Item - 2016.EX11.7

The Executive Committee recommends that:

1. City Council authorize the Chief Building Official to require applicants seeking conditional below-grade permits to enter into a Development Charges Deferral Agreement in accordance with the general terms and conditions in Appendix 1 to the report (January 14, 2016) from the Deputy City Manager and Chief Financial Officer and in a form acceptable to the Deputy City Manager and Chief Financial Officer and the City Solicitor.

2.  City Council urge the Province to direct the Minister of Transportation to implement uniform region-wide development charges for GO Transit and Metrolinx Capital Expansion projects.

3. City Council request the Deputy City Manager and Chief Financial Officer to report on the outcome of the request in Recommendation 2 above, to the same meeting as the SmartTrack report which is currently targeted for June 2016.

4. City Council direct and authorize the appropriate City staff to take the necessary action to give effect thereto.

The Province enacted Bill 73, the Smart Growth for Our Communities Act, 2015 on December 3, 2015, to amend the Development Charges Act, 1997 (the "DCA") and the Planning Act and filed amendments to the related regulation (Ontario Regulation 428/15) on December 17, 2015. The amended legislation came into effect on January 1, 2016. This report provides Council with an assessment of the legislative and regulatory amendments to the Development Charges Act, 1997. The changes to the Planning Act will be the subject of a future report from the Chief Planner to Planning and Growth Management Committee.

The primary effect of the new legislation is to add transit to the list of services not subject to the mandatory 10 percent discount, permit the use of a forward-looking level of service for transit development charge calculations, and allow recoveries for waste diversion. These changes partially respond to Council's long-standing requests for amendments to the Development Charges Act, 1997 and will allow development charges to fund a higher proportion of growth-related infrastructure costs.

However, amendments to the Development Charges Act, 1997 also alter the timing of payment of development charges to the first building permit for multi-permit developments (which include excavation/shoring or foundation permits) and prescribe extensive reporting requirements under the calculation methodology for transit which could have a significant negative impact on the City.

Most of the amendments to the Development Charges Act, 1997 are not effective until the City's development charges by-law is updated or renewed. However, the changes to the timing of calculation and payment of development charges are effective immediately and take precedence over the City's existing by-law.  To bridge the interval until the next anticipated by-law renewal (2017/2018), staff recommends that the Chief Building Official be authorized to require applicants seeking conditional below-grade building permits to enter into a Development Charges Deferral Agreement. Development charges would then become payable with the issuance of the first above-grade permit.

These were the first major changes to the Development Charges Act, 1997 since 1997 when, under a different government and different economic circumstances, the Act was amended to restrict municipal cost recovery.  Accordingly, municipal officials had hoped that the exhaustive consultation over the summer of 2015 would achieve broader improvements in support of the principle of growth paying for growth.

This report has been prepared in consultation with the City Solicitor and the Chief Building Official who concur with the recommendations.