Growth Funding Tools

Introduction

In 2020, the Ontario government made legislative changes to the Planning Act and Development Charges Act. As a result of these changes, the City of Toronto was required to update its bylaws and the following Funding Tools:

  • Development Charges
  • Alternative Parkland Dedication Rate
  • Community Benefits Charges (replacing S37 Benefits)

These financial tools help pay for municipal services and infrastructure to support Toronto’s growing population, and provide opportunities to create and sustain livable, vibrant, and complete communities.

Visit the City of Toronto’s Growth Funding Tools for more detailed explanations of the growth funding tools. Frequently Asked Questions may also help answer your questions.

As more and more people call Toronto home, the City needs a growth funding plan for generations to come. The City is responsible for providing the public, industry, and other stakeholders with the information needed to understand why this change is happening and how it will affect all members of the community.

Torontonians were asked to participate in community workshops and public information sessions to help the City understand what is important to them to ensure that growth pays for growth so that our communities can thrive.

The City of Toronto: Growth Funding Tools presentation from two public information session held on October 6 and 13, 2021 explains the three funding tools.

Community workshops were held in December 2021 and January 2022. The workshops included a short Presentation about the project and focused small group discussions for participants to provide feedback on what is important when creating and funding complete communities.

Information gathered in this phase of engagement will help inform the development of options to be brought back for additional review and feedback.

The Project Timeline:

Winter 2022 

  • Draft studies and policies
  • Additional public and industry engagement

Spring 2022 

  • Studies and bylaws released
  • Statutory public meeting and report to Executive Committee
  • Final Report to Executive Committee and Council

Spring 2022 Update

The Growth Funding Tools team advised the public on April 12, 2022, that draft materials for the growth funding tools were now available. These funding tools pay for the municipal services and infrastructure that serve the growing population and bring opportunities to create and sustain livable, vibrant, and complete communities.

Public Information sessions were held on April 26 and April 28, 2022, to present a summary of the draft growth funding tools bylaws and related materials that will be presented to Committees and Council in the June reporting cycle.

Review the Presentation for the intentions and timelines.

Growth Funding Tools – Public Information Sessions – April, 2022

Currently, the Alternate Rate for Parkland can only be considered at the Planning and Housing Committee as it requires an Official Plan Amendment.  It was proposed at the Executive Committee meeting on May 4, 2022, that this rule be suspended for this issue alone so that the Alternate Rate for Parkland can be heard in tandem with the other Growth Related Funding Tools. City Council approved this item on May 11 providing a temporary measure until November 14, 2022, whereby City Council suspends the necessary rules and substitutes new rules in Chapter 27, Council Procedures, in order to allow the Executive Committee to consider, and hold the statutory hearing required under the Planning Act for a proposed official plan amendment respecting official plan policies related to parkland dedication pursuant to section 42(4) and related By-law under 42(2) of the Planning Act.

We are now awaiting the Final Reports for review at the Planning and Housing Committee and then by City Council in June. There is a provincial legislative deadline for the new Growth Funding Tools to be in place by September 18, 2022.

Summer 2022 Update

Final reports on the Growth Funding Tools were received on July 12 by the City of Toronto Executive Committee, and on July 19 by the City of Toronto Council and the recommendations were passed with amendments. FoNTRA sent three letters in response to the three reports.

Contact Information

Growth Funding Tools
Email: ac.ot1669261213norot1669261213@tfg1669261213


Development Charges

Development charges are used to recover capital costs associated with residential and non-residential growth. The provincial Development Charges Act allows municipalities to impose these charges. Services eligible for development charges funding include: housing/shelter, child care, water, sewers, storm management, transit, roads, parks and recreation (but not parkland acquisition), long-term care, by-law enforcement, emergency preparedness, development-related studies, waste diversion, police services, fire protection services, ambulance, libraries. See the City of Toronto Development Charges for an Overview and information on By-laws and Rates.


Alternative Parkland Dedication Rates

This funding tool supports the expansion and improvement of the parkland system through the creation of new parks, the enhancement of existing parks, and/or the generation of revenue to fund recreational facilities like community recreation centres, arenas, and playgrounds. See City of Toronto Parkland Dedication for explanations of the development review process, cash-in-lieu and exemptions.


Community Benefits Charges

The former provisions in Section 37 of the Planning Act have been replaced with the Community Benefits Charge. This funding tool allows municipalities to levy a charge of up to 4% of land value for new developments with five or more stories and 10 or more residential units to fund the growth-related capital costs of community benefits.

The charges may fund projects such as public art, affordable housing, park improvements, library improvements, child care or streetscape improvements plus other community initiatives. But CBC cannot fund the same project costs as Development Charges and Parkland Dedication.

The Ontario legislative changes to the Planning Act in September, 2020 require the City to update the by-laws regulating this funding tool. As well, annual reporting is required to the Provincial government providing an accounting of capital acquired and spent.


Section 37 and 45 Funds

Section 37 was replaced by the new Community Benefits Charge with the enactment of Bills 108 and 197 in September, 2020. However, City Staff continue to report on the status of the Section 37 (secured through site-specific zoning by-laws) and Section 45 (secured through Committee of Adjustment decisions) reserve funds annually according to the requirements of the annual reserve fund reporting processes. As of December 31, 2019, the total balance of the Section 37 Reserve Fund was $308.8 million and the total balance of the Section 45 Reserve Fund was $19.1 million.

In June 2021, Planning presented a Report for Action to the Budget Committee reporting on the reserve funds for the 2019 fiscal year. The Report includes four Attachments detailing Section 37 and Section 45 Cash-in-Lieu Financial Activity by Ward, Cash-in-Lieu Expenditures by Ward, Summary of Community Benefits Secured by Ward and Reserve Fund Balances as of December 31, 2019, by Ward. Review Section 37 Benefits for information on as well as links to Annual Reserve Statements.

The General Government and Licensing Committee adopted the recommendation submitted by Councillor Paul Ainslie on Oct 20, 2021, directing Planning in conjunction with the Chief Technology Officer to release historic (from January 1, 2006, to current) Section 37 and Section 45 Agreement information on the City’s Open Data portal, updating on a quarterly basis including:

  • individual agreement details by date, location, ward, type and amount
  • community benefit expenditures and their status
  • balances and interest earned on all Section 37 and Section 45 reserve funds.

A reporting was also to be provided to the General Government and Licensing Committee on November 30, 2021, on a plan for these Open Data portal updates.

These recommendations were adopted by City Council on November 9, 2021, with an amendment to change the reporting date in Recommendation 2 to the first quarter of 2022.