Growth funding tools help new developments (or redevelopments) pay for the municipal services and infrastructure that support residents and businesses. With more than 3.65 million people projected to call Toronto home over the next thirty years, the City needs a plan to pay for our growth today and in the future. So as we grow, we’re investing in roads, transit, water and sewer systems, community centres, parks, housing, childcare and other municipal services and infrastructure.
The legislative framework provides financial tools for the City to collect funds as growth occurs on the premise that growth pays for growth. This means that new developments (or redevelopments) should help pay for the municipal services and infrastructure that support residents and businesses. It’s part of having livable, vibrant, and complete communities, not placing the financial burden on existing taxpayers.
Recently, the Ontario Government enacted through Bill 197 changes to how municipalities generate funding from development. The changes made through Bill 197 means the City must update three primary growth-related funding tools:
Collectively, these three financial tools generate approximately $750 million in revenue for the City of Toronto each year, which is used to help pay for building and improving infrastructure and services that support residents and businesses.
For more information about growth funding tools, please review the frequently asked questions.
Growth funding tools are fees imposed by municipalities on new development. They are based on the principle that growth pays for growth. The City uses the revenues from these tools to pay for growth-related public spaces, safe drinking water, transit, libraries and other infrastructure and services to support our growing population and a thriving city.
There are three types of growth funding tools:
Development Charges: These charges are used to recover capital costs associated with residential and non-residential growth within a municipality. The provincial Development Charges Act allows municipalities to impose these charges on new development (or redevelopment).
Services eligible for development charges funding are set out in provincial legislation and include:
Alternative Parkland Dedication Rate: This is a funding tool that supports the expansion and improvement of the parkland system through the creation of new parks, the enhancement of existing parks, and/or the generation of revenue to fund recreational facilities like community recreation centres, arenas, and playgrounds.
Community Benefits Charges: These charges may be applied to new developments with five or more stories and 10 or more residential units. The charges may fund projects such as public art, affordable housing, park improvements, library improvements, childcare, or streetscape improvements to name a few. However, Community Benefits Charges cannot fund the same project costs as Development Charges and Parkland Dedication.
As more and more people call Toronto home, we need a growth funding plan for generations to come. The City is responsible for providing the public, industry, and other stakeholders with the information needed to understand why this change is happening and how it will affect all members of the community.
That’s why we are seeking your feedback. Over the coming months, we’ll be asking Torontonians to help us understand what is important to them and how we can ensure that growth pays for growth so that our communities can thrive.
Here’s how you can participate:
The information we gather in this phase of engagement will help inform the development of options which we’ll bring back for additional review and feedback.
We will continue to update this section, so please check back for more engagement opportunities and resources.
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