Carleton Place will not pursue a new provincial program that would require the town to significantly reduce development charges in exchange for infrastructure funding tied to housing development.
The issue was discussed during the June 9 committee of the whole meeting after Chief Administrative Officer Diane Smithson presented a report outlining the recently announced Development Charge Reduction Program, part of the Canada-Ontario Partnership to Build More Homes.
The program is intended to encourage housing construction by offering municipalities funding in exchange for lowering development charges, the fees paid by developers to help cover the cost of infrastructure needed to support growth.
Smithson explained that municipalities wishing to participate must commit to reducing development charges across all residential development types by at least 30 per cent and maintaining those reductions for three years.
“So on June 1 of this year, the Development Charge Reduction Program, which is an application-based program, was introduced to provide up to $8.8 billion in federal and provincial capital funding to enable Ontario municipalities to unlock more housing supply by providing partial relief to their builder community from development charges for a period of three years and prioritizing investments in housing-enabling infrastructure over 10 years,” Smithson told committee.
According to the report, funding would be distributed over a 10-year period, with municipalities required to contribute a minimum 10 per cent share toward approved projects. Eligible projects must be shovel-ready, with construction beginning before July 31, 2030, and completed by Oct. 31, 2035.
However, Smithson cautioned that participation comes with considerable uncertainty.
“The funding intake is a competitive process. Funding approval is not guaranteed,” she said. “The province reserves the right to deny any application regardless of whether all criteria have been met and to reduce or otherwise adjust the funding amount for approved applications.”
The report also noted that municipalities accepted into the program would be required to implement development charge reductions immediately after entering into a transfer payment agreement, regardless of whether a specific development application had been included in the original funding request.
Smithson said municipalities willing to offer larger reductions could improve their chances of receiving funding.
“Applications that provide for greater DC rate reductions, more than the 30 to 50 per cent, and higher municipal infrastructure project costs beyond the required 10 per cent contribution would be eligible to receive higher development charge funding to support more cost-shared municipal infrastructure projects,” she said.
She added that the program appears better suited to larger municipalities experiencing more substantial growth.
“Based on a review of all information readily available, the program is likely to favour municipalities with higher development charges and higher levels of growth, as the DC reductions will have a larger impact,” Smithson said.
Coun. Linda Seccaspina voiced concerns about the potential impact on local taxpayers if growth-related infrastructure costs shifted away from developers.
“I’m totally against this. There’s nothing in it for Carleton Place. Reducing or even eliminating development charges wouldn’t solve the housing crisis facing Ontario. If the lost revenue is not fully covered, municipalities are forced to either borrow heavily or pass the tax burden for new infrastructure onto existing property owners,” she said.
Coun. Jeff Atkinson agreed, arguing the program fails to address affordable housing needs.
“It’s an opportunity that’s just not there for us to take. In fact, Carleton Place is already doing one better than this program offers because we’ve already reduced our development charges for affordable housing. This program offers zero incentive,” Atkinson said.
Committee members ultimately agreed that participating in the Development Charge Reduction Program would not be in the town’s best interest.
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