal clients, we are continuing
to provide the most up-to-date information on the proposed changes to the
Conservation Authorities Act (C.A. Act) as proposed by Bill 23 (More Homes Built
Faster Act). As identified in our October 31, 2022 letter to you, our firm is providing an
evaluation of the proposed changes to the C.A. Act along with potential impacts arising
from these changes. The following comments will be included in our formal response to
the Province.
Overview Commentary
The Province has introduced Bill 23 with the following objective: "This plan is part of a
long-term strategy to increase housing supply and provide attainable housing options
for hardworking Ontarians and their families." The Province's plan is to address the
housing crisis by targeting the creation of 1.5 million homes over the next 10 years. To
implement this plan, Bill 23 introduces a number of changes to the C.A. Act., along with
nine other Acts including the Development Charges Act and the Planning Act, which
seek to increase the supply of housing.
One of the proposed amendments to the C.A. Act is that the Minister of Natural
Resources and Forestry would have the authority to prevent a conservation authority
from increasing their fees and charges. Providing the Minister with this power is
proposed to limit the financial burden of any fee increases on developers and
landowners in an attempt to accelerate housing in Ontario and make housing more
affordable. The proposed limitation would result in a cross -subsidization of the costs of
plan review and permitting for development to existing taxpayers. This is a result of
these costs having to be offset by the municipal levy charged by conservation
authorities.
If these costs cannot be recovered from the municipal levy, then conservation
authorities would be under pressure to provide the intended level of service for
development approvals with less funding. When considered in combination with the
other changes proposed that would limit the scope of conservation authority
involvement in the development approvals process, this may impact the quality and
efficiency of the approvals process, and potentially impair the Province's goal of
accelerating an increase in housing development.
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Over the past 33 years, there have been other changes to legislation, such as the
Development Charges Act, that have reduced the costs payable by development.
These historical reductions have not resulted in a decrease in housing prices; hence, it
is difficult to relate how further limiting funding for municipal and conservation authority
services will increase the supply of affordable housing. Moreover, conservation
authority fees for plan review and permitting in the Greater Toronto Area and outer rim
typically comprise less than 0.1 % of the cost of a new home. This further illustrates the
limited impact this proposal would have on making housing more affordable. The
potential increase on the municipal levy, however, would add to the burden of housing
affordability for the existing taxpayer, particularly when coupled with the other legislative
changes proposed by Bill 23.
2. Changes to the C.A. Act
2.1 Changes to conservation authority involvement in the development
approvals process
Proarams and services that are arohibited within municipal and other oroarams
and services:
o Authorities would no longer be permitted to review and comment on a
proposal, application, or other matter made under a prescribed Act (if not
related to their mandatory programs and services under O. Reg. 686/21).
The Province proposes that a new regulation would prescribe the following
Acts in this regard:
■ The Aggregate Resources Act
■ The Condominium Act
■ The Drainage Act
■ The Endangered Species Act
■ The Environmental Assessment Act
■ The Environmental Protection Act
■ The Niagara Escarpment Planning and Development Act
■ The Ontario Heritage Act
■ The Ontario Water Resources Act
■ The Planning Act.
Exemptions to requiting a permit under section 28 of the Conservation Authorities
Act
o Where development has been authorized under the Planning Act it will be
exempt from required permits to authorize the development under section
28 of the Conservation Authorities Act. Exemptions to permits would also
be granted where prescribed conditions are met.
o Regulation making authority would be provided to govern the exceptions
to section 28 permits, including prescribing municipalities to which the
exception applies, and any other conditions or restrictions that must be
satisfied.
Watson & Associates Economists Ltd. PAGE 2
Assessment of Bill 23 (More Homes Built Faster Act) Conservation Authorities 'Page 28
• Shortened timeframe for decisions
o Applicants may appeal the failure of the authority to issue a permit to the
Ontario Land Tribunal within 90 days (shortened from 120 days currently).
Analysis/Commentary
These changes would focus an authority's role in plan review and commenting
on applications made under the above Acts (including the Planning Act) to the
risks of natural hazards only, limit the developments in which permits under
section 28 of the C.A Act would be required, and shorten timeframes for issuing
permits. Authorities would no longer be able to review applications with respect
to the natural heritage impacts.
With respect to natural heritage review requirements, the Province is proposing
to integrate the Provincial Policy Statement, 2020 (P.P.S.) and A Place To Grow:
Growth Plan for the Greater Golden Horseshoe into a new Province -wide
planning policy instrument. It is proposed that this new instrument could include
changes to natural heritage policy direction.
Recent amendments to the C.A. Act have already been implemented to limit a
conservation authority to programs and services within their core mandate unless
they have entered into an agreement with a municipal partner. Conservation
authorities are able to efficiently provide services, such as natural heritage review
required under the P.P.S., to municipalities across their watershed. Removing
this ability from conservation authorities may result in municipalities having to find
other external sources with the expertise to undertake this review, adding to the
cost and timeframes for development approvals and negatively impacting the
Province's goal of creating more housing.
2.2 Minister's ability to freeze fees
The Minister would have the ability to direct an authority to not change the
amount of any fee it charges (including for mandatory programs and services) for
a specified period of time.
Analysis/Commentary
• Limiting the ability of conservation authorities to recover the costs of plan review
and permitting from benefiting developers and landowners will place additional
financial burdens on conservation authorities and municipalities to fund these
activities.
• As the goal of the Province is to create more housing, it is suggested that any
limitations to conservation authority fees that are implemented should only apply
to plan review and permitting fees related to the construction of new homes.
Watson & Associates Economists Ltd. PAGE 3
Assessment of Bill 23 (More Homes Built Faster Act) Conservation Authorities 'Page 29
We will continue to monitor the legislative changes and advise as the Bill proceeds.
Yours very truly,
WATSON & ASSOCIATES ECONOMISTS LTD.
Sean -Michael Stephen, MBA, Managing Partner
Gary Scandlan, BA, PLE, Managing Partner
Andrew Grunda, MBA, CPA, CMA, Principal
Jamie Cook, MCIP, RPP, PLE, Managing Partner
Peter Simcisko, BA (Hons), MBE, Managing Partner
Jack Ammendolia, BES, PLE, Managing Partner
Watson & Associates Economists Ltd. PAGE 4
Assessment of Bill 23 (More Homes Built Faster Act) Conservation Authorities 'Page 30
Watson
& Associates
ECONOMISTS LTD.
November 14, 2022
Dear Clients:
Re: Assessment of Bill 23 (More Homes Built FasterAct) — Plannina Matters
On behalf of our many municipal clients, we are continuing to provide the most up to
date information on the proposed changes to housing and planning related legislation
as proposed by Bill 23 (More Homes Built Faster Act). As identified in our October 31,
2022 letter to you, our firm is providing an evaluation of the proposed changes along
with potential impacts arising from these changes. The following comments will be
included in our formal response to the Province which we anticipate presenting to the
Standing Committee on Heritage, Infrastructure and Cultural Policy this week.
Overview Commentary
The Province has introduced Bill 23 with the following objective: "This plan is part of a
long-term strategy to increase housing supply and provide attainable housing options
for hardworking Ontarians and their families." The Province's plan is to address the
housing crisis by targeting the creation of 1.5 million homes over the next 10 years. To
implement this, Bill 23 introduces a number of changes which seek to increase the
supply of housing. The following summary of proposed key housing and planning
related changes, along with our firm's commentary, is provided below. It is noted that
this letter specifically focuses on the impacts of Bill 23 regarding long-range planning
and growth management initiatives at the municipal level.
Streamlining Municipal Planning Responsibilities
Schedule 9 of the Bill proposes a number of amendments to the Planning Act.
Subsection 1 (1) of the Act is proposed to be amended to provide for two different
classes of upper -tier municipalities; those that have planning responsibilities and those
that do not. Changes are proposed to remove the planning policy and approval
responsibilities from the following upper -tier municipalities: Regions of Durham, Halton,
Niagara, Peel, Waterloo, and York, as well as the County of Simcoe. In addition, the
proposed changes could potentially be applied to additional upper -tier municipalities in
the future via regulation.
The proposed amendments under Schedule 9 of the Bill introduce numerous questions
related to the approach to ensuring effective leadership, management and integration of
regional and local land use planning across the affected jurisdictions. In addition to
providing a broad vision and planning direction with respect to the long-term
management of urban, rural and natural systems, upper -tier municipal planning
authorities also play a critical role regarding the coordination, phasing, and delivery of
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water, wastewater and transportation infrastructure as well as other municipal services.
The Provincial Policy Statement, 2020 (P.P.S.), sets out specific responsibilities for
upper -tier municipalities, in consultation with lower -tier municipalities, related to
planning coordination, housing, economic development, natural environment and
municipal infrastructure. Furthermore, the P.P.S. directs upper -tier municipal planning
authorities to provide policy direction to lower -tier municipalities on matters that cross
municipal boundaries.
While the proposed amendment to the Bill aims to streamline the land use planning
process across the affected municipalities, it risks increasing complexity and
miscommunication while adding to the technical and administrative efforts of both lower
tier and upper -tier municipalities, as well as the Province.
Furthermore, it would remove critical planning resources and knowledge at the upper
tier level which are required when addressing matters that cross technical disciplines
and municipal jurisdictions. This would potentially result in disjointed efforts and
outcomes with respect to local planning approvals and regional municipal service
delivery.
Review of the Potential Integration of A Place to Grow and the Provincial Policy
Statement (P.P.S.)
The Ministry of Municipal Affairs and Housing is undertaking a housing -focused policy
review of A Place to Grow: the Growth Plan for the Greater Golden Horseshoe
(G.G.H.), 2019, as amended, hereinafter referred to as the Growth Plan, and the P.P.S.
The Province is reviewing the potential integration of the P.P.S. and the Growth Plan
into a new Province -wide planning policy framework that is intended to:
• Leverage housing -supportive policies of both policy documents, while removing
or streamlining policies that result in duplication, delays or burden the
development of housing;
• Ensure key growth management and planning tools are available to increase
housing supply and support a range and mix of housing options;
• Continue to protect the environment, cultural heritage, and public health and
safety; and
• Ensure that growth is supported with the appropriate amount and type of
community infrastructure.
Since the release of the Growth Plan in 2006 under the Places to Grow Act, 2005,
G.G.H. municipalities have been in a continuous cycle of developing and defending
growth management processes and Official Plan updates. Over the past several years,
all G.G.H. upper -tier, single -tier, and most lower -tier municipalities have initiated the
process of updating their respective Official Plans to bring these documents into
conformity with the Growth Plan. Within the G.G.H., this process is referred to as a
Municipal Comprehensive Review (M.C.R.). Many of these municipalities have
Watson & Associates Economists Ltd. PAGE 2
Bill 23 Client Response Letter Re Planning Matters - Nov 14 2022 Page 32
completed their draft M.C.R. analyses and draft Official Plan updates for provincial
approval, while several others are approaching completion.
The required technical analysis associated with the growth analysis and urban land
needs assessment component of the M.C.R. process is set out in the Provincial Land
Needs Assessment (L.N.A.) methodology, which is specific to G.G.H. municipalities.[']
The M.C.R. process has required tremendous time and effort on behalf of
municipalities, consulting agencies, stakeholder groups and involved residents. The
results of these efforts represent a key planning milestone for all G.G.H. municipalities
and provide a solid foundation to build on as it relates to future growth management
implementation, monitoring and benchmarking.
Ontario municipalities located outside the G.G.H. are also now in the process of
updating their respective Official Plans in accordance with the P.P.S. For municipalities
in these jurisdictions, this process is referred to as a Comprehensive Review (C.R.).
While there are potential benefits regarding the consolidation of the P.P.S. and the
Growth Plan, as it relates to the M.C.R. and C.R. process, there are a number of issues
that should be considered regarding this effort, particularly as they relate to long-term
growth management and urban land needs, discussed below.
