Peel warns it faces a $2-billion shortfall under Ford’s new housing bill

The Region of Peel says it could lose $2 billion over the next decade because of changes to development fees included in the contentious More Homes Built Faster Act, a sweeping provincial bill that aims to build 1.5 million homes by 2031.

The estimated shortfall would make it difficult to fund the infrastructure necessary to accommodate new development and undermine the means to create accessible housing for vulnerable residents, according to a report released by Janice Baker, Peel’s chief administrative officer.

The report calls on the province to establish a fund to ensure local governments remain whole under the new law, which, to incentivize more homes, will reduce or eliminate the fees developers pay to cities.

According to a letter to the Association of Municipalities of Ontario (AMO) dated Nov. 30, Minister of Municipal Affairs and Housing Steve Clark committed to “ensuring municipalities are kept whole for any impact to their ability to fund housing enabling infrastructure because of Bill 23.”

But if the Ontario government doesn’t act, the Peel Region’s report concludes, Mississauga, Brampton and the Town of Caledon — the three municipalities that comprise the regional municipality — will be forced to hike property taxes and utility rates on residents.

“The first property tax bill is going to hit them hard,” Mississauga City Councillor Carolyn Parrish said on Friday. “And when it does, they’re going to call our office and I’m going to say, ‘I’m sorry, I fought the good fight. Here’s your MPP’s number. Call them.’”

Politicians and bureaucrats across the GTA and beyond have been reeling at the prospect of what AMO estimates will be a $5.1 billion revenue shortfall over nine years.

At a press conference on Thursday, Ford insisted the bill will not hurt cities’ finances. The province argues developer fees hinder building, and says it is launching third-party audits of select municipalities.

Peel’s report questions the legislation’s ability to actually address the housing crisis. It claims the changes won’t materially improve affordability across the region and “may curtail rather than enhance housing supply.”

The province’s housing target for Peel Region is nearly 150 per cent more than what was previously forecast — jumping from 100,000 new homes to 245,000. The new target will be challenging to accomplish, the report says.

Bruce Macgregor, York Region’s chief administrative officer, shared similar doubts in an email to the Star on Friday. “While York Region staff support the Province’s efforts to build more housing faster,” he wrote, “the exemptions and discounts Bill 23 introduced will result in a transfer of costs to the tax levy and ratepayers — and may not impact housing affordability.”

Meanwhile, Parrish said she’s “almost speechless” when asked about the bill — what she called “a complete, short slam in the head,” which involved, she said, hardly any meaningful consultation with municipalities.

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