How are Municipalities Calculating Community Benefits Charges? A Case Study from the Town of Innisfil

Community benefits charges (“CBC”) are a new funding tool authorized under s. 37 of Ontario’s Planning Act (the “Act”) that allow municipalities to impose a charge against higher density development to pay for capital costs related to developments and redevelopments. CBCs can only be levied against mid- to high-density buildings that are five or more storeys and contain 10 or more residential units.

Municipalities can use CBCs to pay for “facilities, services and matters required because of development or redevelopment in the area to which the by-law applies.”[1] They can be used together with development charges and parkland and other public recreation amenities contributions by developers under s. 42 of the Act.

The maximum permitted CBC that can be levied against a development is 4% of the land value on the day before issuance of the building permit.[2] Some municipalities, including Brampton, Guelph, Halton Hills, Hamilton, Markham, Mississauga, and Newmarket (to name a few), opted to calculate the CBC rate by calculating 4% of the land value. [3] However, since the Act is silent on how the CBC rate is to be structured, other municipalities have chosen a different approach, based on a fixed per unit rate. The Town of Innisfil (“Innisfil”) and Pickering form part of the latter group.

Innisfil opted to include per unit rates following consultations with stakeholders in the development industry. The Town is currently planning to build a transit-oriented community for 90,000 residents, called the Orbit, that will be built around a proposed GO Station. Developers wanted certainty during the planning process. They wanted to be able to calculate the CBC rate during the planning stage, instead of having to obtain an appraisal before the building permit is issued.

On April 26, 2023, Council passed Innisfil’s CBC By-law. The By-law contained two methods for calculating the CBC rate. The standard approach was based on a per unit rate structure, based on defined geographies:

1. $1,200 per dwelling unit in the Orbit; and
2. $800 per dwelling unit outside the Orbit.

In the alternative to using the per unit rate structure, Innisfil reserved the right to undertake site specific appraisals if there was a reason to believe the charge per unit assumption would be understated. Innisfil retained the authority to calculate the amount of the CBC payable, at an amount equivalent to 4 % of the land value.

In June 2023, Innisfil’s CBC By-law was appealed. Following settlement negotiations, the parties agreed to change the By-law so that the per unit rate in the Orbit would increase gradually. The rate will start at $800 and increase to $900 when the Town issues the first Building Permit for the GO Station. When the GO Station becomes operational, the CBC rate will increase to $950. The CBC rate for developments located outside the Orbit remains at $800.

Another change to the By-law was related to timing. Developers wanted to know as early as possible when the Town would elect to use the per-unit rate or the 4% of the land value method. To tackle this issue, the By-law was amended to clarify that the Town would notify the applicants, in writing, of its election and the amount payable on or before the date upon which the Town (or the Ontario Land Tribunal) issues a Notice of Approval of Conditions (NOAC) or a Site Plan Approval.

On December 13, 2024, the Ontario Land Tribunal approved Innisfil’s amended CBC By-law.

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