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Ontario revisits development charges and parkland dedication with Bill 197

Author(s): Chris Barnett

Jul 13, 2020

The provincial government has introduced Bill 197, the COVID-19 Economic Recovery Act, 2020, which proposes changes to multiple statutes as part of the government’s efforts to stimulate the economy. The government clearly sees the development and construction industry as key to its economic recovery strategy. 

Bill 197 revisits the issue of the costs associated with development. The government had proposed sweeping changes to the development charges and parkland dedication regime when it passed Bill 108 in 2019 but had not brought those changes into force. Many of the changes from Bill 108 are now proposed to be rolled back.

Parkland dedication

  • Alternative rates of up to one hectare for 300 units for land or up to one hectare for 500 units for cash in lieu will continue to be permitted.
  • Before passing an alternate rate bylaw, there must be public consultation.
  • Alternative rate bylaws can be appealed to the Local Planning Appeal Tribunal (LPAT).
  • Existing bylaws will expire two years after these changes come into force.

Bill 108 had taken away the ability of municipalities to establish a rate of up to one hectare for 300 units for land dedication or one hectare for 500 units for cash in lieu, with the costs of parkland intended to be rolled into a new Community Benefit Charge (CBC) bylaw. All of those changes are now proposed to be repealed.

Development charges (DCs)

  • Development charges will be permitted to only include the following:
    • Hard services (sewer, water, storm water, roads, electricity)
    • Transit
    • Waste diversion
    • Police, fire and ambulance services
    • Libraries (including circulation materials)
    • Long-term care
    • Parks and recreation (but not land acquisition costs)
    • Public health
    • Child care*
    • Housing services*
    • Bylaw enforcement and court services*
    • Emergency preparedness*
      *new items that were not previously expressly DC eligible
  • Existing DC bylaws that include services not listed above can remain in force for up to two years.

Community Benefit Charges (CBCs)

  • The current section 37 agreement process will be revoked and replaced by the CBC process. Existing s. 37 agreements will be transitioned.
  • CBCs may be charged for any development that is 10 or more units in a building or five or more storeys. Any other development will be exempt from CBCs.
  • There will be a cap on the amount that can be charged that will be tied to the percentage of valuation of the land to be developed. The exact percentage has not been announced.
  • A CBC bylaw can include parkland costs as well as the capital costs associated with DC-eligible items, but there is no “double dipping” — costs can only be collected once through parkland dedication/bylaws, a DC bylaw or a CBC bylaw.
  • In-kind contributions will be permitted for facilities or services in a CBC bylaw and the value of those services would be deducted from what is owed.
  • A CBC strategy and consultation are required before a bylaw can be passed.
  • A CBC bylaw can be appealed to the LPAT.
  • CBCs can be paid under protest if the owner believes the percentage cap has been exceeded, with a process for resolving land valuation involving appraisals being prepared.
  • Reports will be required to ensure transparency with respect to the money received through CBCs.

New ministerial powers

New powers are proposed to be granted to the Minister related to site plan control. If the Minister exercises these powers, then a landowner can be required to enter into a site plan agreement and the Minister can even specify how site plan matters are to be dealt with in the agreement. Any agreement that does not comply with a ministerial direction will be of no effect.

The Minister also is proposed to be given the power to require that affordable housing be provided as part of any development.

These powers are proposed to be in the same section of the Planning Act as ministerial zoning orders. While it is not apparent from the proposed changes to the Act, press releases and media interviews from the province have made clear that these powers are intended to be used in conjunction with the Building Transit Faster Act, 2020, which was given Royal Assent on July 8. Bill 197 also proposes to enact the Transit Oriented Communities Act, 2020, which would give the province the power to designate lands as a transit-oriented community and would permit the province to make investments supporting priority transit projects. The priority transit projects identified to date are the Ontario Line, Scarborough Subway Extension, Yonge North Subway Extension, and the Eglinton Crosstown West Extension.

The proposed new ministerial powers would give the province the ability to both zone and implement site plan agreements for transit supportive developments, should that be necessary in order to ensure projects are built.

DC Act Bill 197 - Blackline

Planning Act Bill 197 first reading extracts - Blackline