What is the Community Benefits Charge?
Under Bill 108, the Community Benefits Charge is a new charge that will be in addition to development charges. It was designed to replace three existing municipal tools:
- Density bonusing under section 37 of the Planning Act;
- Parkland dedication under sections 42 and 51.1 of the Planning Act;
- Some DCs for discounted (soft) services under the Development Charges Act
What are the CBCs supposed to fund?
The Community Benefits Charge can only fund services not eligible to be included in a DC, and might include:
- Parkland acquisition
- Child care
- Municipal parking
- Social housing
- Airport
- Shelters
- Courts
- Animal Control
- Public art and other civic improvements currently funded by section 37.
On February 28th, the province released a proposed framework for this new CBC. Under this proposal, the province suggested that soft cost DCs would be removed from the CBC and placed back into the DC Act. In this proposal, it was also suggested that the 10% discount for DCs that is included in the existing DC Act would also be eliminated, meaning that builders and developers would have to pay full charge for the items included within the DC bylaws.
What will the Community Benefits Charge cost?
The Community Benefits Charge will be calculated as a percentage of land value. The current proposal for the regulation would allow for municipalities to charge a maximum amount of 15% total. This is split between lower-tier municipalities (10%) and upper-tier municipalities (5%).
The land value would be calculated on the day before the date the building permit is issued.
But what is this ACTUALLY going to cost?
Altus Group did some projections on what the CBC could actually cost under the current proposed regulation- based on a per single-detached basis.
Their projections are the combined impact of changes to the DCs & introduction of CBCs.
In Pickering, it could be a potential increase of $36,322 per single detached. The total amount paid in DCs and CBCs could be $103,579.
In Clarington, it could be a potential increase of $29,130 per single detached. The total amount paid in DCs and CBCs could be $94,417.
You can also calculate how the CBC and changes to development charges will impact your business specifically by using a calculator created by OHBA.
Download CBC Calculator
Download/View CBC Calculator Sample
Download/View Current DC Charges
Wait, won't the CBCs reduce the development charge?
Not necessarily. With the introduction of the Community Benefits Charge, there are also some changes to the development charge calculation. These changes include removing the 10% statutory deduction for soft services such as library, parks and recreation, etc. This could lead to an increase in development charges.
For example, if a municipality is currently charging $14,133 for parks and recreation for a single detached home, when the 10% deduction is removed, that charge increases to $15,703. Likewise, if the library charge is $1,003, removing the deduction would increase the charge to $1,103.
Lower cost items, such as municipal parking, will be removed, but that deduction would be less than the increase on other items, leading to an overall increase in the charge.
How are municipalities going to calculate the CBC?
Unknown at this time. Neither Bill 108 nor the regulation proposal provides for a methodology or imposes explicit rules on the calculation of a CBC - which the DC currently has.
Will the CBC be the same charge for all developments?
It doesn't have to be. A municipality can impose CBC rates that are different for different types of development - a lower rate for non-residential for example.
When will this come into effect?
Municipalities will be given one year from the date the regulations come into effect to implement their CBC charge and to amend their DC by-law.
The regulation could come into force by late spring or early summer.
What can I do to stop this?
The good news is that it is currently a proposed regulation, and it has not been finalized yet, so there is still time to let your voice be heard.
The deadline to submit comments is Monday, April 20.
All builders and developers are strongly encouraged to send an email to the ministry at john.ballantine@ontario.ca and cc DRHBA at s.hawkins@drhba.com.
OHBA has created a form email that you can use to start - please personalize it to make it have more of an impact.
Download the Form Letter