Long -Term Population and Employment Forecasts
Schedule 3 of the Growth Plan establishes minimum long-term population and
employment forecasts for upper -tier and single -tier municipalities in the G.G.H. to the
year 2051. The Ministry of Finance (M.O.F.) also establishes long-term population
forecasts for all Ontario Census Divisions (C.D.$), which typically represent upper -tier
municipalities, separated municipalities, and single -tier municipalities. The M.O.F.
forecasts are not recognized as official forecasts for planning purposes in Ontario;
however, they are updated annually and can be used to inform population forecasts in
Official Plans. Under a consolidated Growth Plan and P.P.S., consideration would need
to be given to the role and source of growth forecasts established by the Province for all
Ontario municipalities.
Provincial Land Needs Assessment Methodology Guidelines
As previously noted, the L.N.A. methodology for G.G.H. municipalities was updated by
the Province in 2020. In accordance with the Growth Plan, the L.N.A. methodology
provides a step-by-step approach to conducting growth forecasts and urban land need
assessments for upper -tier and single -tier municipalities for both Community Areas (i.e.,
living areas) and Employment Areas. All other Ontario municipalities rely on the 1995
Provincial Projection Methodology Guidelines (P.P.M.G.) for guidance regarding the
technical approach to growth forecasts and urban land need assessments. It is noted
M A Place to Grow: Growth Plan for the Greater Golden Horseshoe, Land Needs
Assessment Methodology for the Greater Golden Horseshoe. August 2020.
Watson & Associates Economists Ltd. PAGE 3
Bill 23 Client Response Letter Re Planning Matters - Nov 14 2022 Page 33
that the 1995 P.P.M.G. suggests that a simplified methodology can be used for smaller
or low -growth municipalities. It is further noted that the P.P.M.G. is meant to be used as
"best practices" and the guidelines are not mandatory. Under a consolidated Growth
Plan and P.P.S., consideration is required regarding the application of a standardized
L.N.A. methodology for all Ontario municipalities.
Addressina Urban Land Needs for Urban Settlement Areas
An important term used in the P.P.S. in the context of both urban land needs and
housing affordability is the Regional Market Area (R.M.A.). The R.M.A. is defined in the
P.P.S. and Growth Plan (with modifications) as follows:
"an area that has a high degree of social and economic interaction. The
upper- or single -tier municipality, or planning area, will normally serve as
the regional market area. However, where a regional market area extends
significantly beyond these boundaries, then the regional market area may
be based on the larger market area. Where regional market areas are
very large and sparsely populated, a smaller area, if defined in an official
plan, may be utilized."
With respect to urban residential land needs assessments, the broad objective of this
policy is to ensure the efficient and wise use of all designated urban lands, both
occupied and vacant, within the R.M.A. before expanding Urban Settlement Area
boundaries. Across southern Ontario municipalities, a key challenge with the
application of this policy is the mismatch of urban residential land needs at the urban
settlement area level within the defined R.M.A. geography.
If the R.M.A. definition is interpreted too rigidly, it can constrain urban residential
development within Urban Settlement Areas, and more broadly across entire
municipalities, where identified urban land surpluses have been determined elsewhere
within the R.M.A. Neither the P.P.S. nor the Growth Plan provide adequate direction for
addressing residential urban land supply and demand mismatches within the R.M.A.
Subsection 2.2.1.6 of the Growth Plan provides policy direction regarding Excess
Lands, which applies exclusively to Outer Ring G.G.H. municipalities. Under a
consolidated Growth Plan and P.P.S., a review of the R.M.A. and Excess Lands policies
would be required to determine an appropriate and standardized approach to
addressing localized urban residential land needs for Urban Settlement Areas and local
municipalities.
Residential Intensification Taraets and Minimum Densitv Reauirements
Subsection 2.2.7.2 of the Growth Plan provides direction with respect to minimum
greenfield density targets for G.G.H. upper -tier and single -tier municipalities. These
densities range between 40 and 50 people and jobs per gross hectare (ha). Minimum
density requirements are also prescribed in the Growth Plan for Strategic Growth Areas,
Watson & Associates Economists Ltd. PAGE 4
Bill 23 Client Response Letter Re Planning Matters - Nov 14 2022 Page 34
such as Urban Growth Centres and Major Transit Station Areas (M.T.S.A.$). The
P.P.S. does not prescribe minimum density targets for Ontario municipalities but does
require municipalities to establish density targets for areas adjacent, or in proximity, to
M.T.S.A.s and corridors.
Subsection 2.2.2.1 of the Growth Plan requires upper -tier and single -tier G.G.H.
municipalities to establish minimum intensification targets within delineated built-up
areas (B.U.A.$). These were established under the Growth Plan, 2006. The delineated
B.U.A.s within G.G.H. municipalities have remained unchanged since the Growth Plan
was established in 2006. The P.P.S. also requires municipalities to establish residential
intensification targets but does not prescribe minimum density targets for Ontario
municipalities. Furthermore, the P.P.S. does not require municipalities to delineate built
area boundaries in Official Plans; however, some Ontario municipalities outside the
G.G.H. have delineated built area boundaries for planning purposes. It is noted that the
delineation of built area boundaries may be subject to change or update for
municipalities outside the G.G.H., while B.U.A.s within the G.G.H. will remain fixed as of
2006. Under a consolidated Growth Plan and P.P.S., a standardized approach to
minimum density requirements and residential intensification targets would be required
for all Ontario municipalities.
Rural Housing
An identified area of the Growth Plan and P.P.S. review is to provide policy direction to
enable more residential development in Rural Areas. Rural Settlement Areas include
existing hamlets or similar existing small settlement areas that are established in Official
Plans. These communities are typically serviced by individual, private, on -site water
and/or private wastewater systems. Rural Settlement Areas provide clusters of
business operations that are essential to future economic growth. Infilling and minor
rounding out of existing residential and non-residential development within Rural
Settlement Areas is important to ensure that these areas remain vibrant, sustainable
and complete communities. Under a consolidated Growth Plan and P.P.S., enabling
more residential development in Rural Settlement Areas, and Rural Areas more broadly,
would need to be considered within the context of the existing provincial and local policy
frameworks, the land use hierarchy identified in Official Plans, the provision of servicing,
as well as the protection of natural heritage and agricultural lands.
Employment Area Conversion
An identified area of the Growth Plan and P.P.S. review is to provide policy direction to
streamline and simplify the conversion of Employment Areas to new residential and
mixed -use development, where appropriate. Employment Areas form a vital component
of a municipality's land use structure and represent an integral part of the local
economic development potential and competitiveness of municipalities. If not carefully
evaluated, the conversion of Employment Areas to non -employment uses can
potentially lead to negative impacts on the local economy in several ways. First,
Watson & Associates Economists Ltd. PAGE 5
Bill 23 Client Response Letter Re Planning Matters - Nov 14 2022 Page 35
Employment Area conversions can reduce employment opportunities, particularly in
export -based sectors, creating local imbalances between population and employment.
Second, Employment Area conversions can potentially erode employment land supply
and lead to further conversion pressure as a result of encroachment of non -employment
uses within, or adjacent to, Employment Areas. Finally, Employment Area conversions
can potentially fragment existing Employment Areas, undermining their functionality and
competitive position. Under a consolidated Growth Plan and P.P.S., policy direction
regarding the conversion of Employment Areas should emphasize principles and criteria
that examine both the quantity and quality of Employment Areas within the context of
the local and regional market attributes, as well as the planned urban function of the
subject conversion sites.
2031 Municipal Housing Targets
The Province has identified that an additional 1.5 million new housing units are required
to be built over the next decade to meet Ontario's current and forecast housing needs.
Furthermore, the Province has assigned municipal housing targets, identifying the
number of new housing units needed by 2031, impacting 29 of Ontario's largest and
many of the fastest growing single/lower tier municipalities. Key observations on the
Province's plan are as follows:
• The municipal housing targets for 2031 collectively account for 1,229,000 units,
representing about 82% of Ontario's overall 1.5 million new homes target.
• Of the 29 municipalities with housing targets identified, 25 are within the G.G.H.
and four are located in other areas of southwestern and southeastern Ontario.
• Within the G.G.H. municipalities, the municipal housing targets are generally
higher than approved housing forecasts. In non-G.G.H. municipalities, there is
generally less discrepancy between the approved housing forecasts and the
Province's targets. Having said that, the Municipal Housing Pledges are not
intended to replace current municipal Official Plans.
• The municipal housing targets are based on current and future housing needs. A
share of the overall housing need is attributed to a structural deficit in existing
housing inventories, while a portion of the housing need is linked to anticipated
population growth over the next decade.
• The housing targets are adapted from the housing needs assessment provided in
the "Ontario's Need for 1.5 Million More Homes" report, prepared by Smart
Prosperity Institute, dated August 2022.
• The impacted municipalities are being asked to prepare Municipal Housing
Pledges to meet these housing targets. These pledges must include details on
how the municipality will enable/support housing development through a range of
planning, development approvals and infrastructure related initiatives.
• These housing pledges are not intended to replace current municipal Official
Plans and are not expected to impact adopted municipal population or
employment projections.
Watson & Associates Economists Ltd. PAGE 6
Bill 23 Client Response Letter Re Planning Matters - Nov 14 2022 Page 36
While the municipal housing targets do not specify housing form, density, or
geographic location (e.g., greenfield, intensification), it is anticipated that any
needs beyond adopted housing forecasts will largely comprise rental and
affordable housing units primarily located within B.U.A.s, and to a lesser extent,
designated greenfield areas (D.G.A.$).
To develop effective local policies and programs to support the achievement of
the housing targets, it is recommended that municipalities assess their existing
and future housing needs through a local lens, building on the high-level
assessment provided by the Province.
Local housing needs should be considered within a broader growth management
framework, reflecting population, labour and employment/economic growth
potential, and addressed through a planning, economic, fiscal and housing
affordability lens.
Potential Changes to Inclusionary Zoning
Inclusionary zoning is a tool that can be used by municipalities to ensure the provision
of affordable housing. Ontario Regulation (O. Reg.) 232/18 implements inclusionary
zoning in Ontario. The proposed amendments to O. Reg 232/18 would:
Establish 5% as the upper limit on the number of affordable housing units; the
5% limit would be based on either the number of units or percentage share of
gross floor area of the total residential units; and
Establish a maximum period of twenty-five (25) years over which the affordable
housing units would be required to remain affordable.
While the proposed changes provide certainty with respect to affordable housing to be
provided under inclusionary zoning, they greatly limit a municipality's ability to tailor the
provision for affordable housing to the local market and for development feasibility
considerations identified through the required Inclusionary Zoning Assessment Report.
We will continue to monitor the legislative changes and advise as the Bill proceeds.
Yours very truly,
WATSON & ASSOCIATES ECONOMISTS LTD.
Jamie Cook, MCIP, RPP, PLE, Managing Partner
Gary Scandlan, BA, PLE, Managing Partner
Andrew Grunda, MBA, CPA, CMA, Principal
Peter Simcisko, BA (Hons), MBE, Managing Partner
Sean -Michael Stephen, MBA, Managing Partner
Jack Ammendolia, BES, PLE, Managing Partner
Watson & Associates Economists Ltd. PAGE 7
Bill 23 Client Response Letter Re Planning Matters - Nov 14 2022 Page 37
From: Chambers, Michelle
To: Chambers, Michelle
Subject: Assessment of Bill 23 (More Homes Built Faster Act) - Planning Act and Conservation Authorities Act
Date: November 18, 2022 10:00:23 AM
Attachments: imaae001.Dna
image002.g_ng
imaae003.Dna
Good afternoon:
In follow-up to our correspondence on October 31, 2022, we are continuing to provide
information on the proposed legislative changes arising from Bill 23, the More Homes
Built Faster Act, 2022.
As a firm, we are committed to keeping our clients up to date on these proposed
legislative changes and the anticipated impacts arising from the proposed Bill. We
will be sending out multiple letters that cover the following topics:
• Development Charges;
• Community Benefits Charges;
• Parkland Dedication;
• Conservation Authorities; and
• Planning Matters.
These letters will also be posted to our website in the Insights section under Opinions.
The attached letters provide further details with respect to the anticipated impacts
arising from the changes to the Planning Act and the Conservation Authorities Act.
If you have any questions regarding Bill 23, we would be pleased to discuss them
with you, at your convenience.
