Time for feds to 'face the future'
November 8, 2008
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Michael Moldenhauer
Afew columns back, I congratulated Ontario Premier Dalton McGuinty on his decision not to open the Development Charges Act. Acknowledging that development charges get passed on to new homebuyers, the premier stated that with housing affordability a real concern in the marketplace, it would be a mistake to move in that direction.
I complimented the premier, noting that his move was "particularly gutsy" because it only increased the pressure on him to upload the cost of previously downloaded social services from the municipal property tax base.
As difficult as the times are for our province right now, the premier has done the right thing again, with the Oct. 31 release of the Provincial-Municipal Fiscal and Service Delivery Review: Facing the Future Together. The report was a treat and a trick for municipalities.
The treat is that the McGuinty government has committed to uploading the cost of previously downloaded services to the tune of $1.5 billion per year. The neat trick is that the uploading will be phased in over several years, which is perfectly understood by all parties to be the responsible approach.
What does all of this have to do with new homebuyers? In short, it's creating a lot of fiscal room for municipalities, which should relieve the pressure on development charges, particularly in the City of Toronto, which will find an additional $400 million in spending room each and every year once the full benefits of uploading are felt.
It's worth noting that the City of Toronto also came into $238 million this past summer as the Premier announced $1.1 billion in bonus infrastructure funding for municipalities. Throw in gas tax revenue sharing, GST relief and the land transfer tax and the city seems well positioned to abandon old ways of thinking, which would include excessive dependency on development charges.
Development charges aren't as lucrative to Toronto due to its mature state or appropriate from the standpoint of sustainable urban development. More creative solutions are required and are being actively developed by industry leaders under the auspices of Building a Sustainable Toronto. Getting back to uploading, the Regions of Halton, Peel, York and Durham will benefit to the collective tune of nearly $250 million per year by 2018.
The province is very smartly suggesting that municipalities invest their uploading dividends in infrastructure. "Infrastructure is important to economic competitiveness and quality of life in every municipality and the province as a whole," the report states.
The uploading initiative by the province, working hand in hand with the Association of Municipalities of Ontario and the City of Toronto, is something our association has been advocating. We congratulate the premier, Ministers Jim Watson and Dwight Duncan, and the municipal parties to the landmark agreement on their accomplishment.
In the same breath that we have called for uploading, we have called for the federal government to share the wealth with our province and municipalities. It's time for the feds to "face the future together" with them.
The federal government has a new mandate and a golden opportunity to forge improved relationships with our province and, more importantly, the GTA .
As the report rightly notes, "Ontarians expect the federal government to be a full partner in responding to today's challenges and building tomorrow's prosperity."
Michael Moldenhauer is president of the Building Industry and Land Development Association. The views expressed are those of the president. Email: president@bildgta.ca.
Toronto Star