Ontario tells mayors municipal fees on new housing 'unsustainable and out of control'

An Ontario cabinet minister’s letter to big city mayors has sparked a war of words over controversial new housing legislation.

London Mayor Josh Morgan will meet with Ontario’s 28 other Big City Mayors to discuss the province’s new Building More Homes Faster Act, also known as Bill 23.

“This will be an item on our agenda, particularly the minister’s letter and our next steps and approach to it,” explains Morgan.

On Wednesday, Ontario’s Minister of Municipal Affairs and Housing Steve Clark sent a letter responding to criticism from the big city mayors.

Clark’s letter asserts, “our decision to reign (sic) in unsustainable and out-of-control municipal fees on new homebuyers is the right thing to do, and that is why our position on Bill 23 will not waver.”

Earlier this week the province passed Bill 23 to streamline the approval of new residential development and achieve its goal of 1.5 million new homes over the next decade.

However, critics warn that the act strips municipalities of powers that protect the environment and heritage, as well as reduces the amount of development charges collected on new construction.

London Mayor Josh Morgan rejects the minister’s description of municipal development charges as “unsustainable and out of control.”

“No, I don’t think that’s a proper reflection of the fees,” Morgan tells CTV News. “I can say our fees are calculated in a responsible way and they are very reflective of the infrastructure growth needs we have.”

Under a principle that growth pays for growth, development charges (DCs) cover the estimated cost to build additional municipal infrastructure like sewers, libraries, and fire stations to serve newly constructed neighbourhoods.

DCs do not earn money for the municipality, they are strictly based on cost recovery for past and future growth-based infrastructure.

In London, a report by civic administration estimates changes to the collection of development charges will cost London $97 million over five years.

The mayor is glad to see an assurance in the letter that municipalities will remain financially whole— but there are no details.

Although Minister Clark’s letter reveals, “we are taking immediate action to launch a third-party audit of select municipalities to get a factual understanding of their finances, including their reserve funds and development charge administration.”

“The minister and his staff are welcome to come down anytime to the City of London. Our books on how we fund and use development charges are completely open,” responds Morgan.

Clark’s letter also takes aim at municipal fees in an unnamed GTA city by stating they add $116,900 to the price of a new house.

In London, development charges on a single family home are $38,120.

Local grassroots demonstrations are also being organized.

On Friday, Dec. 9, a demonstration is planned in front of Western University’s UC Building.

“Our hashtag is Bill 23 is bulls—t,” explains Brendon Samuels, Sustainability Coordinator for the Society of Graduate Students at Western University.

Samuels says the demonstration will focus on the environmental impacts of the new act and the human impacts of downloading growth costs onto municipalities.

“We are either going to see increases in property taxes and with that increases in rent, or downgrades to municipal services and infrastructure work,” he explains.

Mayor Morgan will meet with other members of Ontario’s Big City Mayors on Friday, Dec. 2.