Paul Shipway, Central Elgin’s Chief Administrative Officer and Clerk.
New housing policies introduced by Ontario Premier Doug Ford’s Progressive Conservative government are casting a chill over municipal finances in Central Elgin.
Ontario Bills 23 and 109 – directed at facilitating construction of 1.5 million new homes in Ontario by 2031 – “will transfer significant and long-term financial impacts of growth from developers and homebuilders to existing taxpayers and ratepayers of the Municipality,” according to an analysis prepared by Paul Shipway, Central Elgin’s Chief Administrative Officer and Clerk.
“If growth does not pay for growth, at the discretion of Council, then existing taxpayers and ratepayers will have to cover the rising costs of infrastructure and the cost of new infrastructure, which is an unsustainable solution,” added Shipway, in a report presented to Council at its meeting on December 12, 2022.
“Overall, based on currently available information, it is expected the Municipality may initially experience detrimental financial impacts of two to four percent on the tax levy annually,” Shipway’s report continues. A supplemental staff report will be done in January.
“Debt capacity limits and cash flows are also a concern, and the Municipality may not be able to finance future infrastructure needs before development revenues begin,” he said. “This will be especially true for the Municipality of Central Elgin, which relies on a residential assessment base of approximately 85 percent of the total assessment base, with minimal industrial assessment base.”
The Province introduced Bill 109 – the More Homes for Everyone Act – in March and it received Royal Assent in April. Bill 23 – the More Homes Built Faster Act – was introduced on October 25, 2022 and received Royal Assent on November 28, 2022.
“Although Bill 23 has potential for some positive outcomes,” said Shipway, “Bill 23 is overly focused on blanket fee reductions that would apply for market rate developments, with no demonstrable evidence, that savings will be passed on to renters and homebuyers.”
The bill freezes or reduces many development charges, and in some cases, exempts developers from paying fees that have traditionally gone to municipalities to pay for services like road and sewer infrastructure.
Rob Flack, the Progressive Conservative Member of Provincial Parliament for Elgin – Middlesex – London, has not responded to Aylmer Express inquiries about the housing policy changes.
Municipal Affairs and Housing Minister Steve Clark has stated that bold solutions are required to confront Ontario’s housing crisis. Clark has said in the Greater Toronto Area, for example, homebuyers may pay up to $116,900 in municipal development charges and fees when they buy new homes.
The Association of Municipalities of Ontario, however, said there’s no evidence that giving homebuilders a break on development charges will benefit home buyers. AMO forecasts the policy changes may pass an additional $5 billion in infrastructure costs on to taxpayers. Clark is hoping the federal government will pick up the tab for critical municipal infrastructure.
Locally, Shipway said Central Elgin will need to “diversify the assessment base, rapidly. Specifically with industrial assessment.” He suggested the municipality must also be more proactive and prompt in procurement administration to ensure efficiencies are found. Additionally, CE must “proactively seek funding from other levels of government,” he added.