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Published on Thursday, May 8, 2008

Builders' costs subsidized by taxes

Burlington Post

Halton residents may soon have to dish out $70 a year in taxes to cover what Halton Region would lose through giving developers mandatory and voluntary discounts on their development charges (DC).

This notion left at least one local citizen unhappy at a public meeting the Region's administration and finance committee held on the new proposed DCs Wednesday morning.

"There has to be more consideration for the taxpayer," asserted Miltonian Olga Shewchun. "We're not a bottomless pit."

Currently the Region is proposing a 30 per cent DC discount for manufacturing and office developments. The lost revenues from that potential new discount, combined with the mandatory DC exemptions the Region must grant under the Province's Development Charges Act and the discretionary exemptions already made for things like agriculture uses, would add up to $70.80 for the average household based on a $300,000 assessment.

This is up from the $53.60 the typical homeowner has paid over the past several years to cover DC discounts.

The new DCs are expected to cover 78 per cent of development costs, or $56.9 million per year, leaving 22 per cent to be paid by the taxpayers, or $15.7 million.

Shewchun urged the Region to collect maximum DCs from local developers.

"It's the taxpayer who ultimately has to pick up any shortfall," she noted.

Regional Chair Gary Carr defended the Region's financial practices, noting the 2008 budget brought about the lowest tax increase in all of Ontario.

"This council should be praised for its fiscal responsibility," he said.

DCs are levied by municipalities to recover growth-related costs associated with things like roads, water and sewer infrastructure needed to service new development.

The Region is proposing to raise its DCs by thousands of dollars. At a meeting held in March, the municipality was told by local developers and chambers of commerce that the proposed substantial DC increases will be a big turn-off to businesses looking to locate in Halton.

But the argument doesn't hold much weight for Burlington resident Tom Muir.

"They (developers) make these billions of dollars and they always cry poor. They always say the same thing, no matter what the economic condition," he said. "They always want subsidies."

The committee also heard from the development community, which once again argued that the proposed high DCs -- particularly for warehousing/distribution businesses, since they won't receive a discount -- would drive companies to other regions.

Meanwhile, residential developers Tribute Communities and the Metrontario Group -- which are building in Oakville -- encouraged the Region to implement some kind of discount for high-rise or high-density developments.

Currently the Region charges Halton-wide DCs for roads and general services and area-specific DCs for water and wastewater, with the latter fees being higher in Halton Urban Structure Plan (HUSP) areas where rapid development is taking place, like Milton, north Oakville and the Milton/Halton Hills 401 corridor.

A background study prepared on the topic proposes region-wide DCs for all services. If these kinds of fees were to be implemented, the DC to develop a home in a non-HUSP area could go from $13,677 to $27,474.

For warehousing/distribution businesses, it would cost $13.65 per square foot, while manufacturing/office developments would pay a discounted rate of $9.55 a square foot.

A final proposal will then be presented to the administration and finance committee at its meeting Wednesday, May 21 and then on to regional council Wednesday, May 28.

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Author: Mayor Rob Burton

Categories: Features, News




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