Best regards,
Andrew Grunda, MBA, CPA, CMA
Principal
rr ixs
Watson & Associates
Economists Ltd.
grundal-watsonecon.ca
Office: 905-272-3600 ext. 229
Mobile: 905-301-2523
Fax: 905-272-3602
watsonecon.ca
Disclaimer: This message is for the use of the intended recipient(s) only and may contain information that is privileged, proprietary,
confidential, and/or exempt from disclosure under any relevant privacy legislation. If you are not the intended recipient or authorized
agent thereof, you are hereby notified that any review, retransmission, dissemination, distribution, copying, conversion to hard copy,
taking of action in reliance on or other use of this communication is strictly prohibited. If you are not the intended recipient and have
received this message in error, please notify the sender by return e-mail and delete or destroy all copies of this message. Warning:
Although Watson & Associates Economists Ltd. has taken reasonable precautions to ensure no viruses are present in this email, the
Page 38
Watson
& Associates
ECONOMISTS LTD.
November 16, 2022
To Laurie Scott, MPP, Chair of the Standing Committee on Heritage,
Infrastructure, and Cultural Policy:
Re: Bill 23, More Homes Built Faster Act, 2022
Firstly, on behalf of Watson & Associates Economists Ltd. (Watson), we would like to
thank you for receiving our comments on the Province's proposed changes to the
Development Charges Act (D.C.A.), Planning Act, and Conservation Authorities Act, by
way of Bill 23, More Homes Built Faster Act. The following letter is submitted to the
Standing Committee on Heritage, Infrastructure, and Cultural Policy (the "Standing
Committee") to supplement the presentation by Gary Scandlan, Managing Partner, on
November 17, 2022.
Watson is one of Canada's leading economic consulting firms, comprising municipal
economists, planners, accountants, and support staff. The firm has been in operation
since 1982. Our work has involved many aspects of municipal finance and economics,
including assisting municipalities across the Province with development charges (D.C.$)
studies, community benefits charges (C.B.C.) studies, parkland dedication studies,
fiscal impact assessments, full cost user fee pricing models, demographic forecasts,
growth management studies, and more.
Watson appreciates that the lack of attainable housing is an important issue facing the
Province today. This letter, however, provides some commentary on how the Bill may
negatively impact the Province's goal to "increase housing supply and provide
attainable housing options for hardworking Ontarians and their families," along with the
financial burden this legislation will have on municipalities and existing homeowners.
Impact on Housing Supply
As stated by the Province, the goal is to create an additional 1.5 million new homes over
the next 10 years; however, the changes proposed in Bill 23 may actually limit the
supply of housing. For urban growth to occur, water and wastewater services must be
in place before building permits can be issued for housing. Most municipalities assume
the risk of constructing this infrastructure and wait for development to occur. Currently,
26% of municipalities providing water/wastewater services are carrying negative D.C.
reserve fund balances for these services['] and many others are carrying significant
P] Based on 2020 Financial Information Return data.
2233 Argentia Rd. Office: 905-272-3600 Y:\00 - MASTER TEMPLATES\Website Insights Opinions - uploads\Letter
Suite 301 1 Fax: 905-272-3602
to Standing Committee - November 17 2022.docx
Mississauga, Ontario www.watsonecon.ca
L5N 2X7 0
Page 39
growth -related debt. The following provides a list of the changes to the various pieces
of legislation and how they would negatively impact the supply of housing.
Development Charges Act
Mandatory Phase -in: The Bill proposes to phase -in the D.C. over the first five -
years of being in force. A review of various municipal D.C. by-laws indicates this
proposed phase -in will cause a reduction in the amount of D.C. revenue collected
by approximately 10% over the phase -in period. This loss in revenue will need to
be funded by existing taxpayers, thus subsidizing growth. With respect to water,
wastewater, and roads services, if the municipality does not have the ability to
fund this lost revenue, it may delay the timing of capital projects, which in turn,
will delay the availability of land for the construction of new homes. Additionally,
this phase -in would apply to non-residential development. It is unclear how this
would increase the housing supply. This matter is further compounded by the
loss of revenue due to the additional statutory exemptions discussed in section 2
of this letter.
Removal of Housing Services: Upper -tier and single -tier municipalities across
the Province utilize D.C.s to help fund the construction of new affordable housing
units with the goal of providing affordable housing to those in need. The removal
of housing services as a D.C.-eligible service will reduce municipalities'
participation in creating assisted/affordable housing units. Based on present
D.C. by-laws, over $2.2 billion in net growth -related expenditures providing for
over 47,000 affordable housing units (or 3.1 % of the Province's 1.5 million
housing target) would be impacted by this proposed change.
Removal of Studies from the Definition of Capital Costs: Studies, such as
Official Plans and Secondary Plans, are required to establish when, where, and
how a municipality will grow. Master Plans, environmental assessments and
other studies are required to understand the servicing needs development will
place on infrastructure such as water, wastewater, stormwater, and roads.
These studies are necessary to inform the servicing required to establish the
supply of lands for development; without these servicing studies, additional
development cannot proceed. Removing direct funding for these studies would
restrict/delay the supply of serviced land and would be counter to the Province's
intent to create additional housing units.
Planning Act
Removal of Planning Policy and Approval Responsibilities: Removal of
these policies and responsibilities from the Regions of Durham, Halton, Niagara,
Peel, Waterloo, and York, as well as the County of Simcoe (and potentially
others in the future) may result in disjointed planning policies and a lack of
coordination of Regional water and wastewater infrastructure. Lower -tier
municipalities may have significantly different goals which may lead to inefficient
Watson & Associates Economists Ltd. PAGE 2
Letter to Standing Committee - November 17 2022
Page 40
phasing/staging of development lands, less coordination of servicing plans, and
an increased administrative burden for both lower -tier and upper -tier
municipalities, as well as the Province.
2. Additional Financial Burden on Municipalities and Taxpayers
The proposed changes to the various Acts will have significant financial impacts on
Ontario's municipalities along with their respective taxpayers. It is anticipated that these
changes are in direct conflict with the principle that "growth pays for growth" and will put
additional pressure on property taxes and water and wastewater rates. This increase in
funding of growth -related needs from existing taxpayers and ratepayers will create
affordability issues for existing homeowners, thus transferring the financial burden of
home ownership, not reducing it. The following provides a summary of the proposed
changes and how they would increase the financial burden on municipalities and
existing taxpayers.
Development Charges Act
Additional Statutory Exemptions (also applies to C.B.C.s and Parkland
Dedication) and Discounts: The Bill provides for a number of statutory
exemptions for additional residential units, affordable housing, attainable
housing, non-profit housing, and affordable units through inclusionary zoning. In
addition, discounts for rental housing will be required.
o The definition of "affordable" is based on 80% of the market value,
whereas municipalities define "affordable" relative to income levels. This
broader definition will result in more housing units being eligible for D.C.
exemptions which do not meet municipal definitions of "affordable."
o The definition of "attainable" appears to be even more broad; however, no
details are provided on the proposed regulatory definition.
o These exemptions will result in a loss of D.C. revenue of approximately
10-15% that the municipalities will have to fund from other sources (i.e.,
property taxes or water/wastewater rates).
Mandatory Phase -in: As noted in section 1 above, this may result in a loss of
10% in D.C. revenues to municipalities.
Removal of Housing Services: As noted in section 1 above, based on present
D.C. by-laws in place, over $2.2 billion in net growth -related expenditures
providing for over 47,000 units (or 3.1 % of the Province's 1.5 million housing
target) would be impacted by this change.
Revised Definition of Capital Costs: The Bill proposes to remove the cost of
land for certain services (yet to be defined) and studies from the definition of
costs eligible for D.C.s.
o Land — Land represents a significant cost for some municipalities in the
purchase of property to provide services to new residents (e.g., water
Watson & Associates Economists Ltd. PAGE 3
Letter to Standing Committee - November 17 2022
Page 41
plants, new roads, etc.). This is a cost required due to growth and should
be funded by new development, if not dedicated by development directly.
o Studies — Master planning and Environmental Assessments are integral to
construction of hard infrastructure required to service new development.
Removing these costs from being D.C. eligible will shift the burden of
these growth -related costs to existing taxpayers and ratepayers.
Planning Act — Parkland Dedication
Reduction in Alternative Parkland Dedication Requirements: The alternative
dedication requirement where land is being conveyed of 1 hectare (ha) per 300
dwelling units would be reduced to 1 ha per 600 dwelling units. Where the
municipality imposes payment in lieu (P.I.L.) alternative requirements, the
amendments would reduce the amount from 1 ha per 500 dwelling units to 1 ha
per 1,000 net residential units. Municipalities already face challenges with the
supply of adequate parkland due to the rising cost of land and current limitations
under the Planning Act relative to municipal parkland standards. By cutting the
parkland dedication requirements in half, this will further reduce the
municipalities' ability to purchase parkland and will result in additional burden on
taxpayers to maintain municipal parkland standards or result in a reduction in the
level of parks service over time.
10-15% Cap on Land Area for Alternative Rate: The alternative requirement
would be capped at 10% of the land area or land value where the land proposed
for development or redevelopment is 5 ha or less; and 15% of the land area or
land value where the land proposed for development or redevelopment is greater
than 5 ha. These caps would significantly reduce parkland dedication,
particularly for high -density residential development and place the maximum
dedication levels equivalent to medium -density developments. Given that high -
density developments provide limited parklands on site, the contribution made
towards creating more land to service the land needs generated is significantly
under contributed. Again, these shortfalls will have to be funded by property
taxes if Council wishes to maintain municipal parkland standards for existing and
future residents.
3. Summary Commentary
The above summarizes our concerns with the proposed legislative changes and their
impact on the housing supply as well as their financial impact to municipalities and their
taxpayers. There are a number of other concerns with the proposed legislation that we
have outlined in our detailed responses provided in the attachments. These are as
appended as follows:
• Attachment 1 — Changes to the D.C.A.
• Attachment 2 — Changes to the Planning Act
Watson & Associates Economists Ltd. PAGE 4
Letter to Standing Committee - November 17 2022
Page 42
Attachment 3 — Changes to the Planning Act — Parkland Dedication
Attachment 4 — Changes to the Planning Act — Community Benefits Charges
Attachment 5 — Changes to the Conservation Authorities Act.
To conclude, while the goal of these proposed changes is to reduce the upfront cost to
a new home purchaser, the funding loss for this will come from the existing taxpayer,
i.e., existing residents and businesses subsidizing new home purchasers, hence
increasing housing affordability concerns.
Over the past 40 years, our firm has undertaken numerous fiscal impact studies of
residential development and, as a whole, the new taxes and fees generated by
residential growth do not equal the new operating costs required to support these
developments. As well, based on past changes to the D.C.A., historical reductions have
not resulted in a decrease in the price of housing, hence it is difficult to relate the loss of
needed infrastructure funding to affordable housing.
As a result, we would provide the following considerations for the Standing Committee:
1. From the proposed legislation, phase -in charges and exemptions for services
essential to creating developable land supply (water, wastewater, stormwater
and roads) should be removed ... or funded by grants from senior levels of
government.
2. Reduction in parkland contributions, caps for high -density development and
developer ability to provide encumbered lands/POPS should be removed from
parkland dedication legislation to continue to allow municipalities to determine
the appropriate level of service for parks.
3. Alternatively, to minimize the overall impact on the taxpayer and ratepayer,
provide access to other revenue sources (e.g., HST, land transfer tax) to fund all
D.C., parkland dedication, and C.B.C. revenue losses.
4. Municipal housing should continue as an eligible D.C. service.
Watson & Associates Economists Ltd. PAGE 5
Letter to Standing Committee - November 17 2022
Page 43
We again want to thank the Standing Committee for receiving our presentation and
correspondence and would appreciate the Committee's consideration of our concerns.
Yours very truly,
WATSON & ASSOCIATES ECONOMISTS LTD.
Andrew Grunda, MBA, CPA, CMA, Principal
Gary Scandlan, BA, PLE, Managing Partner
Jamie Cook, MCIP, RPP, PLE, Managing Partner
Peter Simcisko, BA (Hons), MBE, Managing Partner
Sean -Michael Stephen, MBA, Managing Partner
Jack Ammendolia, BES, PLE, Managing Partner
Watson & Associates Economists Ltd. PAGE 6
Letter to Standing Committee - November 17 2022
Page 44
Appendices
Page 45
Attachment 1 - Changes to the D.C.A.
