Ford says municipalties can make up revenue loss from development charges with 'waste'

Ontario Premier Doug Ford said Thursday that he does not believe  the loss of development charges entailed in a housing bill his government passed this week will hurt municipalities and said they can likely make up some of the shortfall by cutting waste.

“I don't believe it does at all,” Ford said at a Toronto announcement when asked by reporters whether he thinks the bill hurts the finances of municipalities.

He vowed that “we are not going to budge on the development fees.”

The comments come a day after Housing Minister Steve Clark promised in a letter to Toronto Mayor John Tory that the province would make Toronto “whole” for the loss of revenue, though Clark did not specify whether that would be on a dollar-for-dollar basis.

Bill 23, which passed this week, cuts or reduces municipal development charges for developers as a way to try and incentivize them to build more rental and affordable housing.

Tory has said the move could be devastating for Toronto’s finances, with the city estimating a revenue loss of around $200 million per year.

While Clark promised to make the city whole, he also said Wednesday that the province would be launching a third-party audit of municipal reserve funds.

At a news conference yesterday, Tory said that a false impression has been created that the city is squirrelling away all the funds from the charges.

“I just think the audit will find that what we’ve done is fair and prudent and sensible, and that this notion that’s been created that we’re sitting on some piggy bank of money that we can just allocate to look after anything is just nonsensical,” the mayor said.

He said that while development charges collected by the city are not used immediately, they are put into reserve to pay for projects the city knows it will need to carry out, much like a homeowner saving for a new roof.

Contrary to Ford’s comments, Tory said the loss of development charges represents a threat to the city’s finances, one they will fight if necessary.

“We will make our voices heard in this matter in a way that is consistent with the size of this threat to the wellbeing of this city and frankly other cities across the province,” he said Wednesday.

But in his comments Thursday, the premier cast doubt on the idea that the municipal government is managing its funds well.

“I spent four years down there as part of the audit committee, (as) the vice chair,” Ford said, referring to his time at city hall when his brother was mayor. “I know there’s waste down at the city and we want to work cooperatively with all the cities and municipalities,” Ford said.

He said there’s waste at all levels of government “and it’s our job as prudent fiscal managers for the taxpayers to drive out the waste.”

He said he finds it “staggering” that cities would push back against the move.

“They want to increase the development charges. Who does that during a housing crisis? No one does that,” Ford said.

He said the city’s fees are passed on to homebuyers and suggested that increasing charges to developers drives up the cost of homes.

But the Ford government has in the past declined to reign in some realtor practises, such as blind bidding, which have been criticized for artificially driving up home prices.

Recent television ads paid for by the Toronto Regional Real Estate Board and other groups have sought to characterize the problem of housing affordability as having to do with supply and red tape, as well as municipal fees.

The PC government is also opening up previously protected lands for development. Asked Thursday whether he or anyone in his government tipped off developers who purchased some of those lands before the changes were announced — land which at the time could not be developed for housing — Ford said no.

“Yeah, I can confirm that,” he said when asked whether he was sure that no-one in his government had tipped off developers about the move beforehand.