Development charges biased against transit

On September 24, Ontario’s Environmental Commissioner, Gord Miller, released “Building Momentum: Provincial Policies for Municipal Energy and Carbon Reductions.”

The report examined how development charges are used to fund municipal transit expansion and found that the funding formula is biased against transit when compared to how it treats other municipal services like roads.

Miller pointed out: “Right now, municipalities are prevented from using development charges to cover 100% of the capital costs for new transit service; they can only cover 90% of the costs. But they [development levies] can be used to pay for 100% of the capital costs of other municipal services like roads. Transit is not treated fairly.”

Miller found that another factor hobbling transit funding is that because the income from development charges can only be applied to providing the equivalent service that has been provided for the previous decade, municipalities that want to develop new transit in order to reduce traffic congestion, but which had very limited transit in the past, don’t get the funds they need.

Miller noted in 2011, municipalities in the province collected $1.3 billion from developers to pay for infrastructure. The Ontario government is promising to consult with the municipalities and review the Development Charges Act, 1997.