Municipalities impose community benefits charges

November 2, 2022 | Thomas Sanderson, Justin McLarty, Jesse White, Safa Bajwa

Municipalities impose community benefits charges

In the summer and fall of 2022, several Ontario municipalities have passed by-laws imposing Community Benefits Charges (“CBCs”) on new developments to pay for development-related capital costs under section 37 of the Planning Act. More CBC by-laws will follow: as of September 18, 2022, the old section 37 regime of exchanging public benefits for additional height or density ceased to apply to new developments.

Miller Thomson’s article of October 6, 2020 addressed the nature of CBCs and their relationship with the amended development charges and parkland dedication regimes. A new series of articles will survey the features and challenges of the CBC by-laws enacted to date.

Select by-laws enacted to date

The CBC by-laws enacted to date include those of the following municipalities:

  • the City of Mississauga (effective June 23, 2022);
  • the City of Toronto (effective August 15, 2022);
  • the City of St. Catharines (effective September 1, 2022);
  • the Town of Oakville (effective September 7, 2022);
  • the City of Brampton (effective September 12, 2022);
  • the City of Waterloo (effective September 26, 2022);
  • the City of Hamilton (effective September 18, 2022); and
  • the City of Burlington (effective September 14, 2022).

Of the above by-laws, most simply apply the maximum provincial rate – presently 4 percent of land value – to developments throughout the municipality. Importantly for mixed-use developments, most existing CBC by-laws restrict the calculation to only those lands or floor areas which actually form part of the section 37 development. The newly announced Bill 23 (More Homes Built Faster Act, 2022) plans an amendment to section 37 along those lines, so that the maximum percentage of land value does not apply to the entire property, but only in proportion to the floor area involved in the development.

Geographic coverage and targeted CBC exemptions

Most CBC by-laws enacted to date will apply uniformly to all lands in the municipality, and will allow only the exemptions required by the Planning Act and Ontario Regulation 509/20. However, the City of Hamilton’s CBC by-law provides examples of additional, targeted exemptions and reductions:

City of Hamilton’s CBC exemptions and discounts

  • Affordable Housing Exemption: Pending creation of a formal CBC Incentive Program, Hamilton is exempting affordable housing projects whose federal, Ontario, or Hamilton funding does not already cover payment of CBCs
  • Heritage Exemption: Hamilton CBCs will not apply to the updating of protected heritage properties (without making additions) for Building Code compliance, structural maintenance, or to optimize its continued, resumed or new uses
  • Downtown Discount: This 40 percent reduction applies to Hamilton’s Downtown Community Improvement Project Area, comprising the bulk of the City’s downtown commercial area and central north end, which is the largest of the areas already designated for revitalization (and which already enjoy certain development charge reductions)
  • Redevelopment Discount: Hamilton’s CBC by-law also provides a 50 percent reduction for redevelopment within an existing residential building envelope if its purpose is the creation of Residential Facilities or Lodging Houses – two types of non-household arrangements involving shared facilities between residents

Hamilton’s approach to CBCs illustrates both their flexibility as a municipal planning tool, and the jurisdictional differences that developers will need to take into account. For instance, whereas the City of Waterloo’s CBC strategy expressly aims to fund affordable housing and other growth costs by applying CBCs at the maximum rate to all City lands, Hamilton’s strategy for affordable housing and downtown revitalization includes full and partial exemptions affecting much of its territory.

Many municipalities, of various sizes across Ontario, have not yet chosen to pass CBC by-laws.  A future article in this series will address the many choices faced and some of the strategies adopted by municipalities in implementation of the new CBC regime.

Miller Thomson LLP’s Municipal, Planning & Land Development Group is actively monitoring the above developments and are available to discuss any questions or concerns that you encounter navigating the new CBC structure. An upcoming article will discuss calculation methods used to determine rates for CBCs in certain municipalities.


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