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Development Charges Update

Development Charges are levied against residential and non-residential new development to finance the growth related capital costs associated with meeting the service requirements of the development. The purpose of Development Charges is to ensure that new growth pays for capital costs associated with servicing new development without placing a burden on existing taxpayers.  The City of Owen Sound has had Development Charges in place since 1999.  The Development Charges Act requires that the City review the Development Charges By-law every five years through the preparation of a Background Study.

Development Charges AD HOC Committee

Public Notices

Presentations & Studies

Development Charges By-law

The Development Charges By-law 2015-080 was passed by Council on the 27th of May, 2015.

Proposed Amendment to Development Charges By-law

The amendment is with respect to how the charge is collected during the first two years of the By-law during the residential development charge holiday period.

Opportunities for Participation

December 18, 2014 – 6:30 PM – Development Charges Open House & Public Information Centre

Please join us for an Open House and Public Information Centre/Presentation and consultation specifically for the Owen Sound development community hosted by the City’s Development Charges Ad Hoc Committee at:

Bayshore Community Centre (Sound Room)
1900 3rd Avenue East, Owen Sound, Ontario
December 18, 2014 - 6:30 PM

Doors open at 6:30 PM; formal Presentation begins at 7:00 PM followed by discussion, question and answer period. The City’s consultant, Watson & Associates, will make the formal presentation that will include:

  • Overview of the Development Charge Process for the City
  • Overview of the Development Charge methodology
  • Summary of service standard evaluation
  • Summary of growth related costs
  • Preliminary City wide and Area Specific DC calculations
  • Comparison of preliminary Owen Sound DCs to other municipalities
  • Proposed Policies

January 12, 2015 – 7:00 PM – Public Meeting

  • The Development Charges Public meeting to review the Development Charges Draft Background Study and By-Law will be January 12, 2015

Questions and Answers about Development Charges

What are Development Charges?

Development charges are one-time fees levied by municipalities on new residential and nonresidential
properties to help pay for a portion of the growth-related capital infrastructure
requirements. Development charges are determined and accounted for by type of service
component. Development Charges have been used in Ontario for almost 60 years.

Why do Municipalities use Development Charges?

Approximately 75% of the municipalities in Southern Ontario use development charges to
ensure that the cost of providing infrastructure to service new development is not borne by
existing residents and businesses in the form of higher property taxes and water/wastewater
rates.

What Services are included?

The legislation allows for most municipal services to be included. For Owen Sound, the
following Services are being considered:

  • Roads and Related
  • Transit
  • Fire
  • Police
  • Outdoor Recreation
  • Indoor Recreation
  • Library
  • Growth Studies
  • Stormwater Drainage and Control Services
  • Wastewater Services
  • Water Services

Aren’t my taxes or taxes paid on vacant land intended to cover these kinds of costs?

Generally, property taxes pay for existing operating and maintenance costs along with
replacement of current infrastructure. As new developments occur, it gives rise to additional
operating costs as well as long term maintenance/replacement costs for the new assets.

How does the City account for annual spending of Development Charge reserves?

The Development Charges Act requires the treasurer of the municipality to provide a Reserve
Fund statement to Council every year.

Are there certain kinds of development that can be exempt?

The Act provides for certain mandatory exemptions as follows:

  • for industrial building expansions (may expand by 50% with no DC)
  • May add up to 2 apartments for a single as long as size of home doesn’t double
  • Add one additional unit in medium & high density buildings
  • Upper/Lower Tier Governments and School Boards

In addition, the Act allows Council the discretion to include various types of discretionary
exemptions, such as:

  • Reduce in part or whole DC for types of development or classes of development
  • (e.g. industrial or churches)
  • May phase-in the charges over time
  • Redevelopment credits to recognize what is being replaced on site (not specific in
  • the Act but provided by case law)

In addition to the mandatory exemptions, Owen Sound presently provides the following DC
exemptions:

  • Non-residential buildings used accessory to an agricultural operation are exempt;
  • Temporary building where the owner has completed an agreement with the City specifying the owner’s obligation to remove the building over time; and
  • Places of worship for religious uses (that are exempt from Provincial taxes pursuant of the Provincial Land Tax Act R.S.O. 1990, cP32 as amended).
  • Present charge represents approximately 80% of the charge calculated in the 2010 background study.

Are Development Charges a disincentive to development?

There have been a considerable amount of studies and reviews undertaken across North America. These studies identify that there are numerous factors which affect the purchase of a
home and/or the building/development of residential and non-residential lands, of which a development charge is only one of these factors.

If a City does not have Development Charges, how else can they pay for the costs associated with growth?

If there are no development charges in place, the City will have to pay for growth with either one or a combination of increased taxes, increased water/wastewater/stormwater rates, or by the use of existing reserves (if available).

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