On September 18, 2020, Ontario Regulation 509/20 came into force under the Planning Act to support the implementation of community benefits charges (CBCs) and parkland regulation (found here). This starts the two-year transition period for municipalities to implement the new framework.
CBCs are to be implemented under the “new” section 37 of the Planning Act and will give municipalities the ability to fund various community services not otherwise covered by development charges. This new Regulation provides additional details to section 37 of the Planning Act by outlining the requirements of a municipal community benefits strategy, development exclusions, maximum charge percentage, notice requirements for passing CBC By-laws, minimum interest rate rules, appraisal report timelines and municipal reporting requirements. This Regulation supports the Housing Supply Action Plan created through More Homes, More Choice Act, 2019 (Bill 108) as well as the COVID-19 Economic Recovery Act, 2020 (Bill 197).
Exclusions from Community Benefit Charges (s.1)
The Regulation expands on section 37(4)(e) of the Planning Act by expressly excluding long-term care homes, retirement homes, universities and colleges, memorial homes, clubhouses or athletic grounds of the Royal Canadian Legion, hospices and non-profit housing from CBCs.
Community Benefits Strategy (s.2)
Section 37(9) of the Planning Act requires the municipality to prepare a CBC strategy. Section 2 of this Regulation outlines the requirements of the strategy as including the following:
- estimates of the anticipated amount, type and location of development and redevelopment with respect to which CBCs will be imposed;
- estimates of the increase in the need for facilities, services and matters attributable to the anticipated development and redevelopment to which the CBC By-law would relate;
- identify the excess capacity that exists in relation to the facilities, services and matters referred to in clause (b);
- estimates of the extent to which an increase in a facility, service or matter referred to in clause (b) would benefit existing development;
- estimates of capital costs necessary to provide the facilities, services and matters referred to in clause (b); and
- identify capital grants, subsidies and other contributions made to the municipality or that the council of the municipality anticipates will be made in respect of the capital costs referred to in clause (e).
Maximum Charge (s.3) and Appraisals (s.6)
Section 3 of the Regulation establishes the prescribed maximum rate for a CBC under subsection 37(32) of the Planning Act as 4%, meaning that the CBC payable in any particular case cannot exceed 4% of the value of the land as of the valuation date.
The owner of land proposing to develop a site can provide the municipality with an appraisal of the value of the site if they are of the view that the CBC exceeds what is legislatively permitted. Similarly, a municipality can provide the owner of the land with an appraisal if it disputes the owner’s appraisal. If the appraised values are within 5% of each other, the municipality must refund to the owner the difference between the amount of the CBC and the higher of the appraised values. If the appraised values differ by more than 5%, a third appraisal is prepared. The Regulation establishes the following timeframes of these appraisals:
- If the owner disagrees with the charge, they pay the charge under protest and provide the municipality with an appraisal of the value of the land within 30 days;
- If the municipality disputes the owner’s appraisal report, they must provide the owner with their own appraisal within 45 days;
- If these appraisals differ by more than 5%, the owner can select an appraiser from the municipal list of appraisers who will then provide an appraisal within 60 days.
Municipality Reporting Requirements (s.7)
Municipalities are required to prepare and make available to the public annual reports that identify the balances of the CBC special account and the Parkland special account. The Regulation states that these reports must include details on the amounts spent, how capital costs not funded from the special account were funded, the amount borrowed from the account and the interest accrued on this amount.
Please contact us if you have any questions as to how this Regulation may apply to you and your development project.