Additional Residential Unit Exemption: The rules for these exemptions are now
provided in the D.C.A., rather than the regulations and are summarized as follows:
Exemption for residential units in existing rental residential buildings — For rental
residential buildings with four or more residential units, the greater of one unit or
1 % of the existing residential units will be exempt from D.C.
Exemption for additional residential units in existing and new residential buildings
— The following developments will be exempt from a D.C.:
o A second unit in a detached, semi-detached, or rowhouse if all buildings
and ancillary structures cumulatively contain no more than one residential
unit;
o A third unit in a detached, semi-detached, or rowhouse if no buildings or
ancillary structures contain any residential units; and
o One residential unit in a building or structure ancillary to a detached, semi-
detached, or rowhouse on a parcel of urban land, if the detached, semi-
detached, or rowhouse contains no more than two residential units and no
other buildings or ancillary structures contain any residential units.
Analysis/Commentary
For existing single-family homes, this change will not have an impact. For other
existing low/medium-density units and for all new units, however, this allowance
of a third additional unit that will be exempt from D.C.s adds a further revenue
loss burden to municipalities to finance infrastructure. This is of greatest concern
for water and wastewater services where each additional unit will require
additional capacity in water and wastewater treatment plants. This additional
exemption will cause a reduction in D.C.s and hence will require funding by water
and wastewater rates.
• Other services, such as transit and active transportation, will also be impacted as
increased density will create a greater need for these services, and without an
offsetting revenue to fund the capital needs, service levels provided may be
reduced in the future.
2. Removal of Housing as an Eligible D.C. Service: Housing services would be
removed as an eligible service. Municipalities with by-laws that include a charge for
housing services can no longer collect for this service once subsection 2 (2) of
Schedule 3 of the Bill comes into force.
Analysis/Commentary
The removal of housing services will reduce municipalities' participation in
creating assisted/affordable housing units and/or put further burden on municipal
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Page 46
taxpayers. This service seeks to construct municipal affordable housing for
growing communities. The removal of this service could reduce the number of
affordable units being constructed over the next ten years, if the municipalities
can no longer afford the construction. Based on present D.C. by-laws in place,
over $2.2 billion in net growth -related expenditures providing for over 47,000
additional units (or 3.1 % of the Province's 1.5 million housing target) would be
impacted by this change.
3. New Statutory Exemptions: Affordable units, attainable units, inclusionary zoning
units and non-profit housing developments will be exempt from the payment of D.C.s,
as follows:
• Affordable Rental Units: Where rent is no more than 80% of the average market
rent as defined by a new bulletin published by the Ministry of Municipal Affairs
and Housing.
• Affordable Owned Units: Where the price of the unit is no more than 80% of the
average purchase price as defined by a new bulletin published by the Ministry of
Municipal Affairs and Housing.
• Attainable Units: Excludes affordable units and rental units; will be defined as
prescribed development or class of development and sold to a person who is at
"arm's length" from the seller.
o Note: for affordable and attainable units, the municipality shall enter into
an agreement that ensures the unit remains affordable or attainable for 25
years.
Inclusionary Zoning Units: Affordable housing units required under inclusionary
zoning by-laws will be exempt from a D.C.
Non -Profit Housing: Non-profit housing units are exempt from D.C. instalment
payments due after this section comes into force.
Analysis/Commentary
• While this is an admirable goal to create additional affordable housing units,
further D.C. exemptions will continue to provide additional financial burdens on
municipalities to fund these exemptions without the financial participation of
senior levels of government.
• The definition of "attainable" is unclear, as this has not yet been defined in the
regulations.
• Municipalities will have to enter into agreements to ensure these units remain
affordable and attainable over a period of time which will increase the
administrative burden (and costs) on municipalities. These administrative
burdens will be cumbersome and will need to be monitored by both the upper -tier
and lower -tier municipalities.
• It is unclear whether the bulletin provided by the Province will be specific to each
municipality, each County/Region, or Province -wide. Due to the disparity in
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incomes across Ontario, affordability will vary significantly across these
jurisdictions. Even within an individual municipality, there can be disparity in the
average market rents and average market purchase prices.
4. Historical Level of Service: Currently, the increase in need for service is limited by
the average historical level of service calculated over the ten year period preceding
the preparation of the D.C. background study. This average will be extended to the
historical 15-year period.
Analysis/Commentary
For municipalities experiencing significant growth in recent years, this may
reduce the level of service cap, and the correspondingly D.C. recovery. For
many other municipalities seeking to save for new facilities, this may reduce their
overall recoveries and potentially delay construction.
This further limits municipalities in their ability to finance growth -related capital
expenditures where debt funding was recently issued. Given that municipalities
are also legislated to address asset management requirements, their ability to
incur further debt may be constrained.
5. Capital Costs: The definition of capital costs may be revised to prescribe services
for which land or an interest in land will be restricted. Additionally, costs of studies,
including the preparation of the D.C. background study, will no longer be an eligible
capital cost for D.C. funding.
Analysis/Commentary
• Land
o Land costs are proposed to be removed from the list of eligible costs for
certain services (to be prescribed later). Land represents a significant
cost for some municipalities in the purchase of property to provide
services to new residents. This is a cost required due to growth and
should be funded by new development, if not dedicated by development
directly.
Studies
o Studies, such as Official Plans and Secondary Plans, are required to
establish when, where, and how a municipality will grow. These growth -
related studies should remain funded by growth.
o Master Plans and environmental assessments are required to understand
the servicing needs development will place on hard infrastructure such as
water, wastewater, stormwater, and roads. These studies are necessary
to inform the servicing required to establish the supply of lands for
development; without these servicing studies, additional development
cannot proceed. This would restrict the supply of serviced land and would
be counter to the Province's intent to create additional housing units.
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6. Mandatory Phase -in of a D.C.: For all D.C. by-laws passed after June 1, 2022, the
charge must be phased -in annually over the first five years the by-law is in force, as
follows:
• Year 1 — 80% of the maximum charge;
• Year 2 — 85% of the maximum charge;
• Year 3 — 90% of the maximum charge;
• Year 4 — 95% of the maximum charge; and
• Year 5 to expiry — 100% of the maximum charge.
Note: for a D.C. by-law passed on or after June 1, 2022, the phase -in provisions would
only apply to D.C.s payable on or after the day subsection 5 (7) of Schedule 3 of the Bill
comes into force (i.e., no refunds are required for a D.C. payable between June 1, 2022
and the day the Bill receives Royal Assent). The phased -in charges also apply with
respect to the determination of the charges under section 26.2 of the Act (i.e., eligible
site plan and zoning by-law amendment applications).
Analysis/Commentary
• Water, wastewater, stormwater, and roads are essential services for creating
land supply for new homes. These expenditures are significant and must be
made in advance of growth. As a result, the municipality assumes the
investment in the infrastructure and then assumes risk that the economy will
remain buoyant enough to allow for the recovery of these costs in a timely
manner. Otherwise, these growth -related costs will directly impact the existing
rate payer.
• The mandatory phase -in will result in municipalities losing approximately 10% to
15% of revenues over the five-year phase -in period. For services such as water,
wastewater, stormwater, and to some extent roads, this will result in the
municipality having to fund this shortfall from other sources (i.e., taxes and rates).
This may result in: 1) the delay of construction of infrastructure that is required to
service new homes; and 2) a negative impact on the tax/rate payer who will have
to fund these D.C. revenue losses.
• Growth has increased in communities outside the Greater Toronto Area (G.T.A.)
(e.g. municipalities in the outer rim), requiring significant investments in water
and wastewater treatment services. Currently, there are several municipalities in
the process of negotiating with developing landowners to provide these treatment
services. For example, there are two municipalities within the outer rim (one is
10 km from the G.T.A. while the other is 50 km from the G.T.A.) imminently about
to enter into developer agreements and award tenders for the servicing of the
equivalent of 8,000 single detached units (or up to 20,000 high -density units).
This proposed change to the D.C.A. alone will stop the creation of those units
due to debt capacity issues and the significant financial impact placed on
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Letter to Standing Committee - November 17 2022
Page 49
ratepayers due to the D.C. funding loss. Given our work throughout the
Province, it is expected that there will be many municipalities in similar situations.
Based on 2020 Financial Information Return (F.I.R.) data, there are 214
municipalities with D.C. reserve funds. Of those, 130 provide water and
wastewater services and of those, 34 municipalities (or 26%) are carrying
negative water and wastewater reserve fund balances. As a result, it appears
many municipalities are already carrying significant burdens in investing in water/
wastewater infrastructure to create additional development lands. This proposed
change will worsen the problem and, in many cases, significantly delay or inhibit
the creation of serviced lands in the future.
Note that it is unclear how the phase -in provisions will affect amendments to
existing D.C. by-laws.
7. D.C. By-law Expiry: A D.C. by-law would expire ten years after the day it comes into
force. This extends the by-law's life from five years, currently. D.C. by-laws that
expire prior to subsection 6 (1) of the Bill coming into force would not be allowed to
extend the life of the by-law.
Analysis/Commentary
The extension of the life of the D.C. by-law would appear to not have an
immediate financial impact on municipalities. Due to the recent increases in
actual construction costs experienced by municipalities, however, the index used
to adjust the D.C. for inflation is not keeping adequate pace (e.g., the most recent
D.C. index has increased at 15% over the past year; however, municipalities are
experiencing 40%-60% increases in tender prices). As a result, amending the
present by-laws to update cost estimates for planned infrastructure would place
municipalities in a better financial position.
As a result of the above, delaying the updating of current D.C. by-laws for five
more years would reduce actual D.C. recoveries and place the municipalities at
risk of underfunding growth -related expenditures.
8. Instalment Payments: Non-profit housing development has been removed from the
instalment payment section of the Act (section 26.1), as these units are now exempt
from the payment of a D.C.
Analysis/Commentary
• This change is more administrative in nature due to the additional exemption for
non-profit housing units.
9. Rental Housing Discount: The D.C. payable for rental housing development will be
reduced based on the number of bedrooms in each unit as follows:
• Three or more bedrooms — 25% reduction;
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Two bedrooms — 20% reduction; and
All other bedroom quantities — 15% reduction.
Analysis/Commentary
Further discounts to D.C.s will place an additional financial burden on
municipalities to fund these reductions.
The discount for rental housing does not appear to have the same requirements
as the affordable and attainable exemptions to enter into an agreement for a
specified length of time. This means a developer may build a rental development
and convert the development (say to a condominium) in the future hence
avoiding the full D.C. payment for its increase in need for service.
10. Maximum Interest Rate for Instalments and Determination of Charge for
Eligible Site Plan and Zoning By-law Amendment Applications: No maximum
interest rate was previously prescribed. Under the proposed changes, the maximum
interest rate would be set at the average prime rate plus 1 %. How the average
prime rate is determined is further defined under section 9 of Schedule 3 of the Bill.
This maximum interest rate provision would apply to all instalment payments and
eligible site plan and zoning by-law amendment applications occurring after section
9 of Schedule 3 of the Bill comes into force.
Analysis/Commentary
Setting the maximum interest rate at 1 %+ the average prime rate appears
consistent with the current approach for some municipalities but is a potential
reduction for others.
It appears a municipality can select the adjustment date for which the average
prime rate would be calculated.
The proposed change will require municipalities to change their interest rate
policies, or amend their by-laws, as well as increase the administrative burden on
municipalities.
11. Requirement to Allocate Funds Received: Similar to the requirements for
community benefits charges, annually, beginning in 2023, municipalities will be
required to spend or allocate at least 60% of the monies in a reserve fund at the
beginning of the year for water, wastewater, and services related to a highway.
Other services may be prescribed by the regulation.
Analysis/Commentary
• This proposed change appears largely administrative and would not have a
financial impact on municipalities. This can be achieved as a schedule as part of
the annual capital budget process or can be included as one of the schedules
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Letter to Standing Committee - November 17 2022
Page 51
with the annual D.C. Treasurer Statement. This, however, will increase the
administrative burden on municipalities.
