Understanding Development Charges

Understanding Development Charges Read time: 3-4 minutes What are Development Charges? Development charges are one-time fees imposed by lower and/or upper tier municipalities on land developers, home builders and institutions when they develop or build upon an area of land. The fees are intended to offset the cost of increased municipal services and infrastructure required due to population growth within the municipality, resulting from new development. The municipality can use development charges to pay for ‘hard services’ such as water, waste management or roads, and ‘soft services’ such as recreation centers, libraries or parks. The Legislation The province of Ontario enacted the Development Charge Act (the “Act”) in 1989 and significantly revised it in 1997. The Act sets out the process by which municipalities can create development charge by-laws. Before a municipality can pass a new by-law, they must conduct a background study, detailing how they have predicted and calculated population growth and the increased need for services and infrastructure. New development charge by-laws can be passed within one year of the completion of a background study. A new background study must be completed at least every 5 years. The Act also dictates which services a municipality can use the … Continue reading Understanding Development Charges