The Development Charges Act provides the legislative authority to collect development charges.
The principle behind development charges is that growth should pay for growth. Development charges ease the financial burden on existing taxpayers to fund new services due to growth. Without development charges, the costs for additional infrastructure would be at the expense of existing property owners in the form of higher property taxes and user fees. Most municipalities in Ontario use development charges.
The Development Charges Act, 1997 (Act) provides Council with the authority to pass a by-law to impose Development Charges. The Act requires that a Development Charges Background Study of a new Development Charges By-law must be completed at least once every five years.
The background study takes the following into account:
- A forecast of the amount, type and location of the development, population
- The historical level of capital service levels A review of future capital projects to provide for the expected development.
- The Act also requires the municipality to hold at least one Public Meeting to present the updated Development Charges Background Study and proposed Development Charges Rates.
Once all of the requirements are met, a new by-law will be passed based on the results of the background study. The act and the by-law provide for an annual adjustment, on January 1st of each year, of Development Charges Rates. The act and the by-law also provide exemptions for certain types of development. The Development Charges By-law should be reviewed for these exemptions.