12.Amendments to Section 44 (Front -ending): This section has been updated to
include the new mandatory exemptions for affordable, attainable, and non-profit
housing, along with required affordable residential units under inclusionary zoning
by-laws.
Analysis/Commentary
• This change is administrative to align with the additional statutory exemptions.
13.Amendments to Section 60: Various amendments to this section were required to
align the earlier described changes.
Analysis/Commentary
• These changes are administrative in nature.
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Letter to Standing Committee - November 17 2022
Page 52
Attachment 2 - Changes to the Planning Act
The following summary of proposed key housing and planning related changes, along
with our firm's commentary, is provided below. It is noted that this commentary
specifically focuses on the impacts of Bill 23 regarding long-range planning and growth
management initiatives at the municipal level.
1. Streamlining Municipal Planning Responsibilities
Schedule 9 of the Bill proposes a number of amendments to the Planning Act.
Subsection 1 (1) of the Act is proposed to be amended to provide for two different
classes of upper -tier municipalities; those that have planning responsibilities and
those that do not. Changes are proposed to remove the planning policy and approval
responsibilities from the following upper -tier municipalities: Regions of Durham,
Halton, Niagara, Peel, Waterloo, and York, as well as the County of Simcoe. In
addition, the proposed changes could potentially be applied to additional upper -tier
municipalities in the future via regulation.
The proposed amendments under Schedule 9 of the Bill introduce numerous
questions related to the approach to ensuring effective leadership, management and
integration of regional and local land use planning across the affected jurisdictions.
In addition to providing a broad vision and planning direction with respect to the long-
term management of urban, rural and natural systems, upper -tier municipal planning
authorities also play a critical role regarding the coordination, phasing, and delivery of
water, wastewater and transportation infrastructure as well as other municipal
services. The Provincial Policy Statement, 2020 (P.P.S.) sets out specific
responsibilities for upper -tier municipalities, in consultation with lower -tier
municipalities, related to planning coordination, housing, economic development,
natural environment and municipal infrastructure. Furthermore, the P.P.S. directs
upper -tier municipal planning authorities to provide policy direction to lower -tier
municipalities on matters that cross municipal boundaries.
While the proposed amendment to the Bill aims to streamline the land use planning
process across the affected municipalities, it risks increasing complexity and
miscommunication while adding to the technical and administrative efforts of both
lower -tier and upper -tier municipalities, as well as the Province.
Furthermore, it would remove critical planning resources and knowledge at the
upper -tier level which are required when addressing matters that cross technical
disciplines and municipal jurisdictions. This would potentially result in disjointed
efforts and outcomes with respect to local planning approvals and regional municipal
service delivery.
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Page 53
2. Review of the Potential Integration of A Place to Grow and the Provincial Policy
Statement (P.P.S.)
The Ministry of Municipal Affairs and Housing is undertaking a housing -focused
policy review of A Place to Grow: the Growth Plan for the Greater Golden Horseshoe
(G.G.H.), 2019, as amended, hereinafter referred to as the Growth Plan, and the
P.P.S. The Province is reviewing the potential integration of the P.P.S. and the
Growth Plan into a new Province -wide planning policy framework that is intended to:
• Leverage housing -supportive policies of both policy documents, while removing
or streamlining policies that result in duplication, delays or burden the
development of housing;
• Ensure key growth management and planning tools are available to increase
housing supply and support a range and mix of housing options;
• Continue to protect the environment, cultural heritage, and public health and
safety; and
• Ensure that growth is supported with the appropriate amount and type of
community infrastructure.
Since the release of the Growth Plan in 2006 under the Places to Grow Act, 2005,
G.G.H. municipalities have been in a continuous cycle of developing and defending
growth management processes and Official Plan updates. Over the past several
years, all G.G.H. upper -tier, single -tier, and most lower -tier municipalities have
initiated the process of updating their respective Official Plans to bring these
documents into conformity with the Growth Plan. Within the G.G.H., this process is
referred to as a Municipal Comprehensive Review (M.C.R.). Many of these
municipalities have completed their draft M.C.R. analyses and draft Official Plan
updates for provincial approval, while several others are approaching completion.
The required technical analysis associated with the growth analysis and urban land
needs assessment component of the M.C.R. process is set out in the Provincial Land
Needs Assessment (L.N.A.) methodology, which is specific to G.G.H.
municipalities.['] The M.C.R. process has required tremendous time and effort on
behalf of municipalities, consulting agencies, stakeholder groups and involved
residents. The results of these efforts represent a key planning milestone for all
G.G.H. municipalities and provide a solid foundation to build on as it relates to future
growth management implementation, monitoring and benchmarking.
Ontario municipalities located outside the G.G.H. are also now in the process of
updating their respective Official Plans in accordance with the P.P.S. For
municipalities in these jurisdictions, this process is referred to as a Comprehensive
Review (C.R.). While there are potential benefits regarding the consolidation of the
I'] A Place to Grow: Growth Plan for the Greater Golden Horseshoe, Land Needs
Assessment Methodology for the Greater Golden Horseshoe. August 2020.
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Letter to Standing Committee - November 17 2022
Page 54
P.P.S. and the Growth Plan, as it relates to the M.C.R. and C.R. process, there are a
number of issues that should be considered regarding this effort, particularly as they
relate to long-term growth management and urban land needs, discussed below.
Long -Term Population and Employment Forecasts
Schedule 3 of the Growth Plan establishes minimum long-term population and
employment forecasts for upper -tier and single -tier municipalities in the G.G.H. to the
year 2051. The Ministry of Finance (M.O.F.) also establishes long-term population
forecasts for all Ontario Census Divisions (C.D.$), which typically represent upper -tier
municipalities, separated municipalities, and single -tier municipalities. The M.O.F.
forecasts are not recognized as official forecasts for planning purposes in Ontario;
however, they are updated annually and can be used to inform population forecasts
in Official Plans. Under a consolidated Growth Plan and P.P.S., consideration would
need to be given to the role and source of growth forecasts established by the
Province for all Ontario municipalities.
Provincial Land Needs Assessment Methodology Guidelines
As previously noted, the L.N.A. methodology for G.G.H. municipalities was updated
by the Province in 2020. In accordance with the Growth Plan, the L.N.A.
methodology provides a step-by-step approach to conducting growth forecasts and
urban land need assessments for upper -tier and single -tier municipalities for both
Community Areas (i.e., living areas) and Employment Areas. All other Ontario
municipalities rely on the 1995 Provincial Projection Methodology Guidelines
(P.P.M.G.) for guidance regarding the technical approach to growth forecasts and
urban land need assessments. It is noted that the 1995 P.P.M.G. suggests that a
simplified methodology can be used for smaller or low -growth municipalities. It is
further noted that the P.P.M.G. is meant to be used as "best practices" and the
guidelines are not mandatory. Under a consolidated Growth Plan and P.P.S.,
consideration is required regarding the application of a standardized L.N.A.
methodology for all Ontario municipalities.
Addressing Urban Land Needs for Urban Settlement Areas
An important term used in the P.P.S. in the context of both urban land needs and
housing affordability is the Regional Market Area (R.M.A.). The R.M.A. is defined in
the P.P.S. and Growth Plan (with modifications) as follows:
"an area that has a high degree of social and economic interaction. The
upper- or single -tier municipality, or planning area, will normally serve as
the regional market area. However, where a regional market area extends
significantly beyond these boundaries, then the regional market area may
be based on the larger market area. Where regional market areas are
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Letter to Standing Committee - November 17 2022
Page 55
very large and sparsely populated, a smaller area, if defined in an official
plan, may be utilized."
With respect to urban residential land needs assessments, the broad objective of this
policy is to ensure the efficient and wise use of all designated urban lands, both
occupied and vacant, within the R.M.A. before expanding Urban Settlement Area
boundaries. Across southern Ontario municipalities, a key challenge with the
application of this policy is the mismatch of urban residential land needs at the urban
settlement area level within the defined R.M.A. geography.
If the R.M.A. definition is interpreted too rigidly, it can constrain urban residential
development within Urban Settlement Areas, and more broadly across entire
municipalities, where identified urban land surpluses have been determined
elsewhere within the R.M.A. Neither the P.P.S. nor the Growth Plan provide
adequate direction for addressing residential urban land supply and demand
mismatches within the R.M.A. Subsection 2.2.1.6 of the Growth Plan provides policy
direction regarding Excess Lands, which applies exclusively to Outer Ring G.G.H.
municipalities. Under a consolidated Growth Plan and P.P.S., a review of the R.M.A.
and Excess Lands policies would be required to determine an appropriate and
standardized approach to addressing localized urban residential land needs for
Urban Settlement Areas and local municipalities.
Residential Intensification Targets and Minimum Density Requirements
Subsection 2.2.7.2 of the Growth Plan provides direction with respect to minimum
greenfield density targets for G.G.H. upper -tier and single -tier municipalities. These
densities range between 40 and 50 people and jobs per gross hectare (ha).
Minimum density requirements are also prescribed in the Growth Plan for Strategic
Growth Areas, such as Urban Growth Centres and Major Transit Station Areas
(M.T.S.A.$). The P.P.S. does not prescribe minimum density targets for Ontario
municipalities but does require municipalities to establish density targets for areas
adjacent, or in proximity, to M.T.S.A.s and corridors.
Subsection 2.2.2.1 of the Growth Plan requires upper -tier and single -tier G.G.H.
municipalities to establish minimum intensification targets within delineated built-up
areas (B.U.A.$). These were established under the Growth Plan, 2006. The
delineated B.U.A.s within G.G.H. municipalities have remained unchanged since the
Growth Plan was established in 2006. The P.P.S. also requires municipalities to
establish residential intensification targets but does not prescribe minimum density
targets for Ontario municipalities. Furthermore, the P.P.S. does not require
municipalities to delineate built area boundaries in Official Plans; however, some
Ontario municipalities outside the G.G.H. have delineated built area boundaries for
planning purposes. It is noted that the delineation of built area boundaries may be
subject to change or update for municipalities outside the G.G.H., while B.U.A.s
within the G.G.H. will remain fixed as of 2006. Under a consolidated Growth Plan
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Letter to Standing Committee - November 17 2022
Page 56
and P.P.S., a standardized approach to minimum density requirements and
residential intensification targets would be required for all Ontario municipalities.
Rural Housina
An identified area of the Growth Plan and P.P.S. review is to provide policy direction
to enable more residential development in Rural Areas. Rural Settlement Areas
include existing hamlets or similar existing small settlement areas that are
established in Official Plans. These communities are typically serviced by individual,
private, on -site water and/or private wastewater systems. Rural Settlement Areas
provide clusters of business operations that are essential to future economic growth.
Infilling and minor rounding out of existing residential and non-residential
development within Rural Settlement Areas is important to ensure that these areas
remain vibrant, sustainable and complete communities. Under a consolidated
Growth Plan and P.P.S., enabling more residential development in Rural Settlement
Areas, and Rural Areas more broadly, would need to be considered within the
context of the existing provincial and local policy frameworks, the land use hierarchy
identified in Official Plans, the provision of servicing, as well as the protection of
natural heritage and agricultural lands.
Emplovment Area Conversion
An identified area of the Growth Plan and P.P.S. review is to provide policy direction
to streamline and simplify the conversion of Employment Areas to new residential
and mixed -use development, where appropriate. Employment Areas form a vital
component of a municipality's land use structure and represent an integral part of the
local economic development potential and competitiveness of municipalities. If not
carefully evaluated, the conversion of Employment Areas to non -employment uses
can potentially lead to negative impacts on the local economy in several ways. First,
Employment Area conversions can reduce employment opportunities, particularly in
export -based sectors, creating local imbalances between population and
employment. Second, Employment Area conversions can potentially erode
employment land supply and lead to further conversion pressure as a result of
encroachment of non -employment uses within, or adjacent to, Employment Areas.
