Bill 17: Protect Ontario by Building Faster and Smarter Act, 2025
Introduction
On May 12, 2025, the new Minister of Municipal Affairs and Housing, the Honourable Rob Flack, introduced Bill 17: Protect Ontario by Building Faster and Smarter Act, 2025 (“Bill 17”). Bill 17, found here, aims to speed up housing approvals, reduce costs, streamline existing processes, and support infrastructure. Bill 17 passed third reading on June 3, 2025, and is expected to receive royal assent before the legislature recesses for the summer break. Its release was accompanied by a technical briefing, which further describes the Province’s intent behind each proposed change as well as additional initiatives.
As Bill 17 proposes to amend eight Acts, this blog constitutes Part 2 of Davies Howe’s review and summary of the proposed changes and includes the proposed amendments to the development charge regime. The Province’s proposal outlining the proposed amendments is posted on the Regulatory Registry here and is open for comment until June 11, 2025.
If you missed Part 1 of Davies Howe LLP’s blog on Bill 17, which summarized the proposed changes to the Planning Act, the Building Code Act, the City of Toronto Act, 2006 and related initiatives, check it out here. Stay tuned for Part 3, which will summarize the proposed changes to accelerate transit and provincial infrastructure development.
Part 2 – Development Charges
Bill 17 introduces various amendments to the Development Charges Act, 1997 (the “DC Act”). These proposed amendments and the other initiatives set out below are described by the Province as attempts to reduce fees that can add to the cost of a new home. The government is seeking to fund needed infrastructure in strategic ways so as to not deter housing starts and growth. If passed, most of the proposed amendments require implementing regulations to be made after consultation.
Deferred Payments Expanded to Residential Developments
Currently under the DC Act, the payment of development charges for rental housing and institutional development are paid on the date of the issuance of an occupancy permit or the date the building is first occupied, whichever comes first, rather than at the issuance of the first building permit, as is the case for typical developments. These “deferred payments” are required to be paid in equal annual instalments and are subject to interest.
Bill 17 proposes to add residential development as a type of development to which these “deferred payment” provisions apply. In addition, no interest would be payable on “deferred payments” including on existing deferrals for rental housing and institutional development, except for any interest accrued up to the date these proposed changes come into force. The idea behind the amendment is to unleash cash flow to allow builders to “get shovels in the ground faster”. Deferring the development charge payment until occupancy will allow builders to pay development charges after, or closer to, closing of new home sales and avoid the need to finance the significant development charge payments at the building permit stage.
To implement these proposed amendments, Bill 17 proposes to authorize municipalities to secure the payment of the charge through financial security in specified circumstances by using certain instruments, which will both be prescribed by regulation.
Finally, Bill 17 proposes adding a provision to the DC Act expressly allowing a person required to pay a development charge under the deferral section to pay the charge before the day it is payable (i.e. occupancy/occupancy permit) even in the absence of a section 27 agreement.
Rate Freezes Not Applicable if Existing Charges Lower
Currently, the development charge amount is generally to be determined at the time that a zoning by-law amendment or site plan application is made. However, due to recent efforts by some municipalities to reduce development charges, this has resulted in situations where the “frozen rate” is higher than the rate in-force at the time the payment was to be made. Bill 17 proposes amendments to ensure that the “rate freeze” does not apply if the total amount of all charges, including interest, exceeds the rate in place at the time of payment.
Certain Development Charge By-law Amendments Permitted Without a Background Study
When a development charge by-law is proposed to be amended, it is subject to sections 10 to 18 of the DC Act, which require, among other things, that council complete a detailed background study and that the by-law go through a lengthy public consultation process. Bill 17 proposes to introduce an exception to this procedure in circumstances where:
- The municipality repeals or amends a provision for the indexing of a development charge so that the development charge will not be indexed; or
- The municipality decreases the amount of a development charge payable in the circumstances specified in the amendment.
Essentially, if a municipality proposes to amend the development charge by-law to reduce the amount charged, the municipality would not be required to undertake these procedural steps.
Exemption of Long-Term Care Homes
Bill 17 proposes to exempt long-term care homes from development charges payable after this section of Bill 17 comes into force. If the long-term care home is within a mixed-use development, only the long-term care portion is proposed to be exempt from development charges.
Regulation Making Authority
Bill 17 would authorize the Lieutenant Governor to prescribe regulations for the following:
- Capital costs – regulations setting out exceptions (and limitations on the exceptions) to eligible capital costs that may be recovered through development charges. The Province has indicated that these exceptions would include the costs of acquiring or improving land;
- Creating broader categories of development charge credits – currently, the DC Act provides that a DC credit for work done may only be given in relation to the service to which the work relates, unless the municipality agrees to transfer the credit to another service. This can result in situations where the amount of the credit is greater than the amount of the development charge payable for that service and developers are not fully compensated for the infrastructure that they pay to construct. The new regulation making authority would allow the Province to make regulations deeming that two or more services are one service for the purposes of obtaining a development charge credit. Combining service categories will allow developers to apply credits to more than one component of the development charge ensuring better recovery of costs for constructing eligible infrastructure; and
- Defining local services – regulations outlining what constitutes a “local service”. Currently, municipalities are not permitted to levy development charges for local services and they may not require a developer to construct services unless they are local services. However, “local services” are not defined in the DC Act and this determination is made on a municipality-by-municipality basis. The intent behind prescribing a definition of “local service” is to standardize the definition across municipalities and to provide clarity as to what services are chargeable.
Future Proposals to Accompany the Bill 17 Amendments
While not officially a part of Bill 17, the technical briefing for Bill 17 includes various other initiatives that the Province intends to pursue in the future to further streamline the municipal development processes. These initiatives include:
- Benefit to Existing Calculation Methodology – While the Lieutenant Governor has the authority under the DC Act to prescribe regulations outlining a methodology to calculate the benefit of infrastructure to existing development, it has not done so. As part of the Bill 17 initiative, the Province has indicated that it will consult with the development industry and municipalities to draft a regulation outlining a methodology for calculating the benefit of new infrastructure on existing development.
- Increased Transparency for Annual Development Charge Reporting – the Province is consulting on potential amendments to its existing regulations under the DC Act to expand the requirement that municipalities must spend or allocate 60% of the money in a reserve fund for select services at the beginning of each year to all services covered by the DC Act (i.e. not only water, wastewater, and roads, but also libraries, fire, police, childcare, etc.).
Conclusion
As always, the Davies Howe LLP team is here to keep you updated as Bill 17 moves through the legislative process, particularly once it goes through a “clause by clause” review. Stay tuned for Part 3 of our Bill 17 blog-series relating to accelerating transit and provincial infrastructure projects!
