Ontario's Bill 23 could cost Region of Waterloo $530 million: regional staff

Region of Waterloo staff say sweeping new provincial housing legislation will cost the region and its seven municipalities an estimated $530 million over the next 10 years, and taxpayers could be on the hook to make up the difference.

The Ontario government passed Bill 23, or the “More Homes Built Faster Act” Monday.

The legislation, which overrides some municipal zoning laws and reduces – or in some cases eliminates – development charges, is part of the Ford government’s plan to build 1.5 million homes by 2031.

But critics of the bill say it will leave Ontario's municipalities short billions of dollars by drastically reducing the fees they collect from developers.

Those fees pay for things like roads, sewers, transit, libraries and other city services and infrastructure.

“My concern is, of course, the impact this is going to have on our financials,” Waterloo Mayor Dorothy McCabe told CTV News.

“We’re looking at, over the course of five years, potentially losing anywhere between $23 million to $31 million.”

Staff at the City of Cambridge estimate the value of the lost development charges at $18 million over a five year period.

Meanwhile, in Kitchener the cost is an estimated at $40 million over 10 years.

Local politicians say that means the cost of things like roads, sewers and parks that used to be covered by development charges could now be put on property owners.

“When people buy a home, they want to be able to turn a tap on, they want to be able to flush the toilet, they want roads outside their homes, these are all services municipalities provide,” Waterloo regional chair Karen Redman said.

“We know that we are going to have to supply those, and it shouldn’t be done on the back of homeowners.”

McCabe says it could lead to some very difficult conversations.

“We are going to have to have those trade-offs, and that’s going to be a very difficult conversation. What we may have to start looking at not being able to fund is important things like recreation, facilities, or parkland,” she said.

Many in the planning community are confused by the bill.

Mark Seasons, a professor in the University of Waterloo School of Planning calls it “perplexing” and says it runs counter to conventional and best practice in urban and regional planning.

“There is no conclusive evidence I have seen so far that development charges are the sole negative impact on the affordability issue,” Season said.

In fact, he says he’s not convinced Bill 23 will get any homes built faster and suggests the rationale behind the legislation may lay elsewhere.

“It may reflect a view of political perspective. There may be reasons that are opaque to me. The rationale for this is not really clear,” he said.

Meanwhile, Redman says the province has agreed to further consultation on Bill 23, and she’s hopeful an agreement can be reached that won’t leave municipalities and taxpayers holding the bag.