Finally, Employment Area conversions can potentially fragment existing Employment
Areas, undermining their functionality and competitive position. Under a consolidated
Growth Plan and P.P.S., policy direction regarding the conversion of Employment
Areas should emphasize principles and criteria that examine both the quantity and
quality of Employment Areas within the context of the local and regional market
attributes, as well as the planned urban function of the subject conversion sites.
3. 2031 Municipal Housing Targets
The Province has identified that an additional 1.5 million new housing units are
required to be built over the next decade to meet Ontario's current and forecast
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Letter to Standing Committee - November 17 2022
Page 57
housing needs. Furthermore, the Province has assigned municipal housing targets,
identifying the number of new housing units needed by 2031, impacting 29 of
Ontario's largest and many of the fastest growing single/lower tier municipalities. Key
observations on the Province's plan are as follows:
• The municipal housing targets for 2031 collectively account for 1,229,000 units,
representing about 82% of Ontario's overall 1.5 million new homes target.
• Of the 29 municipalities with housing targets identified, 25 are within the G.G.H.
and four are located in other areas of southwestern and southeastern Ontario.
• Within the G.G.H. municipalities, the municipal housing targets are generally
higher than approved housing forecasts. In non-G.G.H. municipalities, there is
generally less discrepancy between the approved housing forecasts and the
Province's targets. Having said that, the Municipal Housing Pledges are not
intended to replace current municipal Official Plans.
• The municipal housing targets are based on current and future housing needs. A
share of the overall housing need is attributed to a structural deficit in existing
housing inventories, while a portion of the housing need is linked to anticipated
population growth over the next decade.
• The housing targets are adapted from the housing needs assessment provided in
the "Ontario's Need for 1.5 Million More Homes" report, prepared by Smart
Prosperity Institute, dated August 2022.
• The impacted municipalities are being asked to prepare Municipal Housing
Pledges to meet these housing targets. These pledges must include details on
how the municipality will enable/support housing development through a range of
planning, development approvals and infrastructure related initiatives.
• These housing pledges are not intended to replace current municipal Official
Plans and are not expected to impact adopted municipal population or
employment projections.
• While the municipal housing targets do not specify housing form, density, or
geographic location (e.g., greenfield, intensification), it is anticipated that any
needs beyond adopted housing forecasts will largely comprise rental and
affordable housing units primarily located within B.U.A.s, and to a lesser extent,
designated greenfield areas (D.G.A.$).
• To develop effective local policies and programs to support the achievement of
the housing targets, it is recommended that municipalities assess their existing
and future housing needs through a local lens, building on the high-level
assessment provided by the Province.
• Local housing needs should be considered within a broader growth management
framework, reflecting population, labour and employment/economic growth
potential, and addressed through a planning, economic, fiscal and housing
affordability lens.
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Letter to Standing Committee - November 17 2022
Page 58
4. Potential Changes to Inclusionary Zoning
Inclusionary zoning is a tool that can be used by municipalities to ensure the
provision of affordable housing. Ontario Regulation (O. Reg.) 232/18 implements
inclusionary zoning in Ontario. The proposed amendments to O. Reg 232/18 would:
Establish 5% as the upper limit on the number of affordable housing units; the
5% limit would be based on either the number of units or percentage share of
gross floor area of the total residential units; and
Establish a maximum period of twenty-five (25) years over which the affordable
housing units would be required to remain affordable.
While the proposed changes provide certainty with respect to affordable housing to
be provided under inclusionary zoning, they greatly limit a municipality's ability to
tailor the provision for affordable housing to the local market and for development
feasibility considerations identified through the required Inclusionary Zoning
Assessment Report.
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Letter to Standing Committee - November 17 2022
Page 59
Attachment 3 - Changes to the Planning Act — Parkland
Dedication
1. New Statutory Exemptions: Affordable residential units, attainable residential units,
inclusionary zoning residential units, non-profit housing and additional residential unit
developments will be exempt from parkland dedication requirements. For affordable,
attainable, and inclusionary zoning residential units, the exemption is proposed to be
implemented by:
discounting the standard parkland dedication requirements (i.e., 5% of land)
based on the proportion of development excluding affordable, attainable and
inclusionary zoning residential units relative to the total residential units for the
development; or
where the alternative requirement is imposed, the affordable, attainable and
inclusionary zoning residential units would be excluded from the calculation.
For non-profit housing and additional residential units, a parkland dedication by-law
(i.e., a by-law passed under section 42 of the Planning Act) will not apply to these
types of development:
• Affordable Rental Unit: as defined under subsection 4.1 (2) of the D.C.A., where
rent is no more than 80% of the average market rent as defined by a new bulletin
published by the Ministry of Municipal Affairs and Housing.
• Affordable Owned Unit: as defined under subsection 4.1 (3) of the D.C.A., where
the price of the unit is no more than 80% of the average purchase price as
defined by a new bulletin published by the Ministry of Municipal Affairs and
Housing.
• Attainable Unit: as defined under subsection 4.1 (4) of the D.C.A., excludes
affordable units and rental units, will be defined as prescribed development or
class of development and sold to a person who is at "arm's length" from the
seller.
• Inclusionary Zoning Units: as described under subsection 4.3 (2) of the D.C.A.
• Non -Profit Housing: as defined under subsection 4.2 (1) of the D.C.A.
• Additional Residential Units, including:
o A second unit in a detached, semi-detached, or rowhouse if all buildings
and ancillary structures cumulatively contain no more than one residential
unit;
o A third unit in a detached, semi-detached, or rowhouse if no buildings or
ancillary structures contain any residential units; and
o One residential unit in a building or structure ancillary to a detached, semi-
detached, or rowhouse on a parcel of urban land, if the detached, semi-
detached, or rowhouse contains no more than two residential units and no
other buildings or ancillary structures contain any residential units.
Watson & Associates Economists Ltd. PAGE A-15
Letter to Standing Committee - November 17 2022
Page 60
Analysis/Commentary
While reducing municipal requirements for the conveyance of land or P.I.L. of
parkland may provide a further margin for builders to create additional affordable
housing units, the proposed parkland dedication exemptions will increase the
financial burdens on municipalities to fund these exemptions from property tax
sources (in the absence of any financial participation by senior levels of
government) or erode municipalities' planned level of parks service.
The definition of "attainable" is unclear, as this has not yet been defined in the
regulations to the D.C.A.
Under the proposed changes to the D.C.A, municipalities will have to enter into
agreements to ensure these units remain affordable and attainable over a period
of time, which will increase the administrative burden (and costs) on
municipalities. An agreement does not appear to be required for affordable/
attainable units exempt from parkland dedication. Assuming, however, that most
developments required to convey land or provide P.I.L. of parkland would also be
required to pay development charges, the units will be covered by the
agreements required under the D.C.A. As such, the Planning Act changes
should provide for P.I.L. requirements if the status of the development changes
during the period.
It is unclear whether the bulletin provided by the Province to determine if a
development is affordable will be specific to each municipality or aggregated by
County/Region or Province. Due to the disparity in incomes across Ontario,
affordability will vary significantly across these jurisdictions. Even within an
individual municipality there can be disparity in the average market rents and
average market purchase prices.
While the proposed exemptions for non-profit housing and additional residential
units may be easily applied for municipalities imposing the alternative
requirement, as these requirements are imposed on a per residential unit basis, it
is unclear at this time how a by-law requiring the standard provision of 5% of
residential land would be applied.
2. Determination of Parkland Dedication: Similar to the rules under the D.C.A., the
determination of parkland dedication for a building permit issued within two years of a
Site Plan and/or Zoning By-law Amendment approval would be subject to the
requirements in the by-law as at the date of planning application submission.
Analysis/Commentary
• If passed as currently drafted, these changes would not apply to site plan or
zoning by-law applications made before subsection 12 (6) of Schedule 9 of the
More Homes Built Faster Act comes into force.
• For applications made after the in -force date, this would represent a lag in P.I.L.
value provided to municipalities, as it would represent the respective land value
Watson & Associates Economists Ltd. PAGE A-16
Letter to Standing Committee - November 17 2022
Page 61
up to two years prior vs. current value at building permit issuance. For
municipalities having to purchase parkland, this will put additional funding
pressure on property tax funding sources to make up the difference, or further
erode the municipality's planned level of parks service.
3. Alternative Parkland Dedication Requirement: The following amendments are
proposed for the imposition of the alternative parkland dedication requirements:
The alternative requirement of 1 hectare (ha) per 300 dwelling units would be
reduced to 1 ha per 600 dwelling units where land is being conveyed. Where the
municipality imposes P.I.L. requirements, the amendments would reduce the
amount from 1 ha per 500 dwelling units to 1 ha per 1,000 net residential units.
Proposed amendments clarify that the alternative requirement would only be
calculated on the incremental units of development/redevelopment.
The alternative requirement would be capped at 10% of the land area or land
value where the land proposed for development or redevelopment is 5 ha or less;
and 15% of the land area or land value where the land proposed for development
or redevelopment is greater than 5 ha.
Analysis/Commentary
• If passed as currently drafted, the decrease in the alternative requirements for
land conveyed and P.I.L. would not apply to building permits issued before
subsection 12 (8) of Schedule 9 of the More Homes Built Faster Act comes into
force.
• Most municipal parkland dedication by-laws only imposed the alternative
requirements on incremental development. As such, the proposed amendments
for net residential units seek to clarify the matter where parkland dedication by-
laws are unclear.
• Section 42 previously imposed the alternative requirement caps of 10% and 15%
of land area or value, depending on the respective developable land area, for
developments only within designated transit -oriented communities. By repealing
subsection 42 (3.2) of the Planning Act, these caps would apply to all
developable lands under the by-law.
• As illustrated in the figure below, lowering the alternative parkland dedication
requirement and imposing caps based on the developable land area will place
significant downward pressure on the amount of parkland dedication provided to
municipalities, particularly those municipalities with significant amounts of high -
density development. For example:
o Low -density development of 20 units per net ha (uph), with a person per
unit (P.P.U.) occupancy of 3.4, would have produced a land conveyance
of 0.98 ha per 1,000 population. The proposed change would reduce this
to 0.74 ha, approximately 75% of current levels.
Watson & Associates Economists Ltd. PAGE A-17
Letter to Standing Committee - November 17 2022
Page 62
o Medium -density development of 50 uph, with a P.P.U. of 2.6 would
produce land conveyance at 50% of current levels (0.64 vs. 1.28 ha/1,000
population).
o Low-rise development of 150 uph, with a P.P.U. of 2.6 would produce land
conveyance at 20% of current levels (0.43 vs. 2.15 ha/1,000 population).
P.I.L. would be approximately 1/3 of current levels.
o High-rise development of 300 uph, with a P.P.U. of 2.6 would produce
land conveyance at 10% of current levels (0.22 vs. 2.15 ha/1,000
population). P.I.L. would be approximately 17% of current levels.[']
• Based on the proposed alternative requirement rates and land area caps,
municipalities would be better off:
o For land conveyance, imposing the alternative requirement for densities
greater than 30 units per ha.
■ Sites of 5 ha or less, land conveyance would be capped at 10% of
land area at densities greater than 60 units per ha.
■ Sites greater than 5 ha, land conveyance would be capped at 15%
of land area at densities greater than 90 units per ha.
o For P.I.L. of parkland, imposing the alternative requirement for densities
greater than 50 units per ha.
■ Sites of 5 ha or less, land conveyance would be capped at 10% of
land area at densities greater than 100 units per ha.
■ Sites greater than 5 ha, land conveyance would be capped at 15%
of land area at densities greater than 150 units per ha.
o For densities less than 30 units per ha, imposing the standard requirement
of 5% of land area for land conveyance and P.I.L. of parkland.
P] Low-rise and high-rise developments with sites larger than 5 ha would only be
marginally better under the proposed changes, at 30% and 15% of land conveyance
and 50% and 25% P.I.L., respectively.
Watson & Associates Economists Ltd. PAGE A-18
Letter to Standing Committee - November 17 2022
Page 63
Maximum Achievable Parkland Dedication (hectares per 1,000 population)
Development Sites e 5 hectares
High Density
Average PPU = 1.55
Medium Density
Average PPU = 2.60 1
Low Density
Average PPU = 3.40 {
300
units per ha Land"
PA.L.—
150
units per ha Land"
50
units per ha Land-
P.I.L.'
