Proposed Changes to the D.C.A.: Bill 108 - An Act to amend Various Statutes with Respect to Housing, Other Development, and Various Matters

On May 2, 2019, the Province introduced Bill 108 which proposes changes to the D.C.A. The Bill was introduced as part of the Province's "More Homes, More Choice: Ontario's Housing Supply Action Plan". The Bill received royal assent on June 6, 2019.

While having received royal asset, many of the amendments to the D.C.A. do not come into effect until they are proclaimed by the Lieutenant Governor. However, transitional provisions with respect to soft services, as well as other provisions clarifying definitions and administrative powers to make regulations, are in effect as of the date of royal assent. Regarding the transitional provisions for soft services, as noted below, services not identified under the new subsection 2(4) (i.e. soft services) will no longer be eligible to be included in D.C. by-law once proclaimed. Soft services within an existing D.C. by- law can remain in effect, even if the by-law expires, until the earlier of the prescribed date (currently anticipated to be January 1, 2021), the date a Community Benefits Charge By-law is passed, or the date when the existing D.C. by-law is repealed. A summary of the changes to the D.C.A. to take effect upon proclamation by the Lieutenant Governor is provided below:

Changes to Eligible Services - the Bill will remove "Soft Services" from the D.C.A. These services will be considered as part of a new Community Benefit Charge (discussed below) imposed under the authority of the Planning Act. Once the new s.s. 2(4) is proclaimed, eligible services under the D.C.A. include:

• Water supply services, including distribution and treatment services;
• Wastewater services, including sewers and treatment services;
• Storm water drainage and control services;
• Services related to a highway as defined in subsection 1 (1) of the Municipal Act,

  2001 or subsection 3 (1) of the City of Toronto Act, 2006, as the case may be;

• Electrical power services;
• Policing services;
• Ambulance services;
• Fire protection services;
• Toronto-York subway extension, as defined in subsection 5.1 (1);
• Transit services other than the Toronto-York subway extension;
• Waste diversion services; and
• Other services as prescribed.

  Waste Diversion and Ambulance - the Bill will remove the mandatory 10% deduction for these services.

  Annual Installments - the Bill proposes that Rental Housing, and Commercial/Industrial/Institutional developments pay D.C.s in six equal annual payments commencing the earlier of the date of issuance of a building permit or occupancy. Non-profit housing developments will pay D.C.s in 21 equal annual payments. Interest may be charged on the installments, at a prescribed rate, and any unpaid amounts may be added to the property and collected as taxes.

When D.C. Amount is Determined - the Bill proposes that the D.C. amount for all developments proceeding by Site Plan or requiring a Zoning By-law Amendment, shall be determined based on the D.C. charge in effect on the day of the application for Site Plan or Zoning By-law Amendment. If the development is not proceeding via these planning approvals, then the amount is determined the earlier of the date of issuance of a building permit or occupancy.

Soft Services to be Included in a new Community Benefit Charge under the Planning Act - it is proposed that a municipality may by by-law impose community benefits charges against land to pay for the capital costs of facilities, services and matters required because of development or redevelopment in the area to which the by- law applies. These services may not include services authorized by the D.C.A. Various provisions are provided as follows:

• Before passing a community benefits charge by-law, the municipality shall prepare a community benefits charge strategy that, (a) identifies the facilities, services and matters that will be funded with community benefits charges and (b) complies with any prescribed requirements;
• The amount of a community benefits charge payable shall not exceed an amount equal to the prescribed percentage of the value of the land as of the valuation date;
• The valuation date is the day before building permit issuance;
• Valuations will be based on appraised value of land. Various requirements are set out in this regard;
• All money received by the municipality under a community benefits charge by-law shall be paid into a special account;
• In each calendar year, a municipality shall spend or allocate at least 60 percentof the monies that are in the special account at the beginning of the year;
• Requirements for annual reporting shall be prescribed; and
• Transitional provisions are set out regarding the D.C. reserve funds and D.C.credits.

1.4 Impact of Bill 108 on the Town's D.C. Study Process

Based on the transition provisions in Bill 108 identified above, municipalities with a D.C. by-law expiring between June 6, 2019 (i.e. date of royal assent) and before prescribed date (anticipated to be January 1, 2021), can either:

• Pass a new D.C. by-law for both hard services (i.e. those services permissible under the new s.s. 2(4)) and soft services; or
• Amend their existing D.C. by-law to continue to impose the current soft services, and pass a new D.C. by-law for the hard services only.

  In both cases, the charges pertaining to the soft services would continue to be imposed during the transition period until a Community Benefits Charge By-law is passed under the authority of the Planning Act, or the prescribed date, whichever comes first.

  Through discussion with the Town's staff, it was determined that the preferred approach was to pass a new by-law for all services, in part, as this would serve to inform the forthcoming Community Benefits Charge By-law. Hence, this D.C. background study contains the statutory requirements to adopt a new D.C. by-law for all permissible services under the D.C.A. as at the date of writing.