BARRY’S BAY — Mayors in Madawaska Valley (MV) and Killaloe, Hagarty and Richards (KHR) are opposed to a new proposal for development charges (DC) being floated by the County of Renfrew.
Mayors Mark Willmer from MV and David Mayville of KHR, along with their respective councils are pushing back strongly to the county proposal that could see the price of a new single-family or semi-detached home in both communities increase by nearly $4,800.
Development charges primer
Development charges or fees, effectively a tax, are a tool that municipalities have used with increasing frequency to fund new infrastructure needed to accommodate growth.
The idea behind DC is that ‘growth pays for growth.’ New homeowners in a municipality pay the fees which helps build the necessary infrastructure – roads, water/sewer, schools, emergency services – that are needed to support the growth. Proponents will say DC put the burden of growth on new residents, not existing.
In theory, DC are temporary because they can only be collected for a certain period of time, typically 10 to 15 years, in a growing area. In reality, if a municipality continues to grow, DC can be collected in perpetuity.
Municipalities tend to raise DC over time meaning increasing costs to new homeowners and apartment building owners. In some larger cities, DC can add several tens of thousands to the cost of a single-family home.
Development charges are permitted under a provincial development charges act.
The Ontario government passed Bill 23 in late 2022. The bill amended the Development Charges Act to remove development charges for affordable and attainable housing, non-profit housing and housing that is constructed in areas of inclusionary zoning.
Earlier in September, the federal government announced Bill C-56 which would remove the GST on construction of new rental developments.
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