20
units per ha Land -
0.00 0.50 1.00 1.50 2.00 2.50
Hectares per 1.000 population
■ Max imum achievable parkland dedication based on Bill 23 proposed changes
❑AddWonat parkland dedicatlan achlevable under current Planning Act prnvlslans
Oe
' Using standard requirement (5% of land
area or land value)
" Using alternative requirement of 1 hectare
of land per 300 units-
- Using alternative P.I.L. requirement of 1
hectare per 500 units.
Watson & Associates Economists Ltd. PAGE A-19
Letter to Standing Committee - November 17 2022
Page 64
4. Parks Plan: The preparation of a publicly available parks plan as part of enabling an
Official Plan will be required at the time of passing a parkland dedication by-law
under section 42 of the Planning Act.
Analysis/Commentary
• The proposed change will still require municipal Official Plans to contain specific
policies dealing with the provision of land for parks or other public recreational
purposes where the alternative requirement is used.
• The requirement to prepare and consult on a parks plan prior to passing a by-law
under section 42 would now appear to equally apply to a by-law including the
standard parkland dedication requirements, as well as the alternative parkland
dedication requirements. This will result in an increase in the administrative
burden (and cost) for municipalities using the standard parkland dedication
requirements.
• Municipalities imposing the alternative requirement in a parkland dedication by-
law on September 18, 2020 had their by-law expire on September 18, 2022 as a
result of the COVID-19 Economic Recovery Act amendments. Many
municipalities recently undertook to pass a new parkland dedication by-law,
examining their needs for parkland and other recreational assets. Similar
transitional provisions for existing parkland dedication by-laws should be
provided with sufficient time granted to allow municipalities to prepare and
consult on the required parks plan.
5. Identification of Lands for Conveyance: Owners will be allowed to identify lands to
meet parkland conveyance requirements, within regulatory criteria. These lands may
include encumbered lands and privately owned public space (POPs). Municipalities
may enter into agreements with the owners of the land regarding POPs to enforce
conditions, and these agreements may be registered on title. The suitability of land
for parks and recreational purposes will be appealable to the Ontario Land Tribunal
(OLT).
Analysis/Commentary
• The proposed changes allow the owner of land to identify encumbered lands for
parkland dedication consistent with the provisions available to the Minister of
Infrastructure to order such lands within transit -oriented communities. Similar to
the expansion of parkland dedication caps, these changes would allow this to
occur for all developable lands under the by-law. The proposed changes go
further to allow for an interest in land, or POPs.
• The municipality may refuse the land identified for conveyance, providing notice
to the owner with such requirements as prescribed. The owner, however, may
appeal the decision to the OLT. The hearing would result in the Tribunal
determining if the lands identified are in accordance with the criteria prescribed.
These "criteria" are unclear, as they have not yet been defined in the regulations.
Watson & Associates Economists Ltd. PAGE A-20
Letter to Standing Committee - November 17 2022
Page 65
Many municipal parkland dedication by-laws do not except encumber lands or
POPs as suitable lands for parkland dedication. This is due, in part, to
municipalities' inability to control the lands being dedicated or that they are not
suitable to meet service levels for parks services. Municipalities that do accept
these types of lands for parkland or other recreational purposes have clearly
expressed such in their parkland dedication by-laws. The proposed changes
would appear to allow the developers of the land, and the Province within
prescribed criteria, to determine future parks service levels in municipalities in
place of municipal council intent.
6. Requirement to Allocate Funds Received: Similar to the requirements for C.B.C.s,
and proposed for the D.C.A. under Bill 23, annually beginning in 2023, municipalities
will be required to spend or allocate at least 60% of the monies in a reserve fund at
the beginning of the year.
Analysis/Commentary
This proposed change appears largely administrative, increasing the burden on
municipalities. This change would not have a fiscal impact and could be
achieved as a schedule to annual capital budget. Moreover, as the Province
may prescribe annual reporting, similar to the requirements under the D.C.A. and
for a C.B.0 under the Planning Act.
Watson & Associates Economists Ltd. PAGE A-21
Letter to Standing Committee - November 17 2022
Page 66
Attachment 4 - Changes to the Planning Act — Community
Benefits Charges
1. New Statutory Exemptions: Affordable residential units, attainable residential units,
and inclusionary zoning residential units will be exempt from the payment of C.B.C.s.,
with definitions provided as follows:
• Affordable Residential Units (Rented): Where rent is no more than 80% of the
average market rent as defined by a new bulletin published by the Ministry of
Municipal Affairs and Housing.
• Affordable Residential Units (Ownership): Where the price of the unit is no more
than 80% of the average purchase price as defined by a new bulletin published
by the Ministry of Municipal Affairs and Housing.
• Attainable Residential Units: Excludes affordable units and rental units; will be
defined as prescribed development or class of development and sold to a person
who is at "arm's length" from the seller.
• Inclusionary Zoning Units: Affordable housing units required under inclusionary
zoning by-laws.
The exemption is proposed to be implemented by applying a discount to the
maximum amount of the C.B.C. that can be imposed (i.e., 4% of land value, as
specified in section 37 of the Planning Act). For example, if the affordable,
attainable, and/or inclusionary zoning residential units represent 25% of the total
building floor area, then the maximum C.B.C. that could be imposed on the
development would be 3% of total land value (i.e., a reduction of 25% from the
maximum C.B.C. of 4% of land value).
Analysis/Commentary
While this is an admirable goal to create additional affordable housing units,
further C.B.C. exemptions will continue to provide additional financial burdens on
municipalities to fund these exemptions without the financial participation of
senior levels of government.
The definition of "attainable" is unclear, as this has not yet been defined in the
regulations.
Under the proposed changes to the D.C.A, municipalities will have to enter into
agreements to ensure that affordable units remain affordable for 25 years and
that attainable units are attainable at the time they are sold. An agreement does
not appear to be required for affordable/attainable residential units exempt from
payment of a C.B.C. Assuming, however, that most developments required to
pay a C.B.C. would also be paying development charges, the units will be
covered by the agreements required under the D.C.A. These agreements should
be allowed to include the C.B.C. so that if a municipality needs to enforce the
Watson & Associates Economists Ltd. PAGE A-22
Letter to Standing Committee - November 17 2022
Page 67
provisions of an agreement, both development charges and C.B.C.s could be
collected accordingly.
o These agreements will increase the administrative burden (and costs) on
municipalities. Furthermore, the administration of these agreements will
be cumbersome and will need to be monitored by both the upper -tier and
lower -tier municipalities.
It is unclear whether the bulletin provided by the Province will be specific to each
municipality, each County/Region, or Province -wide. Due to the disparity in
incomes across Ontario, affordability will vary significantly across these
jurisdictions. Even within an individual municipality, there can be disparity in the
average market rents and average market purchase prices.
Where municipalities are imposing the C.B.C. on a per dwelling unit basis, they
will need to ensure that the total C.B.C. being imposed for all eligible units is not
in excess of the incremental development calculation (e.g., as per the example
above, not greater than 3% of the total land value).
2. Limiting the Maximum C.B.C. in Proportion to Incremental Development: Where
development or redevelopment is occurring on a parcel of land with an existing
building or structure, the maximum C.B.C. that could be imposed would be calculated
based on the incremental development only. For example, if a building is being
expanded by 150,000 sq.ft. on a parcel of land with an existing 50,000 sq.ft. building,
then the maximum C.B.C. that could be imposed on the development would be 3% of
total land value (i.e., 150,000 sq.ft. / 200,000 sq.ft. = 75% x 4% maximum prescribed
rate = 3% of total land value).
Analysis/Commentary
With municipal C.B.C. by-laws imposing the C.B.C. based on the land total land
value or testing the C.B.C. payable relative to total land value, there will be a
reduction in revenues currently anticipated. At present, some municipal C.B.C.
by-laws have provisions excluding existing buildings from the land valuation used
to calculate the C.B.C. payable or to test the maximum charge that can be
imposed. As such, this proposal largely seeks to clarify the administration of the
charge.
Watson & Associates Economists Ltd. PAGE A-23
Letter to Standing Committee - November 17 2022
Page 68
Attachment 5 - Changes to the Conservation Authorities Act
1. Changes to conservation authority involvement in the development approvals
process
Programs and services that are prohibited within municipal and other
programs and services:
o Authorities would no longer be permitted to review and comment on a
proposal, application, or other matter made under a prescribed Act (if not
related to their mandatory programs and services under O. Reg. 686/21).
The Province proposes that a new regulation would prescribe the following
Acts in this regard:
■ The Aggregate Resources Act
■ The Condominium Act
■ The Drainage Act
■ The Endangered Species Act
■ The Environmental Assessment Act
■ The Environmental Protection Act
■ The Niagara Escarpment Planning and Development Act
■ The Ontario Heritage Act
■ The Ontario Water Resources Act
■ The Planning Act
Exemptions to requiting a permit under section 28 of the Conservation
Authorities Act
o Where development has been authorized under the Planning Act it will be
exempt from required permits to authorize the development under section
28 of the Conservation Authorities Act. Exemptions to permits would also
be granted where prescribed conditions are met.
o Regulation making authority would be provided to govern the exceptions
to section 28 permits, including prescribing municipalities to which the
exception applies, and any other conditions or restrictions that must be
satisfied.
• Shortened timeframe for decisions
o Applicants may appeal the failure of the authority to issue a permit to the
Ontario Land Tribunal within 90 days (shortened from 120 days currently).
Analysis/Commentary
These changes would focus an authority's role in plan review and commenting
on applications made under the above Acts (including the Planning Act) to the
risks of natural hazards only, limit the developments in which permits under
section 28 of the Conservation Authorities Act would be required, and shorten
timeframes for issuing permits. Authorities would no longer be able to review
applications with respect to the natural heritage impacts.
Watson & Associates Economists Ltd. PAGE A-24
Letter to Standing Committee - November 17 2022
Page 69
With respect to natural heritage review requirements, the Province is proposing
to integrate the Provincial Policy Statement, 2020 (P.P.S.) and A Place To Grow:
Growth Plan for the Greater Golden Horseshoe into a new Province -wide
planning policy instrument. It is proposed that this new instrument could include
changes to natural heritage policy direction.
Recent amendments to the Conservation Authorities Act have already been
implemented to limit a conservation authority to programs and services within
their core mandate unless they have entered into an agreement with a municipal
partner. Conservation authorities are able to efficiently provide services, such as
natural heritage review required under the P.P.S., to municipalities across their
watershed. Removing this ability from conservation authorities may result in
municipalities having to find other external sources with the expertise to
undertake this review, adding to the cost and timeframes for development
approvals and negatively impacting the Province's goal of creating more housing.
2. Minister's ability to freeze fees
• The Minister would have the ability to direct an authority to not change the
amount of any fee it charges (including for mandatory programs and services) for
a specified period of time.
Analysis/Commentary
Limiting the ability of conservation authorities to recover the costs of plan review
and permitting from benefiting developers and landowners will place additional
financial burdens on conservation authorities and municipalities to fund these
activities.
• As the goal of the Province is to create more housing, it is suggested that any
limitations to conservation authority fees that are implemented should only apply
to plan review and permitting fees related to the construction of new homes.
Watson & Associates Economists Ltd. PAGE A-25
Letter to Standing Committee - November 17 2022
Page 70
' irRRy l � t;A • f
SWatson
N-
• �i .sal iR _ti
'ONOMISTS LTD.
i
Presentation to the Standing
Committee on Heritage, Infrastructure
and Cultural Policy on Bill 23
Gary Scandlan, Managing Partner
November 17, 2022
Introduction
At the outset, we would like to thank the Committee for inviting
us to speak.
We are providing a high-level summary PowerPoint presentation
along with a detailed letter submission re Bill 23 as it relates to:
Development Charges (D.C.$)
Planning
Parkland Dedication (P.L.D.)
Community Benefits Charges (C.B.C.$)
Conservation Authorities (cost recovery and input to the planning
process).
This presentation will provide certain highlights for the
Committee's consideration.
Page 72
Background on Watson & Associates
Economists Ltd.
