Municipal property taxes are expected to increase as a result of new provincial legislation pushing for the construction of more homes in Ontario.
Bill 23, the More Homes, Build Faster Act, will force municipalities to slash certain fees such as development charges. The impact in Greater Sudbury will be approximately $7.5 million over the next five years, according to a city spokesperson.
By reducing these fees, municipal costs associated with new developments will shift from developers to existing taxpayers and/or water/wastewater ratepayers.
That is, “unless the province offers an alternative funding source or city council decides to change the timing or pace of capital investments,” according to the city.
There are ongoing talks with the province to help mitigate impacts to municipalities, Mayor Paul Lefebvre told Sudbury.com, noting that development charges are necessary and in keeping with the city’s policy that growth pays for growth.
“Without development charges, cities would be going bankrupt very quickly,” he said, adding that somebody has to pay for municipal infrastructure required for new builds.
“I’m looking forward to having those conversations with the province,” he said. “We know that we have very extensive infrastructure already, and aging infrastructure, so that’s why for us we have to take a really deep dive on how we move forward with it.”
Bill 23 received royal assent on Nov. 28, though Lefebvre said it will have either no or minimal impact on the city’s already difficult 2023 budget deliberations. Its impacts are anticipated in subsequent years’ budgets.
To Greater Sudbury’s benefit, much of what is included in Bill 23 has already been adopted by the municipality, whose full adherence will require only “minor tweaking,” city planning services director Kris Longston told Sudbury.com in late October.
“There are some minor adjustments we’ll have to make to our zoning bylaw, to our development charge bylaw, but principally we’re already doing a lot of the things being contemplated in this bill,” he said at the time.
Although some elements of Bill 23 are “progressive and positive,” a city spokesperson said it excludes certain studies and infrastructure costs it deems ineligible for development charge funding.
“Our policies generally already reflect many of the changes described in Bill 23, so financial impacts may be lower here than in other communities.”
Ward 9 Coun. Deb McIntosh has served as vice-chair of the city’s finance and administration committee for the past eight years. She told Sudbury.com the bill “blindsided” municipalities across the province.
“We didn’t know it was coming and it’s coming right during a budget, right around an election,” she said, referencing the Oct. 24 municipal election and 2023 budget deliberations city council has been inching toward and city administrators are already in the thick of.
“Its timing is awful for municipalities, and really unfair, frankly.”
With its greatest impacts coming after 2023, she said there will be time to adjust to Bill 23, but it will still be a challenge.
“The money still has to come from somewhere to do things, so it ends up going on the levy,” she said, adding that without any mitigating efforts, the existing tax base would end up taking a hit.
Although she said the city has put several measures in place to eliminate barriers to development, more funding from senior levels of government is needed to spur construction of more affordable housing.
“I agree with the province – we want to build more housing in Sudbury, too; it’s an economic driver,” Lefebvre said of the motivation behind Bill 23. “We’ve got to make it clear that the city doesn’t build housing, we issue permits.”
The mayor said he wants to see the city improve its permitting process to ensure it’s “faster, more efficient and more welcoming” so Greater Sudbury meets his goal of hitting a population of 200,000 within 20 years.
“We’ve got jobs, and if we’ve got proper housing they’ll come here,” he said. “It won’t happen overnight.”
Tyler Clarke covers city hall and political affairs for Sudbury.com.