Province, feds roll out $1B for municipalities that don't charge development fees

The Ontario and Canadian governments are spending $1 billion to help municipalities that don't levy development charges build and renew critical infrastructure.

Todd McCarthy, Ontario's acting minister of infrastructure, Rob Flack, Ontario's minister of municipal affairs and housing, and Jennifer McKelvie, parliamentary secretary to the federal minister of housing and infrastructure made the announcement at the Association of Municipalities of Ontario (AMO) conference in Ottawa on Sunday.

Each level of government will spend $500 million to create a new stream of the Municipal Housing Infrastructure Program (MHIP).

The "non-development charge municipalities stream" will help those communities pay for infrastructure like bridges, roads and waterways in order to enable new housing builds and protect the existing housing supply.

"It's good news," said McCarthy. "It demonstrates what happens when the federal and provincial governments, regardless of party, work with our municipalities to get things done."

At the news conference on Sunday, McCarthy originally told reporters the $1 billion was "separate and over and above" the $8.8 billion the provincial and federal governments pledged in March. His office later corrected that information to say the new funding was in fact part of the $8.8 billion agreement.

The Ontario government has already allocated up to $1.5 billion to the City of Toronto to offset the financial impact it would face for reducing their development charges. The City of Ottawa plans to cut development charges by 54 per cent to receive $478 million in infrastructure funding.

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In a speech to hundreds of municipal politicians Monday, Premier Doug Ford noted that "more people are basically in the queue to get money than the money we have," urging municipalities to reduce development charges further and promising to top up the fund if necessary.

In June, the government announced that cities would have to pay 10 per cent of the cost of new infrastructure before they could access the $8.8 billion in funding. Flack told CBC that would not be the case for municipalities covered under the new stream.

The first intake of applications for the new funding stream will open on Oct. 29, with projects to be selected in the spring.

The money will "go a long way to help a lot of communities," said Mississippi Mills Mayor Christa Lowry, chair of the Rural Ontario Municipalities Association (ROMA).

Lowry said that out of Ontario's 444 municipalities, more than 200 of them are not collecting development charges.

"When I think about the communities that ROMA represents across the province, we're ready to grow," she said. "We've got lots of really big plans, but getting there is the tricky part."

Tariff uncertainty a factor

McCarthy said the funding stream is about strengthening local economies amid the economic uncertainty of U.S. tariffs.

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The province has heard that one of the biggest barriers to new housing development is the cost of building and upgrading infrastructure, he said at Sunday's news conference.

"We know that many municipalities are dealing with repair backlogs, higher construction costs, and limited funding sources for critical infrastructure projects — especially when they do not implement development charges," he said.

Robin Jones, AMO's outgoing president and the mayor of Westport, Ont., also lauded the move, noting infrastructure pressures can be particularly challenging for rural, small and northern communities.

Call for action on addictions

Later on Sunday, the Ontario Big City Mayors (OBCM) group reiterated a concern they'd expressed at previous conferences: that the province needs to take stronger steps to tackle the homelessness and addictions crisis.

The group's positions include that the province create a ministry dedicated to addictions issues, while also expanding treatment options, reviewing the Health Care Consent Act and the Mental Health Act and ultimately declaring a state of emergency.

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"We have to ... be courageous enough to say what we're doing isn't working," said Burlington, Ont., Mayor Marianne Meed Ward, the chair of the group.

"We've got to try everything and we've got to talk about everything."

Meed Ward said she'd be meeting with provincial officials over the course of the AMO conference, which runs until Wednesday in Ottawa.

Ontario Premier Doug Ford is slated to address the conference Monday morning.