Up until now, developers have been able to input the costs of existing bonusing by-laws (i.e., development charges and parkland by-laws) into their pro forma when the amount has been finalized. However, these amounts have been dependant on individual ward councillors, whom have been given great amounts of discretion by their municipalities. The result has been varying amounts of charges and a degree of unpredictability, even for adjacent lots.
The new community benefit charges regime provides certainty to these exercises and the development process.
What Happened?
Ontario Regulation 509/20 (“O Reg 509/20) came into force under Ontario’s Planning Act on September 18, 2020 to support the implementation of community benefit charges (“CBCs”) under the new Section 37 of Ontario’s Planning Act, permitting local municipalities to impose CBCs against land to pay for the capital costs of facilities, services and matters incurred from development and the effective population growth.
CBCs are a charge in the development process that is distinct from development charges. This is an important addition to legislation for developers since no building can be constructed on the land proposed for development or redevelopment unless payment of the CBCs have been made.
Although there are limitations on the types of developments that are captured, the CBC is a sweeping tool that municipalities can use to fund almost any municipal service. A municipality is not prevented from imposing a CBC with respect to land for park or other public recreational purposes or with respect to the services listed in subsection 2 (4) of the Development Charges Act, 1997 (the “DCA”). However, a municipality cannot recover capital costs for the same service by way of both a CBC and development charge.
Municipalities do not have to implement a CBC by-law right away - the existing Section 37 remains in effect until the earlier of when the municipality passes a CBC by-law or September 18, 2022.
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