Ford’s plan for another gift to developers could make Brampton residents pay 73 percent more for utilities
Peel Region's top bureaucrat is warning that if the Doug Ford government gets what it wants, homeowners in Brampton and across the region may wind up paying almost twice as much for utilities.
Already facing a proposed 6.5 percent increase in water and wastewater costs in 2019, taxpayers could see an additional increase of about 73 percent because Ford is proposing to eliminate development charges the region collects from builders when they construct homes and other structures. Those fees, which are eventually passed on to property buyers in the pricing for homes, help pay for new infrastructure needed to support new subdivisions and other buildings that must be serviced.
Without that income from developers, taxpayers would need to foot the whole cost of roads, pipes and other infrastructure new buildings and subdivisions need. In what would amount to an alarming subsidy to developers, homeowners would end up paying dramatically higher water and wastewater bills.
Peel's chief administrative officer, David Szwarc, told regional council members Thursday that the move would have “wide-ranging consequences” if pushed through by the majority Progressive Conservative government, which has already made sweeping changes across the province with the other parties powerless to stop them.
Szwarc said eliminating development charges in other jurisdictions has resulted in a 73 percent jump in utility rates to make up for the lost revenue. Coupled with the proposed 6.5 percent utility rate increase for 2019, this would mean an almost 80 percent claw-back from taxpayers' pockets.
Homeowners have faced sharp Ontario Hydro rate increases of as much as 40 percent in recent years. Data shows that many, particularly seniors on fixed incomes, could not afford further dramatic rate spikes in water rates. A common result when utility rates are increased significantly is seniors and others having to move out of their homes.
Szwarc mentioned Ford’s claim that eliminating development charges for builders would allow them to lower home prices, but the CAO dismissed that rationale as an excuse to transfer building-related costs to municipal taxpayers.
The new chair of Peel Regional Council, Nando Iannicca, said he is “fearful” of Ford’s proposed move and warned fellow council members that a major challenge is on the horizon, pointing to other cuts the Ford government has begun to make.
Nando Iannicca, the new chair of Regional Council, with the three mayors.
But unlike the just-announced cuts to the province’s student loan program and other costs eliminated from the provincial budget, the development charges have no impact on Queen’s Park. The only beneficiaries of the proposed move are developers. Ford's Making Ontario Open for Business Act and his proposed Bill 66, to make Ontario more competitive, could weaken protections on the Greenbelt, allowing developers to build on parts of it. His latest proposal appears to be another gift to developers, many of whom as individuals are major donors to the PC party.
Most of Peel's current $1.4 billion debt — just over $1.3 billion — is the result of borrowing to pay for new infrastructure and improvements while waiting for builders with active projects to turn over development fees to cover those costs.
If Ford gets his way, the combination of lower costs — with regional infrastructure fees eliminated — and more available Greenbelt land to build on would give the premier's friends in the development industry incentive to step up construction activity — meaning the region would have to extract even more money from property taxpayers to pay for new infrastructure. (A leaked campaign video from a private event last spring showed Ford promising developers he would open up the Greenbelt for them.)
All of this would happen in an environment of stiff increases already staring Peel homeowners in the face. The 2019 budget, which councillors dealt with during their Jan. 17 meeting, includes a proposed 6.5 percent hike for utilities and 3.3 percent increase in the region’s share of the property tax bill. The two costs are separate.
If the province makes further cuts to grants and funding it provides to the region for services such as Ontario Works, affordable housing, ambulatory care, social services for seniors and children, policing and other areas, Peel Region will face more budgetary challenges.
It all amounts to a massive downloading of costs onto the municipal property tax base. Ford wants to reduce the province’s staggering $322 billion debt. But critics say it makes little sense to download a full range of costs to municipal taxpayers, university students and others, then burden them further with a massive gift to developers that has little benefit for the province.
All of this is happening as Peel Region deals with unsustainable operating cost increases, mostly for salaries and particularly for policing.
The council-approved operating budget for Peel Region in 2013 was $1.9 billion. The proposed 2019 operating budget (primarily for salaries) is $2.5 billion — a 32 percent increase over six years, more than twice the rate of inflation. (Those amounts do not include capital costs for roads and other infrastructure needs.)
Rapidly rising salaries for police officers represent a large part of the increase. The police contract that came into effect this year puts the salary for a full first-class constable at $100,420, and some, with all the available premiums applied, earn as much as $117,491, plus the additional cost of pension and benefits. Not including overtime and off-duty pay, this represents a 41 percent increase in the base salary since 2006 (when officers earned $71,000) and a 61 percent increase when premiums are included.
Experts and politicians across the province, including Markham Mayor Frank Scarpitti and former Durham Region chair Roger Anderson, who died last year, have said ballooning police salaries across the 905 area code are unsustainable and a major obstacle to policing. Instead of being able to invest in crime-fighting technology, sophisticated training, anti-gang initiatives and more officers to fight the root causes of violent crime, more and more money is going to salaries. Mississauga Mayor Bonnie Crombie, who sits on the Peel Police Services Board, has addressed the need for police boards across Ontario to take a coordinated approach to slowing police salary increases with the aim of using the savings in other ways to fight crime.
The provincial "Sunshine List," which discloses the names of all Ontario public employees who earn $100,000 or more, now includes every Peel officer from first-class constable to the chief.
With rising labour and operating costs, increases to utility rates and the spectre of a 73 percent additional hit if development charges are scrapped, Crombie, Brampton Mayor Patrick Brown and the rest of Peel Region council will face major challenges.
But as the annual budget process begins, an even bigger question arises: Will all these challenges play right into Ford’s hands? He wants to find efficiencies. That might include getting rid of Peel Region altogether.
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