Watson & Associates Economists Ltd. is a firm of municipal economists,
planners and accountants which has been in operation since 1982. With a
municipal client base of more than 250 Ontario municipalities and utility
commissions, the firm is recognized as a leader in the municipal finance/local
government and land economics field.
Our background is unprecedented including:
Having undertaken over one-half of the consulting work completed in Ontario in the
D.C. field during the past decade;
Provided submissions and undertook discussions with the Province when the
Development Charges Act (D.C.A.) was first introduced in 1989 and with each
subsequent amendment undertaken in 1997, 2015 and 2019 (including being a
member of the Provincial Technical Working Group on the 2020 D.C. and C.B.C.
regulations;
Undertaken numerous studies that focus on growth management, population and
employment forecasting, urban land needs, municipal competitiveness, land use
planning policy and financial/economic impact analysis;
Our work also includes the preparation of asset management plans, P.L.D. reviews,
C.B.C.s and conservation authority fees and charges.
Page 73
1. Proposed Changes Which May Restrict/Inhibit /
the Future Supply of Developable Lands
Present Situation
For urban growth to occur, water and wastewater services must
be in place before building permits can be issued for housing.
Most municipalities assume the risk of constructing this
infrastructure and wait for development to occur.
Currently, 26% of municipalities providing water/wastewater
services are carrying negative D.C. reserve fund balances for
these services and many others are carrying significant growth -
related debt.
Where the total cost of infrastructure is unaffordable, or will
cause municipalities to exceed their debt capacity limit, many
municipalities enter into front -ending and pre -payment
agreements to share the cashflow and risk with developers.
Page 74
1. Proposed Changes Which May Restrict/Inhibit /
the Future Supply of Developable Lands (conc'a)
Bill 23 Impacts
In addition to the present situation, Bill 23 proposes to:
Phase -in any new by-laws over five years which, on average,
would reduce D.C. revenues by approximately 10%.
Introduce new exemptions which would provide a potential
loss of 10-15% of the D.C. funding.
Remove funding of water/wastewater master plans and
environmental assessments which provide for specific
planning and approval of infrastructure.
Unclear whether land costs for treatment facilities and/or for
the purchase of land for linear infrastructure will continue to
be an eligible capital cost.
Page 75
1. Proposed Changes Which May Restrict/Inhibit /
the Future Supply of Developable Lands (conc'a)
Bill 23 Impacts (ConYd)
Make changes to the Planning Act that would minimize upper -tier
planning in two-tier systems where the upper -tier municipality provides
water/ wastewater servicing. This disjointing between planning
approvals and timing/location of infrastructure construction may result
in inefficient servicing, further limiting the supply of serviced land.
The loss in funding noted above must then be passed on to
existing rate payers. This comes at a time when municipalities
must implement asset management plans under the Infrastructure
for Jobs and Prosperity Act to maintain existing infrastructure.
Significant annual rate increases may then limit funding to the
capital budget and hence delay servicing of additional
developable lands for housing.
Note that Stormwater and Roads are needed at a similar time to
support the creation of developable lands.
Page 76
2. Proposed Changes which will Impact the
Provision of Municipal Housing
The removal of housing service as an eligible service will
reduce municipalities' participation in creating assisted/
affordable housing units.
Based on present and in -place D.C. by-laws, over $2.2
billion in net growth -related expenditures providing for over
47,000 units (or 3.1 % of the Province's 1.5 million housing
target) would be impacted by this change.
Note that several municipalities who are not collecting for
the housing service are considering this service for their
updated background studies
Page 77
2. Proposed Changes which will Impact the e4o
Provision of Municipal Housing (conrd)
Housing Services For Region and Single Tier Municipalities
MunicipalityAdoption
Barrie
2019
DC for Single
Detached Unit -
As .
626
Net DC
Recoverable
Amount included - Net DC
DC Recoverable -
10.3 13.3
Number of New
539
Brantford
2021
6,665
37.2
42.6
476
Durham
2018
387
31.2
41.7
416
Guelph
2019
-
-
-
-
Halton
2021
986
50.1
57.3
400
Hamilton
2019
648
18.8
25.1
423
London
2019
-
-
-
Niagara
2022
2,039
60.0
60.0
372
Ottawa
2019
179
11.6
14.9
1,190
Peel
2019
3,265
200.5
258.1
521
Simcoe
2022
3,153
67.6
67.6
263
Toronto*
2022
8,603
1,477.0
1,477.0
40,000
Waterloo
2019
-
-
-
-
Windsor
2020
-
-
-
-
York
2022
1,608
181.2
181.2
2,569
Totals
2,239
47,200
*Total number of units - the net DC amount is after BTE
Page 78 7
3. Proposed Changes — Affordable Housing
vs. Housing Affordability
There are numerous changes which would reduce municipal revenue
recovery and shift the financial burden from development to the existing
taxpayer and ratepayer, as follows:
Added exemptions for affordable rental/owned residential units,
attainable residential units, inclusionary zoning residential units, non-
profit housing and additional units in existing homes provide a loss of
funding for all D.C. services as well as C.B.C.s and P.L.D. services.
D.C. phase -in, loss of study and land costs for new infrastructure,
municipal housing as an ineligible D.C. service, loss of C.B.C. revenue
and parkland contributions reduced by 50% or more (with 10-15%
caps) for higher -density developments.
Minister freeze on conservation authority fees: lowers funding for the
authority which increases costs passed on to existing taxpayers for
funding.
Page 79
3. Proposed Changes — Affordable Housing
vs. Housing Affordability (conra)
While the goal of these proposed changes is to reduce the upfront cost
to a new home purchaser, the funding for this will come from the
existing taxpayer, i.e., existing residents and businesses subsidizing
new home purchasers, hence increasing housing affordability
concerns.
Over the past 40 years, our firm has undertaken numerous fiscal
impact studies of residential development — as a whole, the new taxes
and fees generated by residential growth do not equal the new
operating cost required to support these developments.
Based on past changes to the D.C.A., historical reductions have not
resulted in a decrease in the price of housing; hence, it is difficult to
relate the loss of needed infrastructure funding to affordable housing.
4. Considerations for the Standing Committee �
From the proposed legislation, phase -in charges and exemptions for
services essential to creating developable land supply (water,
wastewater, stormwater and roads) should be removed ... or funded by
grants from senior levels of government.
Reductions in parkland contributions, caps for high -density
development and developer ability to provide encumbered lands/POPS
should be removed from P.L.D. legislation to continue to allow
municipalities to determine appropriate levels of service for parks.
Alternatively, to minimize the overall impact on the taxpayer and
ratepayer, provide access to other revenue sources (e.g., HST, land
transfer tax) to fund all D.C./P.L.D./C.B.C. revenue losses.
Municipal housing should continue as an eligible D.C. service.
Page 81
Thank you. Q
Page 82
Newcastle BIA MINUTES November 10th, 2022
www.villageofnewcastle.ca
Attendance: Angela Booth, Theresa Vanhaverbeke, Jane Black, Marni Lewis, Janeen
Calder, Valentine Lovekin, Lina Schmahl, Councillor Marg Zwart, Ann Harley
Regrets: Greg Lewis, Tracey Yates, Doug Sirrs, Councillor Granville Anderson
1. Meeting called to order at 9:06am
2. Approval of October minutes
Motion by: Jane Black Seconded by: Janeen Calder Carried
3. Business Arising from Minutes: A letter/email was sent to the Newcastle Hall Board
requesting a picture of the King be installed. They will be discussing it at their
meeting.
4. Treasurer's Report
The current bank balance is $$87,892.57.
A small committee met to go over the 2023 BIA Budget. It was decided that the levy
will remain at $40,000 and our budget goals will stay the same. It will be voted on at
the 2023 AGM.
5. Council Report
Congratulations to Councillor Zwart. There was lots of great community feedback
about her door to door campaigning AND doing it on her bike!!
6. Committee Reports
Safety and Decor:
We are waiting on a quote for the 2023 snow removal. The 100 year Community Hall
committee was very pleased to hear the BIA will be getting celebration banners, to
recognize the 100th Anniversary.Theresa will arrange with James Printing.
Advertising:
Top posts on Facebook:
Fixing the lights on the Community Hall 3700 reach
Setting up the Christmas lights 2538
Reached in the month 6600
Likes are up by 21
Angela has a quote for the website revamp for $1500-$2000. A Subcommittee will
meet on November 17th at 12noon upstairs in the Hall to review what changes are
needed.
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Special Events:
Harvest Festival
-The current committee will be looking for more volunteers to help with the early
planning and organizing in the Spring. If you are interested in being a part of the
committee, please reach out.
Community Hall Lighting
-A verbal `yes' that the roads will be closed
-Public Health has reached out regarding the food vendors attending
-The lights have been repaired on the Hall
-We will get a quote from Classic Displays (the company that hangs the Snowflake
lights) to see about maintaining and hanging the lights for next year. As well hanging
the events banners over the street.
Santa Breakfast
-Everything is confirmed, we are looking forward to a fun morning
Santa Parade
-Everything is going well
-They have 55 floats confirmed this year
Canada Day
-The Gift of Art is prepared to plan and run the 2023 Celebration
-a family themed day time event with kids games at Memorial Park
-Food and street dance in the evening prior to fireworks at the Diane Hamre Centre
6. CBOT
No report
7. Chamber
-A new board has been selected, Jim Norwood is the new President
8. CIP
-A meeting is coming up
9. New Business
-The Municipality would like to move the banner poles on Mill St to make room for a
multi -use path they are planning
-we will order a stand up BIA banner to use at events
-for Remembrance Day in 2023 will send out a pdf of a printable `lest we forget'
poster for businesses to hang in their windows
-we would like to use money in the budget to pay to have the events street banners
hung
Moved by: Theresa Vanhaverbeke Seconded by: Janeen Calder Carried
10. Motion to Adjourn:
Moved by: Jane Black Seconded: Marni Lewis Carried
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Solina Community Centre Board Meeting
November 9, 2022. 7:00 pm
Members Present - Ron and Bev Whitbread, Herb Tink, Chris
MacKenzie, Karen Dair and Jenny Bowman.
Regrets - BJ Baker, Joe Neal, Janice Jones
Guest - Ann MacDonald
Jenny welcomed our guest. Ann is interested in being involved
with the Solina Hall/ Park.
Jenny read the minutes of last meeting and hearing no errors or
omissions the minutes were approved as read. Motion by Karen
Dair and seconded by Herb Tink. Carried
Herb gave the Treasurers Report and a copy was given to each
member. After questions were answered the report was approved
by a motion from Bev Whitbread and seconded by Chris
MacKenzie. Carried
Herb made the motion to invest $20,000. After discussion it was
seconded by Chris MacKenzie. Carried
There were 22 hall rentals and the 4H group held 6 meetings
( kitchen/part of lower hall) in October/November.
Bartenders - The renters providing their own bartenders has
proven successful to date.
NEW BUSINESS
General Maintenance - painted outside and inside metal doors,
new taps for both kitchen sinks, Town removed dead trees and
limbs from trees in the Park, and lower floor carpets cleaned.
'�
Barn Quilt - the barn quilt was taken down for repairs. It may be
too close to the road so there was a discussion on where to put it
when repaired. Tabled until repairs completed.
The Park Board brought in all picnic tables and benches for the
winter. They also brought forward that the basketball back
board /net needs to be replaced. Chris will look into the best
price and quality of backboard. The ruts in the lawn are currently
being repaired by The Town.
Chris also brought forward the need for the north bleacher to be
repaired. After the meeting Jenny contacted Ken Mercer and he
will look into this and get back to BJ Baker or Chris MacKenzie.
The topic of fundraising was discussed and Chris and Ann will
look into possible events and volunteers to help with the events.
The hall board catered 2 small events this year.
We had a discussion on the need to develop a website.
Suggestions for content and who would design it were brought
forward. Ann and Chris will look into possible designers within
the community and see if they will volunteer their services.
Bev Whitbread updated out Solina Community Centre info
poster. The changes were approved after some corrections were
made on the information on poster.
Next Meeting - AGM February 21, 2022 Solina Community
Centre 6:30 pm
Motion to adjourn - Ron Whitbread
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