Development charges are fees levied by municipalities on developers, homebuilders, and institutions when they undertake construction or development projects on land. These charges help municipalities cover the costs of additional municipal services and infrastructure necessitated by population growth from the new development. The funds can be allocated towards both ‘hard services’ like roads, waste management, and water, as well as ‘soft services’ like parks, libraries, and recreation centers.
Legislative Framework
Ontario introduced the Development Charge Act in 1989, with significant updates in 1997. This Act guides municipalities on the establishment of development charge by-laws. To establish a new by-law, municipalities must first conduct a background study. This study, which must be updated every five years, outlines projected population growth and the associated service and infrastructure needs. The Act also clarifies the specific services that can be funded by these charges.
Determining Population Growth and Charges
Background studies delve deep into projected growth, both residential and non-residential. They also look at future capital costs and service levels. It’s crucial for developers to understand a municipality’s charge calculation process. Typically, information on development charge by-laws and background studies can be accessed on the municipal website. The Ontario Municipal Board (OMB) sometimes gets involved in disputes over these studies.
Challenging the By-Law
There have been instances where municipalities’ calculation methods for development charges have been found inconsistent with the Act. The OMB can hear appeals against a by-law, provided they are filed within 40 days of its passage. For instance, in past cases like the one involving Orangeville and another with Clarington/Markham, the OMB ruled that the respective municipalities’ methods of calculating growth were not in line with the Act.
Addressing Incorrect Charges
Mistakes can happen in the determination of development charges. If developers believe they’ve been wrongly charged, they can raise a complaint with the municipal council within 90 days of the charge’s due date. The council is then obligated to hold a hearing where the complainant can present their case. If the council’s decision is still unsatisfactory, the decision can be appealed to the OMB within 40 days.