Despite previous concerns about reducing development charges, Perth is moving ahead with an application to a new federal-provincial funding program that could see those fees cut in half, but only if the town receives financial support to offset the loss.
At its June 9 committee of the whole meeting, council unanimously approved a recommendation directing staff to apply to Ontario’s new Development Charge Reduction Program, which is designed to encourage housing construction by incentivizing municipalities to lower development charges.
The program, announced this spring through the Canada-Ontario Partnership to Build initiative, offers municipalities access to a share of up to $8.8 billion in funding for housing-related infrastructure projects over the next 10 years. To qualify, municipalities must agree to reduce development charges by between 30 and 50 per cent for at least three years.
Perth’s application will include all growth-related projects identified in its development charge study through 2035, including a second water tower north of Highway 7, an arterial road, infrastructure beneath Hwy. 7, portions of a future recreation facility and potentially a new environmental services shop.
However, council made it clear that Perth is not committing to lower development charges unless funding is approved.
“The idea, through the chair, is that we apply for the program first, and if we’re successful, then we reduce development charges,” CAO Michael Touw explained. “If, like many other grant programs, we’re not successful, then we just carry on.”
That reassurance appeared to address concerns raised by members of council about the financial impact of reducing a key source of growth-related revenue.
Coun. Isabel McRae sought clarification on whether grant funding would replace revenue lost through lower development charges. Touw said the intent of the program is to provide municipalities with funding for housing-supporting infrastructure in exchange for reducing those charges.
Coun. David Bird expressed support for applying broadly rather than targeting a single project, while Treasurer Nev Jande noted that any reduction would be temporary. Under the proposal, development charges would be reduced by 50 per cent for five years before returning to their current levels.
The motion directs staff to proceed with the funding application immediately. If Perth is successful, council will be asked to pass a bylaw implementing the 50 per cent reduction in the town’s development charges. If the funding request is rejected, Perth’s current development charge rates will remain unchanged.
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