Ontario Liberals warn of 'Fordflation' with housing legislation

Here's how Ont. is addressing the housing crisis The Ontario government announced sweeping housing changes that will allow up to three units on each residential lot.

The Ontario Liberals are warning of “Fordflation” as the government continues to push its housing legislation forward on Monday.

The Progressive Conservative government tabled a bill last week that would, among other things, override municipal zoning laws in some situations and allow for the construction of up to three units on each residential lot.

As part of the legislation, Ontario will also scrap fees—including development charges, parkland dedication levies and community benefit charges—for affordable housing, non-profit housing and “inclusionary zoning units.”

Development charges, which are generally used by municipalities to pay for services or infrastructure impacted by development, will also be waived or reduced for a number of other types of rental units.

Speaking to reporters on Monday morning, the Liberals said these fees should be “passed onto consumers” instead of being waived in an effort to lower the cost of purchasing a home.

“The point of reducing development charges is to make housing more affordable,” MPP Stephen Blais told reporters. “There is nothing that I have seen in the legislation that requires the price of the house to go down in exchange for the reduction of the development charge.”

“I’m very open to hearing his explanation on how that will be achieved, but simply hoping that this will happen is not a plan to actually make things work.”

Municipalities, Blais added, should also be compensated for the loss of development fees so they do not have to pay higher property taxes to make up for the funds lost. Blais said that residents should know there will be a “Fordflation” on their property taxes if development charges are not collected.

The Liberals did not say how much the government should earmark to make up the difference of the lost fees.

When announcing the new housing legislation, the PCs argued that municipalities have millions of dollars available in reserve development fee funds, and that no additional revenue is necessary in order to make up the difference of those funds.

However, the director of the institute on municipal finance and governance school of cities at the University of Toronto says she is “less confident.”

“That money is made up of development charges that were collected for specific infrastructure,” Enid Slack told CTV News Toronto last week. “You don't build the infrastructure the day the development charge revenue appears, so it's put into reserves, but it’s allocated for specific infrastructure.”

“It can’t be used for new (or) other developments.”

Slack added that other than property taxes and user fees, there are not many ways municipalities can raise this kind of money outside of investments by other levels of government.

In addition to providing financial compensation, the Liberals are also calling on the government to invest in the construction of green housing, ensure communities consist of “various housing types” and “safeguard the use of public hearings.”

The party argues that this will help municipalities build “complete communities” rather than simply build more homes.

The Ontario government has pledged to build 1.5 million homes in the next 10 years.