The Minister of Municipal Affairs and Housing (MMAH), the Honourable Rob Flack, has sent a letter to OHBA regarding interest charges on frozen and deferred development charges (DCs). It is OHBA’s understanding that this letter has been sent directly to AMO, who has been directed to distribute it to heads of council of all DC-levying municipalities.
The following is a summary of key points from the Minister’s letter:
- Under existing provisions in the Development Charges Act, 1997, DCs continue to be frozen as of the date a site plan or zoning application is made.
- Municipalities retain authority to charge interest on frozen DCs up until building permit issuance, as these provisions were not amended by Bill 17.
- Bill 17 introduced a new requirement that DCs for non-rental residential developments be deferred to occupancy, at which point they are paid in full.
- Importantly, Bill 17 removed municipal authority to charge interest on all legislatively deferred DCs going forward.
- Any interest accrued on a deferred DC prior to November 3, 2025 remains payable.
- After November 3, 2025, municipalities may not charge any additional interest on deferred DCs.
- Developers continue to have the option to pay DCs earlier, at their own discretion, and no section 27 agreement is required to facilitate early payment.
These clarifications will be helpful in ensuring clarity and consistent interpretation across municipalities in supporting the implementation of the recent DC reforms coming out of Bill 17.
For reference, the Minster's Letter can be found here.
