Changes to the Development Charges Act, 1997 to Enhance Municipalities' Ability to Invest in Housing-Enabling Infrastructure

Regulation Number(s):
Instrument Type:
Bill or Act:
Development Charges Act, 1997
Summary of Decision:
The Ontario Legislature has amended the Development Charges Act, 1997 to

1. Repeal the mandatory five-year phase-in of development charge (DC) rates in DC by-laws passed since January 1, 2022.

The City of Ottawa has been provided a transition rule to amend its 2024 DC by-law to remove the phase-in rules so that it can collect the full amount of DCs. Site plan/zoning applications submitted to Ottawa between May 15 and 15 days after the Royal Assent of Bill 185 will not cause the DC rates for a particular development to be frozen.

2. Reinstate studies as an eligible capital cost for DCs and enable municipalities that passed DC by-laws on and after November 28, 2022, to reinstate these costs as part of their DC rates through a time-limited streamlined process.

3. Provide municipalities with a streamlined process for extending DC by-laws.

4. Reduce the time limit on the DC freeze from 2 years to 18 months once an application is approved.
Analysis of Regulatory Impact:
The amendments (with the exception of the change to the DC freeze) would selectively impact individual Ontario municipalities levying DCs depending on their individual circumstances. Where a municipality is impacted, a streamlined (i.e., more efficient and cost-effective) process has been included to implement the changes.

It is anticipated that municipalities could be able to recover additional DC revenues from developments. In terms of costs, they are expected to be minimal, mainly related to administrative costs associated with learning about the changes.

It is anticipated that the development sector could have to pay higher municipal development charges depending on the location of their development.
Further Information:
Proposal Number:
Posting Date:
April 10, 2024
Summary of Proposal:
In December 2023, the government committed to consulting on potential changes to the development charges (DC) framework to enhance municipal ability to build housing-enabling infrastructure.

The Ministry of Municipal Affairs and Housing (MMAH) has consulted on DC proposals with municipal and industry subject matter experts, including the Association of Municipalities of Ontario and the City of Toronto, and is now seeking to make legislative amendments to the Development Charges Act, 1997 (DCA) as part of the government's Spring 2024 Red Tape Reduction (RTR) bill (the proposed Cutting Red Tape to Build More Homes Act).

The proposed initiatives would cut red tape and support municipalities to build more housing faster to reach the government's goal of building at least 1.5 million homes by 2031. It would speed up the construction of housing and respond to stakeholder feedback.
Contact Address:
Royal Assent Date:
June 6, 2024