On November 28, 2022, the Province passed Bill 23, the More Homes Built Faster Act. The Bill aims to support the province’s goal of getting 1.5 new homes built in Ontario in the next 10 years.
The City’s new housing plan, Growing Mississauga was approved by City Council in March 2023. It represents our pledge to meet the province’s 120,000 housing target for Mississauga.
Mississauga is ready to work with the Province and developers to get housing built. But to grow a city, we need more than new homes. We need new infrastructure, parks and services to build complete communities.
Ontario’s new legislation, More Homes Built Faster Act, has concerning impacts for Mississauga. Most notably, the Bill decreased the amount of development and parkland fees municipalities can collect. These fees help us to pay for new parks and infrastructure like transit, roads, trails, sewers and more.
It is estimated that Bill 23 changes could result in $885 million in losses over the next decade in Mississauga. In Peel Region, the losses total a projected $2 billion.
Many municipalities, including Mississauga, opposed these changes. We called on the government to reverse the proposed cuts to infrastructure and parkland funding. In response, the province committed to making municipalities “whole” for any losses resulting from Bill 23. Before providing compensation, the province has announced that it will undertake a third-party audit of municipal finances.
On May 4, 2023, Mississauga received a letter from the Minister of Municipal Affairs and Housing and a terms of reference for the audit. According to the terms of reference, the audit aims to understand:
The audits are expected to begin in July 2023. Mississauga is confident in the City’s financial management practices and will work in cooperation with the provincially-appointed auditors throughout the process.
The City of Mississauga has a long track-record of strong financial management. We have maintained a Triple A credit rating for 19 straight years and won multiple financial management awards, including the Canadian Award for Financial Reporting from the Government Finance Officers Association.
The City also finds savings every year. In 2022, $3.5 million was saved and since 2009, over $77 million in savings has been found. We achieved this through ongoing efficiencies and a commitment to the LEAN program. In fact, as municipal leaders, Mississauga LEAN Office staff have been asked to assist the Ontario government with the implementation of their own LEAN program.
In addition to the almost $1 billion loss in City revenue, Bill 23 has other possible impacts for Mississauga.
The provincial government allows municipalities to collect fees from developers to help offset the cost of growth. Learn more about these fees, why they are collected, and how they are used.
Builders pay Development Charges to help pay for the infrastructure their new houses, condos, townhomes or offices need. This includes things like roads, sewers, transit services, fire stations, community centres and more.
Developers help pay for new parks too. When they build, they must give the City a piece of land that can be used for a park (which is called Parkland Conveyance). Or, if a piece of land isn’t feasible or suitable for parkland, they pay a fee instead (which is called Parkland Cash-in-Lieu). Either way, this makes sure the City has the right amount of parkland for everyone.
Development Charges and Parkland Cash-in-Lieu are sometimes referred to as municipal fees or growth charges. Learn more about Mississauga’s Growth Charges.
Growth charges are one-time fees. The Province’s Planning Act allows cities to collect these charges so that growth pays for growth – not existing taxpayers. However, that doesn’t mean existing residents don’t contribute as well. They help pay for the ongoing costs for the new parks and infrastructure through their annual property tax bill and service fees.
Here are a few of the checks and balances for Growth Charges:
Growth Charges have increased due to the same cost pressures faced by the building industry, like rising construction and engineering costs and land values for new parks. If fees don’t increase, we won’t have the funds to support new development.
While the City aims to ensure growth pays for growth whenever possible, we’re also committed to supporting affordable housing providers and non-profit developments in our communities. This year we launched two grant programs to provide eligible affordable rental housing developments and non-profit organizations that provide long-term care homes, hospices, shelters and transitional housing with grants to offset the City’s portion of development charges.
Municipal costs, including Development Charges and parkland fees make up a small percentage of overall building costs but have a huge impact on the quality of life in a city. In Mississauga, our residential development charges range from about $17,000 for the smallest unit up to a maximum of about $48,000 for single detached homes.
According to a July 2022 study by the Canada Home and Mortgage Corporation, developers typically earn between 10 and 15% profit once all other costs, including government fees, are paid.
Developers price housing based on what the market will pay. If cities reduce the fees, there is no guarantee that developers will lower the price of housing or pass any savings on to homeowners.
The fees we collect go into reserves that are assigned to projects in our 10-year capital plan. These are large projects that keep our city running and make it more livable.
Reserve funds must be spent in a set timeframe. Our capital plan is a public document that is discussed publicly every year during Budget negotiations.
We only collect what is needed for growth (in accordance with the Planning Act) and manage our reserves carefully. The aim is to:
The Province wants Mississauga to build 120,000 new homes in the next 10 years. According to our Parks Plan, we need about 94.6 acres of new parkland to support those homes. With Bill 23, we will receive only 18.9 acres of new parks.
As a result of Bill 23, Mississauga stands to lose up to $560 million in revenue for new parks and public spaces over the next 10 years. On top of the capped revenue, Bill 23 will also allow developers to decide where the new parks should go. That means, the City loses its ability to ensure parks are large enough to accommodate amenities, grow trees and are desirable spaces where residents want to spend time outdoors.
New parks and public spaces make our community livable. They’re just as important to building a great city as the roads, sewers and fire stations needed to service it.