Bill 23 won't force municipalities into big property tax hikes, Doug Ford insists

Premier Doug Ford is dismissing concerns from municipalities who argue that his government’s decision to slash development fees will ultimately force them to cut services or introduce double-digit property tax hikes.

The City of Toronto has warned that changes to development fees and other charges as a result of Bill 23 will cost it $230 million in revenue on an annual basis.

The city’s budget for 2023, which was tabled this week, notes that staff expect the municipality “to be fully reimbursed for the revenue losses” but it warns that capital projects will have to be postponed or cancelled should that not happen.

Similar concerns have also been echoed by other municipalities.

In Vaughan staff have pegged the annual revenue loss from Bill 23 at between $169 million and $174 million and have said that a property tax increase of between 77 and 88 per cent would be needed to offset that, should the province not make the municipality whole.

Meanwhile, Mississauga has said that the changes will result in a $1 billion reduction in revenue over the next decade and would require an additional property tax increase of eight to 10 per cent to offset.

On Thursday, Premier Doug Ford was asked about the concerns of municipalities around Bill 23 during a press conference in Hamilton but seemed to suggest that they are largely overblown and that significant property tax hikes won’t be necessary.

“I'm going to have to disagree (that significant property tax hikes will be necessary),” he said. “They are going to get more revenues when these homes are built and these buildings are built. It is going to create more revenues up to the city coffers.”

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Minister of Municipal Affairs and Housing Steve Clark has previously suggested that the government will make Toronto “whole” if it can’t fund housing infrastructure and services due to a revenue loss resulting from Bill 23.

He has also promised to launch third-party audit of municipal finances that would be focused on determining whether there are sufficient reserve funds to offset the revenue loss from the changes to development fees.

However, the government has provided few specifics about which municipalities would receive audits.

“Let’s get back to the root cause, the reason we're doing this. Nothing would be worse than having 300,000 people every year showing up to the GTA and Hamilton and not having any housing for them,” Ford said on Thursday, while discussing his government’s housing bill. “There was a lack of action for many, many years and now we have to start building. We have to start building for the future and making sure people can afford homes.”

Ford's latest comments seemingly dismissing the concerns of municiplaities come after he told reporters last month that he doesn't believe the revenue loss will hurt "at all" because there is "waste" that can be eliminated to make up the difference.

"I know there’s waste down at the city and we want to work cooperatively with all the cities and municipalities,” he said, speaking specifically about Toronto.

The Ontario government has set a goal of building 1.5 million new homes over the next decade.