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Ontario to launch audits of six municipalities' housing finances

Steve Clark, Ontario’s Minister of Municipal Affairs and Housing, speaks to journalists at the Queens Park Legislature, in Toronto on Wednesday, November 16, 2022. THE CANADIAN PRESS/Chris Young

TORONTO — Ontario's minister of municipal affairs and housing is moving forward with audits of six municipalities to see if there will be any "potential or perceived" financial hits from a provincial housing law.

Municipalities have been raising concerns about a housing law, that, in part, freezes, reduces and exempts fees developers pay on certain builds such as affordable housing. 

Those fees go to municipalities to pay for infrastructure to support new homes, such as roads and sewers, and they say the provincial changes will leave them $5 billion short.

Municipal Affairs and Housing Minister Steve Clark has expressed some skepticism about the impacts, and in late November he announced he would launch third-party audits of "select" municipalities.

Clark announced Thursday that he's looking for auditors to go over the books of Toronto, Newmarket, Peel Region, Mississauga, Caledon and Brampton – the latter three are part of the upper-tier municipality of Peel Region.

"The province intends to use these audits to reach a shared understanding of any potential or perceived impacts of the More Homes Built Faster Act as regards changes to development-related fees and charges," he wrote in a statement.

"These audits will inform the province’s efforts to ensure taxpayers receive maximum value for money and the best possible services ... These audits may find duplicative spending on back-office supports that would be better spent expanding frontline services."

Clark's statement does not explain why he chose those municipalities. 

Premier Doug Ford has specifically called out Mississauga Mayor Bonnie Crombie and Newmarket Mayor John Taylor at news conferences for their opposition to the housing law.

Taylor said he was not told why Newmarket was chosen for an audit, but said he looks forward to a "productive dialogue to better understand the audit process" and how it will help keep municipalities whole, as Clark has promised.

"I think they believe perhaps the impact is not as great as we believe, so they want maybe to have an analysis of that," he said in an interview.

"The good news is this is the first important step in being kept whole ... Municipalities are generally, in public and behind closed doors, very, very concerned about the financial stability of cities and communities across Ontario as a result of Bill 23."

Clark has said the province will ensure there is no funding shortfall "for housing-enabling infrastructure" as a result of the law, as long as municipalities meet the housing targets he assigned them.

Crombie wrote in a statement that she welcomes the audit.

"Like many cities across the province, Mississauga is starting to feel the impacts of lost development charge revenues as a result of Bill 23," she wrote.  

"As Ontario’s third-largest city, this translates to a loss of nearly $1 billion in revenue in the next decade that we use to pay for new parks and infrastructure like roads, trails, community centres, fire stations, libraries, and other housing-enabling infrastructure."

Crombie has expressed concern about making the promise of keeping municipalities whole contingent on meeting the province's housing targets – 120,000 homes for Mississauga, for example.

There are a lot of factors out of a municipality's control, such as labour shortages, supply chain issues, or financing challenges faced by developers, she said.

"Cities can speed up approvals and permits, but rubber stamps alone won’t build housing," Crombie wrote in her statement Thursday. 

Peel Region is also among the communities subject to a municipal governance review and Crombie noted her pitch to get her city out of the upper-tier municipality.

"(The) 120,000 homes in 10 years is an ambitious target and one I think we can only meet as an independent Mississauga, a city that is 'right-sized' to run efficiently and develop creative solutions to the unique challenges before us," she wrote.

The government said the audits would also be used to develop future policies and programs supporting "long-term municipal financial sustainability and housing-related infrastructure investments."

This report by The Canadian Press was first published May 4, 2023.

Allison Jones, The Canadian Press

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