Minister Linda Jeffrey Speaks at BILD Event – But What Did She Really Say?

On September 20, 2013, a packed Vaughan ballroom filled with 400 BILD members listened with bated breath to the Minister of Municipal Affairs and Housing address pointed questions from a BILD/OHBA Panel on the Minister’s new planning and development round of consultations.  The questions revolved around Minister Jeffrey’s intention to look at: (1) revamping the OMB; and (2) a review of a myriad of charges levied against development sites including S.37 Planning Act payments, parkland levies and development charges.

The Minister said many conciliatory things in an attempt to give some comfort to the concerned builders in the audience.  “Stay brave and have a little faith.  We are not planning to do anything crazy and I have no desire to destabilize the industry.” 

No real indications from the Minister were given as to where the government would land on any of these key areas.  But certain hints here and there did not help the development industry get comfort that things would necessarily go well for our industry.  On the OMB issue, previous governments have steadfastly refused to open up a review of the OMB, notwithstanding the annual demands from most municipalities to do so, yet the Minister did indicate that when she was a Councillor in Brampton, “she was mystified by many OMB decisions.”  Minister Jeffrey did not elaborate on what decisions has mystified her but one can only imagine that she will seek to eliminate the mysteries when given the chance to do so after consultations.

Although Minister Jeffrey indicated that she did not want a complete revamp of the OMB but would only tinker with it, any tinkering that would result in the municipalities operating on a local reward system having greater ability to thwart development based on NIMBYIASM should be worrisome to the industry. 

On the topic of development charges, she was concerned about the revamp of the Development Charges Act in the late 1990′s which eliminated contributions to public facilities such as hospitals and forced municipalities to kick in 10% of the growth related items.  Again, not comforting words to an industry that has been overwhelmed by government levies, charges and fees over the last 20 years.

On the heels of this presentation, Ontario’s Environmental Commissioner, Gord Miller, suggested in his annual report on energy conservation that the province lift the cap on development charges to fund only 90% of capital costs of new transit services with the municipality kicking in the other 10% under current legislation.  He recommended that the 90% limit should be erased.  He was concerned that development charges can only be used to pay for maintaining existing transit service levels and not be used to fund increased service.  http://tiny.cc/y4p83w

Again, the answer becomes new home owners should not only pay for growth related services, but they should pay for expanded services that benefit everyone.

The Minister indicated that the review of all charges, not only development charges but all the other levies imposed on new homes is intended to result in a fair allocation of costs and responsibility.  The reality is developers should expect it will be unlikely that the burden on new homes will not ever be reduced in favour of spreading growth-related costs over the general population.  There may be some hope in moderating the parkland dedication fee which I believe the Minister acknowledged did not really work in high density situations. 

The last 9 or 10 years have been very tough ones for the industry with government regulation of the industry increasing at a rapid pace and the various charges being imposed on new housing escalating astronomically.  BILD data clearly indicates that most new homes bear taxes of one kind or another well in excess of $100,000.00 and this trend is not expected to change.

The industry will have to be extremely vigilant and pro-active in this round of consultations.  The OHBA and BILD have to put together committees to represent the views of the industry in these consultations.  At the end of the day, limiting growth through a weakened OMB or expanding the charges that can be imposed on new homes will only escalate new housing costs in the GTA to levels that are already beyond the reach of the average homeowner.